POL208Y1 FINAL EXAM REVIEW.docx

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Department
Political Science
Course
POL208Y1
Professor
Lilach Gilady
Semester
Summer

Description
POL208Y1 FINAL EXAM REVIEW FIND MAIN TERMS & DEFINE WITH EXAMPLES INTERNATIONAL POLITICAL ECONOMY – DISCUSSES THE FACT THAT THE POLITICAL ACTIONS OF STATES CLEARLY AFFECT INTERNATIONAL TRADE. FURTHERMORE, POLITICAL DECISION MAKING IS ONE MADE WITH ECONOMIC REPERCUSSIONS IN MIND, OR WHAT IS ECONOMICALLY VIABLE. ARTICLE: BRETTON WOODS SYSTEM: ESTBALISHED THE STABLE LIBERAL TRADE SYSTEM AFFTER WW11 AND THE COLLAPSE OF THE GOLD STANDARD. AFTER WW11 EUROPEAN STATES WERE IN NEED OF FINANCIAL ASSISTANCE INCLUDING BRITAIN WHO PRIOR TO WW11 WAS SEEN AS THE FOREMOST ECONOMIC HEGEMON. THE GOLD STANDARD (PRE 1914) PROVIDED AN AUTOMATIC ADJUSTMENT MECHANISM FOR INTERNATIONAL PAYMENTS WHEREBY COUNTRIES INVOLVED IN TRADE WOULD PEGG THEIR OWN CURRENCY TO THE GOLD STANDARD. THE GOLD STANDARD HELPED TO STABILIZE INTERNATIONAL AND DOMESTIC ECONOMIES ALTHOUGH AFTER WW1 STATES LOST CONFIDENCE IN THE SYSTEM AND RESULTED TO PROTECTIONIST MEASURE, EVENTUALLY ABANDONING THE GOLD STANDARD, DURING THIS TIME AND SOON AFTER BRITIAN COULD NOT HELP, AND THE US REFUSED TO HELP RESULTING IN THE GREAT DEPRESSION. --- LATER CHANGED INTO THE US DOLLAR STANDARD. THE SIGNIFICANCE OF THE BRETTON WOODS SYSTEM LIES IN THE IDEA THAT INSITUTIONS CAN CHANGE AND GROW TO ADAPT TO THE SYSTEM BETTER THAN STATES AS ECONOMIC ANCHORS. OIL EMBARGOES COLLAPSE OF BRETTON WOODS – DURING THE US WAR IN VIETNAM THE US BEGAN TO INCUR MAJOR TRADE DEFICITS THEREFORE NIXON TOLD THE INTERNATIONAL COMMUNITY THAT THE BRETTON WOODS SYSTEM AND THE USE OF THE US DOLLAR COULD NOT MAINTAIN A GUARENTEED FIXED RATE FOR TRADE AND STABILITY PURPOSES. HENCE, THIS DEMONSTRATES THAT AS A HEGEMON, THE US FELT THAT IT WAS NOT IN THEIR FAVOUR TO MAINTAIN THEIR DOLLAR AS BACKED BY THE GOLD STANDARD; THEREFORE THEY BACKED OUT AT THE COST OF THE INTERNATIONAL COMMUNITY. IN A CONTEXT OF RELATIVE AND ABSOLUTE GAINS, THE US FELT THAT THEY WOULD NOT BE IN A UNLIATERALLY ADVANTAGEOUS POSITION. THE BRETTON WOODS SYSTEM WAS SEEN TO PUT FORTH VARIOUS INSTITUTIONS WHICH REMAIN TODAY, INCLUDING THE IMF AND THE WORLD BANK HENCE EVEN THOUGH THE SYSTEM ITSELF FELL THROUGH, LEAVING THE MARKETS WITH A FLOATING EXCHANGE RATE TODAY, ITS INSTITUTIONS HAVE REMAINED A LARGE PART OF THE INTERNATIONAL ECONOMIC SYSTEM. HEGEMONIC STABILITY THEORY – THIS REALIST THEORY OUTLINES THE EMERGENCE, AND NECESSITY, OF A SINGLE COUNTRY WHICH CAN ANCHOR STABILITY OF THE INTERNATIONAL MILITARISTIC, POLITICAL AND ECONOMIC SYSTEM. ITS REALIST NATURE LIES IN THE DISCUSSION OF POWER IN BOTH THE POLITICAL AND ECONOMIC SYSTEM, WHEREBY THE HEGEMON CAN USE ITS POWER TO OPEN UP TRADE AND THEN PUSH THEIR GOODS INTO COUNTRIES WHICH THEY INVEST IN. COMPARED TO