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POL101Y1 Study Guide - Final Guide: John Maynard Keynes, Economic And Monetary Union Of The European Union, European Stability Mechanism

Political Science
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ASEAN (Association of Southeast Asia Nations)
o Regional economic organization of 10 countries in Southeast Asia created in 1967
o Form of economic regionalism, purpose: to create a closer economic community to
prevent regional conflicts, however, this system in not the same as the economic
integrations in the European Union (less binding and institutionalized)
o Mainly created due to political and security concerns
o Significance: suggests that there is global interest in creating regional governing bodies
and institutional frameworks
Bretton Woods System
o A monetary system created in 1944 that established the rules for international financial
relations and sought to create stability
o Established 4 international institutions: UN, IMF, World Bank, GATT (later became the
o Was based on the ideas of John Maynard Keynes, who said that government had to play
a large role in managing monetary systems after the wake of the great depression.
Believed that there needed to be more opportunities for intervention to prevent
another depression
o Significance: Although the Bretton Woods Systems was initially based helping nations
create a welfare state, it has over the years evolved to support neoliberal ideologies.
Especially in the 1980s, privatization became a large concern for the institutions.
Cold War
o Extended worldwide conflict between communism and capitalism that began in 1947
and ended in 1989 with the collapse of the Soviet Union in Europe
o For hyper-globalizers, this was perceived as a victory for Western democratic capitalism
o End of the CW influenced many of the neo-liberal governmental policies in the 1990s
Common Agricultural Policy (CAP)
o European Union agricultural subsidies
o EU wanted to create an EU agricultural common market, represents almost half of the
EU budget
o Significance- EU works to protect European farmers from the effects of globalization
o All humans belong to the same global community and have a shared set of ethics
o Significance: Can be thought of as a product of globalization, because it suggests that
individuals have certain fundamental freedoms/rights beyond the nation-state
o Different forms of cosmopolitanism: cosmopolitan culture ( a global culture), democracy
(global democracy), rights (global rights), capitalism (global market)
o The deliberate practice of selling a product abroad at a price lower than domestic price.
o Dumping makes it difficult for producers in the country receiving the cheap product to
o Significance: often cited as a problem caused by neoliberal economic globalization
o Anti-globalists and protectionists argue that trade restrictions can reduce the impact of
dumping (which is in opposition to the neoliberal idea that barriers to trade must be
o Refers to the regional integration of the European states through policies formed by
institutions like the EU
o Also can be thought of as a historical process: the spread of European values and beliefs
both within and outside of the European continent (colonialism)
o Significance: a form of regionalization that stands in opposition to the hyper-globalizer
version of globalization (a global world without borders and nation states)
FDI (foreign direct investment)
o is direct investment into production or business in a country by a company in another
country, either by buying a company in the target country or by expanding operations of
an existing business in that country
o done to take advantage of cheaper wages or for special investment privileges such astax
exemptions offered by the country as an incentive to gain tariff-free access to the markets
of the country or the region
o significance: According to the liberal thesis, can contribute to economic development.
Critics tend to say that FDI in many nations in the global South in a new form of
imperialism (investors tend to be from the global North)
Francis Fukuyama
o The author of “The End of History” and was a hyper-globalizer
o Suggested that humanity has reached an end point after the end of the Cold War, where
Western liberal democracy is the final world order
o Significance: Claimed that globalization is a natural and evolutionary process
increased economic ties between nations through deregulation policies would diminish
the role of the state, give more power to individuals and corps, and create social
stability and equality
Global Warming
o Increase in global temperatures due to rise in greenhouse gases and environmental
degradation that is caused by human activity
o Some theorists suggests this problem needs to be solved through global initiatives, it
offers a test to whether global institutions can actually solve environmental problems
o Tragedy of the global commons- if all players pursue self-interest (economic gain), public
interest (a ‘healthy’ environment) is damages
o Significance: international institutions and regional institutions have sought to manage
this problem, but many critics suggest that true environmental protect stands in
opposition to the neoliberal agenda (deregulated free trade).
Great Depression
o Worldwide economic collapse following the 1929 crash of wall street that left countries
in a depression (due to trade relations and fdi’s)
o Significance: JMK argued that the collapse was due to the lack of government
intervention in markets. Even after the GD, many governments thought that the
economy would revive on its own. Critics suggest that self-regulation was the cause
Humanitarian Intervention
o The principle that the international community has a right to intervene in states that
have suffered large scale loss of life or genocide (by government or due to the collapse
of government)
o Principle by which UN peace missions are founded on
o Many NGOs like the Red Cross and Doctors without Borders are also founded on this
o Significance: the nation-state is not its own ruler, it must abide by international rules
IGOs (intergovernmental organization)
o An international organization in which full legal membership is officially solely open to
states and the decision making authority lies with representative from government
o Helps establish public law
o UN and NATO are examples
o With globalization, more counties have become involved in such organizations
ILO (international labour organization)
o UN agency, sets international labour standards,
IMF (international monetary fund)
o Part of the BW system
o Provides assistance and short term flows of stabilization finance to any member state
experiencing distress in public finances
o IMF along with the WB were responsible for the structural adjustment funds imposed
on developing nations in the global South
o All currencies became fixed to the US dollar (before used the gold standard) (1970s)
o IMF still plays a role in currency values
o Significance: wanted to create an environment where free trade could flourish
Immanuel Wallerstein
o Worlds systems analyst- the world system and not the nation state should be the
primary unit of analysis
o He divided the world system into 3 categories: core, semi-periphery, and periphery
o These categories were based on the division of labour- core countries (high skilled,
capital intensive production), periphery (low skilled labour
o Although the core exerts dominance over the peripheries, these categories are dynamic
and change with time
o Significance: his global level of analysis is useful for a world undergoing globalization
International Human Rights Regime
o International and regional regimes that promote human rights and fundamental
o Examples: the African Charter on Human and Peoples' Rights, the American Convention
on Human Rights (the Americas) and the European Convention on Human Rights, UN
o Significance: human rights is something granted to individuals beyond the nation state,
it has a regional and global basis
John Maynard Keynes
o Key theorist who helped create the Bretton Woods system and got Western nations out
of the Great Depression
o Emphasized the importance of public goods, especially during depression. The economy
needs help from government spending to recover because private corporations get
stuck in a snow-ball-effect
Just War Tradition
o Principle of ethics that suggests that taking human life in war is morally wrong, however
states need to protect the interests of its people and promote justice (making war
sometimes necessary)
o Significance: aims to provide a guide for the right way states should act in conflict
LDCs (Least Developed Country)
o the name given to a country which, according to the United Nations, exhibits the lowest
indicators of socioeconomic development based on the Human Development Index
o are at a lower level of historic, economic, political, and cultural development (based on
a “stage view” of history)