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POL208Y1 (500)
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North vs. South - Modernization Theory.docx

11 Pages
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Department
Political Science
Course Code
POL208Y1
Professor
Lilach Gilady

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Description
NorthvsSouthModernizationTheory12252013RecapIsglobalizationanewthingWhatisnewCombinationofgoodscapitalandmaybelabourReducedtransactioncostsThevolumeoftransactionComplexinterdependenceCapitalmobilityFDIForeignDirectInvestmentWhyDoesFDIMatterAllowscapitalownerstoexitthemarketstateiftheydontlikethepoliciesofthestateARaceToTheBottomIfcapitalcanexitwhenlocalpoliciesarenotseenascondusivetomakinggreaterprofitsitcanmakeitdifficultforgovernmentstointroducecertainpoliciesegtaxationlabourlawsenvironmentalregulationbecausethesepoliciesmightmakecapitalownersmoveelsewhereInthelongrungovernmentshavelessautonomytoimplementpoliciesandcitizenshavelessabilitytoinfluencethetypeofsocietyinwhichtheyliveForeignDirectInvestmentsFDIexampleToyotaisaJapaneseautomakerbutmostlikelytheyarebuiltatleastpartiallyinNorthAmericainvesthereThequestioniswhereinCanadaNorthAmericawouldtheywanttobuildtheirfactoriesWhichprovincescanprovidethebestconditionsrdWalmartisthe23economicentityintheworldThequestionofwhethertherealistassumptionofthedominanceofthestateischallengedwiththisTheStateAndTheMultiNationalCorporationsMNCIsthestatebecomingpowerlessWhataretheethicalimplicationsWhathappenstotheconnectionbetweencitizensandgovernmentswiththepotentialdominanceofMNCsDoesitforceustoreevaluatethewinnersandlosersandwithitthetheoryoffreetradeTheStateandtheMNCAntiglobalizationCollectionofdifferentinterestgroupswithavarietyofconcernsandagendasfocusonredistributionexternalitiesdemocracyRegulationfrombelowThegovernmentmightnotbeabletoregulateMNCsbutweasconsumerscanhaveinfluenceoverMNCsbyeconomiclogicIfweconsumeonlygoodsthatmatchourvalueswecancreatedemandthatchangestheirpatternsofproductionThereisaquestioniffairtradeisactuallychangingpatternsofproductionorifitisonlyaboutliberalguiltandanotherwayforbusinessestomakemoneyIsthereanAlternativeRodriksTrilemmaTherearethreeimportantdimensionsweneedtofocusonwhenwemakeourchoicesontheInternationalPoliticalEconomy1EconomicIntegration2MassPolitics3NationStateRodriksaysthatatanygiventimeyoucanonlyhavetwoofthethreethestructureallowsustoseethetradeoff1EconomicIntegrationNationStateWewouldbeinaworldofracetothebottomStrongmultinationalscapitalmobilitycontinuinggrowthbutpeoplewouldlosetheabilitytoinfluencethestateTradeoffAgrowingdemocraticdeficit2EconomicIntegrationMassPoliticsGiveuponthenationstateTherewouldbenoracetothebottombecausetheentireinternationalsystemwouldhavethesamerulesnonationstateTradeoffThelossofthenationstate3NationStateMassPoliticsNoEconomicIntegrationThisissimilartoBrettonWoodsTradeoffLimitedEconomicIntegrationARisingTideLiftsAllBoatsIfwebelievetheoriesoftradethatsaythateconomicintegrationwillincreaseeverybodyswelfareanimportantiswhetheritactuallybenefitsoritonlybenefitsallsomeFactorPriceEqualizationWhenmarketforcesareallowedtoworkandcompetefreelygovtkeepstheirhandsouttheywillpushtowardsequilibriumstabilityFreetradewilleliminatepricedifferencesforcommoditiesacrosscountriessubsequentlythepricesofthefactorsofproductionrelatedtothosecommoditiescapitalandlabourwillalsoequalizeForexampleFollowingtheimplementationsofNAFTAunskilledlabourwagesgraduallyfellintheUSatthesametimeattheygraduallyroseinMexicoDoesitWorkinpractice
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