OTHER STATES WHO MAY REGARD TO TRIBULATIONS OF THE INTERNATIONAL MARKET AS A NEGATIVE REPRUCUSSION TO OPEN UP THEIR MARKETS TO INTERNATIONAL TRADE, HEGEMONS WOULD NOT HAVETO WORRY ABOUT THE TRIALS OF THE SYSTEM BECAUSE THEIR ECONOMIC BENEFIT IS FAR TOO GREAT TO EMPLO PROTECTIONIST MEASURES. WHAT STEPHEN KRASNER NOTES IN HIS ARTICLE IS THAT, TRULY THERE IS A TREND IN THE INTERNATIONAL MARKET WHICH DEMONSTRATES THE NEED FOR A HEGEMONIC STATE IN ORDER TO SECURE STABILITY. FURTHERMORE, IN A MOVE FROM BRITAIN TO THE US, THE FLUCTUATIONS OF THE MARKET (IN TERMS OF TARIFFS AND THE RELATIVE OPENNESS AND CLOSENESS OF BORDERS) FREE TRADE HAS BEEN IN ACCORDANCE WITH THE PRIMARY ACTIONS OF HEGEMONIC STATES. FOR EXAMPLE, WHEN THE US WAS SEEN TO EMPLOY HIGHER TARIFFS, TARIFFS ROSE INTERNATIONALLY AND FREE TRADE DECREASED (AND VISE VERSA). ALSO, HEGEMONS ARE SEEN TO BENEFIT FROM DICTATING THE RULES OF THE GAME IN TERMS OF INTERNATIONAL INSTITUTIONS WHICH MONITOR TRADE SUCH AS THE WTO. ECONOMIC NATIONALISM – THIS ECONOMIC VIEW BELIEVES THAT THE STATE IS THE FOREFRONT AND MOST IMPORTANT ACTOR IN THE INTERNATIONAL SYSTEM INCLUDING LARGE EXPENDITURES IN MILITARY POWER IN ORDER TO FURTHER THE NATIONAL INTEREST. IN ACCORDANCE WITH THE REALIST PARADIGM, ECONOMIC NATIONALISTS BELIVE THAT HUMANS ARE BY NATURE SELFISH AND COMPETITIVE POLITICALLY, THIS IS A MIRRORED IMAGE OF THE INTERNATIONALECONOMIC SYSTEM. TRULY THIS PROMOTES THE VIEW THAT THERE IS DIRECT RELATIONSHIP BETWEEN PURSUIT OF POLITICAL POWER AND ECONOMIC WEALTH, ALTHOUGH THE NATIONAL INTEREST SUPERSEDES ECONOMIC ACTIVITIES. FURTHERMORE, ECONOMIC NATIONALISM PREDICTS THE ACTIONS OF STATES FOR THE SUPPORT OF INFANT INDUSTRIES AND SUPPORT OF DOMESTIC TRADE--- RELATIVE OVER ABSOLUTE GAIN. ECONOMIC LIBERALISM - LIBERALISM PROMOTES ABSOLUTE GAIN AND BENEFIT OF TRADE RATHER THAN SIMPLY RELATIVE GAIN IM FAVOUR OF A SINGLE STATE. LIBERALS, IN PARTICULAR, PROMOTE THE NOTION OF A FREE TRADE SYSTEM WHEREBYALL COUNTRIES SHOULD BE ABLE TO TRADE WITHOUT BARRIERS AND TARIFFS IN ORDER TO PROMOTE ECONOMIC GROWTH. ASSUMPTIONS WHICH ACCOMPANY ECONOMIC LIBERALISM ARE THAT THE POLITICAL AND ECONOMIC REALMS SHOULD REMAIN SEPERATE, AND MARKETS SHOULD BE FREE OF GOVERNMENTAL/POLITICAL INTERFERENCE. ADAM SMITH POSITIVE GAINS FROM TRADE/INTERDEPENDENCE: STATES WILL BE LESS LIKELY TO GO TO WAR WITH A STATE THAT THEY ARE HIGHLY ECONOMICALLY INVOLVED WITH. GATT: GENERAL AGREEMENT ON TRADES AND TARRIFFS. GATT IS SEEN TO PROMOTE NON-DISCRIMINATION IN TRADE PRATICES PROVIDING AN INSTITUTION FROM WHICH TO NEGOTIATE CONTRACT AND TRADE RULES. SINCE ITS ENACTMENT GATT HAS BEEN ABLE TO SUBSTAINTIALLY WIDEN THE INTERNATIONAL TRADE SECTOR THROUGH THE REMOVAL OF TRADE TARIFFS, ALLOWING FOR TRADE LIBERALIZATION IN ORDER TO STIMULATE INTERNATIONAL ECONOMIC EXCHANGES. PROPONENT OF MOST FAVOURED NATION P WTO: WORLD TRADE ORGANIZATION. THE AIM OF THE WTO IS TO UPHOLD TRADE AGREEMENTS AND SETTLE TRADE DISPUTES BETWEEN STATES. THE WTO IS SEEN TO ENJOY A LEGAL PERSONALITY THROUGH ITS INSTITUTIONAL FRAMEWORK IMF: INTERNATIONAL MONETARY FUND. THE IMF PROVIDED SHORT TERM LOANS IN ORDER TO BALANCE PAYMENT DEFICITS. THE CAPACITY TO LEND TO STATES DEPENDS ON THE QUOTA OF MEMBER STATES WHO CONTRIBUTE TO THE ORGANIZATION. THE IMF ALLOWS CONFIDENCE IN THE SYSTEM SUCH THAT IF ONE IS NOT ABLE TO MAKE A TRADE PAYMENT, THE IMF CAN LEND MONEY TO THE MEMBER STATE IN ORDER TO PREVENT INSTABILITY. THE IMF FURTHER WORKS AS A SURVEILLANCE ORGANIZATION, MONITORING THE ECONOMIES OF MEMBER STATES AND PROVIDINGE ECONOMIC ADVICE TO AVOID INSTABILITY. PROVIDES 2 TYPES OF LENDING 1) CONCESSIONAL, LENDING WHICH IS GIVEN FOR A LONG PERIOD OF TIME WITH A LOW INTEREST RATE, TYPICALLY GIVEN TO DEVELOPING COUNTRIES 2) NON- CONCESSIONAL- SHORT TERM, HIGH INTEREST LENDING. FURTHERMORE IMF IS SEEN TO PROVIDE ASSISTANCE FOR DEVELOPING COUNTRIES SUCH AS DEBT RELIEF FOR HIGH INDEBTED POOR COUNTRIES, AND THE MILLENIUM DEVELOPMENT GOALS. MILLENIUM DEVELOPMENT GOALS: DISSCUSSED AT THE MILLENIUM SUMMIT IN 2000---INTERNATIONAL GOALS FOR DEVELOPMENT TO REACH BY 2015. THE AIM IS TO ASSIST IMPOVERISHED STATES AND ENHANCE THEIR DEVELOPMENT BY IMPROVING THEIR SOCIAL AND ECONOMIC CONDITIONS. AREAS INCLUDED 1) THE GOAL TO END HUNGER AND POVERTY, AND TO CUT IN HALF THE AMOUNT OF PEOPLE WHO GAINED ONE DOLLAR A DAY BY ACHIEVING DECENT WORK FOR ALL---WOULD LEAD TO CUT IN HUNGER. CHALLENGES INCLUDE THE ABILITY KEEP TRACK OF PEOPLE OF ARE DISPLACED DUE TO WAR AND VIOLENCE. 2) ACHIEVE UNIVERSAL PRIMARY EDUCATION FOR CHILDREN 3) ACHIEVE GENDER EQUALITY 4) REDUCE UNDER 5 MORTALITY RATE 5) IMPROVE MATERNAL HEALTH 6) COMBAT HIV/AIDS AND OTHER DISEASES. 7) ENSURE ENVIORNMENTAL SUSTAINABILITY 8) DEVELOP A GLOBAL PARTNERSHIP FOR DEVELOPMENT **** CONDITIONAL LOANS WORLD BANK: WORLD BANK DEALS WITH THE PRIVATE SECTOR TO PROVIDE LOANS FOR STATES IN NEED. MOST IMPORTANTLY THE WORLD BANK FACILITATED EUROPEAN COUNTRIES IN ACHIEVING THEIR PRE-WAR ECONOMIC STANDARDS IN ORDER TO RE-DEVELOP THEIR ECONOMIES. --- PRIMARILY AS THE EUROPEAN BANK OF RECONSTRUCTION AND DEVELOPMENT THEN AFTER THEY BECAME THE INTERNATIONAL BANK FOR THE SAME CAUSE. ECONOMIC MARXISM: MARXISTS BELIEVE THAT THE POSITION OF A STATE IN THE INTERNATIONAL MARKET IS ONE CHARACTERIZED BY THE FAMILIAR CLASS STRUGGLE, SUCH THAT THERE ARE ECONOMICALLY DOMINANT AND SUBORDINATE STATES. THOSE STATES THAT ARE ECONOMICALLY DOMINANT, ARE RECOGINZED AS ABIDING BY CAPITALIST IDEALS, WHICH MARX SUGGESTED WOULD LEAD TO THE EVENTUAL DEMISE OF THESE STATES, ONLY TO BE PROVEN WRONG. HE SUGGESTED THAT THE RATE OF GROWTH WOULD SUPERSEDE THE ABILITY FOR AGRICULTURAL PRODUCTION ON A WORLD SCALE; FOLLOWING WITH A COLLAPSE OF THE WORLD MARKET--- LENIN - THOUGH THIS HAS YET TO HAPPEN. THE BIGGEST MARXIST CONCERN LIES IN THE VALUE OF LABOUR VS. THE REVENUE OF LABOUR, WHICH SUPPORTED THE NOTION THAT THE RICH GET RICHER AND THE POOR GET POORER. TARIFFS- TARIFFS ARE TAXATIONS PUT IN PLACE BY THE GOVERNMENT OF A STATE THAT IS IMPORTING GOODS. TARIFFS ARE MOST GENERALLY EXPRESSED AS REVENUE, ALTHOUGH IN ORDER TO PROMOTE THEIR DOMESTIC MARKET SOME STATES IMPLOY TARIFFS FOR PROTECTIONIST MEASURES. IN THIS SENSE, TARIFFS ARE SEEN TO PLACE A LIMIT ON THE FACILITY OF TRADE, HENCE THE REASON WHY LIBERALS PROMOTE FREE TRADE AND NON- TARIFFS BETWEEN STATES, FURTHERMORE AND OVERALL, INEVITABLY NATIONAL POLICIES WILL ALWAYS BE AT ODD S WITH INTERNATIONAL TRADE. OPPORTUNITY COSTS – COST OF THE BEST ALTERNATIVE TO YOUR CHOICE. TRANSACTION COSTS – THE COSTS INVOLVED WITH DISTRUBUTING YOUR GOODS INCLUDING TRANSPORTATION. ABSOLUTE ADVANTAGE – ADAM SMITH- ABSOLUTE ADVANTAGE SUGGESTS THAT A SINGLE COUNTRY IS BETTER THAN ITS TRADE PARTNER IN ALL AREAS COMPARATIVE ADVANTAGE – EVEN THOUGH A SINGLE COUNTRY MAY NOT BE GOOD IN PRODUCING ANYTHING, THEY SHOULD STILL TRY AND PRODUCE SOMETHING. PRINCIPLE OF RECIPROCITY – IF A STATE IS SEEN TO REDUCE TARIFFS IN A BI-LATERAL AGREEMENT, THE COUNTRY WHO IS ALSO INVOLVED IN THE BI-LATERAL AGREEMENT IS ENCOURAGED TO DO THE SAME AND RECIPROCATE THE LOWERING OF TARIFFS FAVOURED NATION PRINCIPLE – FAVOURED NATION PRINCIPLE SUGGESTS THAT A COUNTRY IN A BI-LATERAL TRADE AGREEMENT WHICH ALLOWS A CERTAIN RATE OF TARIFF SHOULD DO THE SAME WITH ALL THE OTHER TRADE AGREEMENTS FOR THE SAME PRODUCT WITH OTHER COUNTRIES. URUGUAY ROUND – 1986-1994. URUGUAY ROUND BROUGHT ABOUT 60 TRADE AGREEMENTS BETWEEN VARIOUS STATES FURTHERMORE DISCUSSING THE NEED TO INSTITUTUITIONALIZE TRADE AGREEMENTS IN ORDER TO HOLD STATES ACCOUNTABLE FOR UPHOLDING AND MAINTAINING TRADE AGREEMENTS. GLOBAL NORTH AND SOUTH: THE COUNTRIES WHICH ARE KNOWN AS THE “NORTH” ARE THOSE HIGHLY DEVELOPED, RICH, INDUSTRIALIZED NATIONS SUCH AS CANADA, THE US, AND MOST OF EUROPE. THE “SOUTH” ARE LATIN AMERICA, MIDDLE EAST AND SOUTHERN ASIAN COUNTRIES WHO ARE LESS INDUSTRIALIZED, WHO EXPERIENCE LOW INCOME AND POVERTY, AND WHO BASE MUCH OF THEIR INCOME ON THEIR AGRICULTURAL INDUSTRIES. THE ISSUE SURROUNDING THE GLOBAL NORTH AND SOUTH ARE CONTEMPORARY CONCERNS OF THE ENVIORNMENT AND THE NEED TO DE-INDUSTRIALIZE NATIONS IN FAVOUR OF GREEN ECONOMIES. CLEARLY THE NORTH IS ABLE TO SPEND MONEY ON GREEN INDUSTRIES TO BETTER THE ENVIORNMENT, THOUGH THE SAME CANNOT BE SAID FOR DEVELOPING NATIONS. THUS, THIS IS A CONNUDRUM FOR THE SOUTH WHO HAS YET TO GO THROUGH INDUSTRIALIZATION FROM WHICH TO GROW THEIR ECONOMIES AND FROM WHICH THE NORTH HAS ALREADY BENEFITTED FROM. GLOBAL SOUTH: THE MAJORITY OF WARS, WHICH CAN ALSO BE CHARACTERIZED AS INTRASTATE WARS, HAVE BEEN FOUGHT IN THE GLOBAL SOUTH, PARTICULARLY AFRICA. PAUL COLLIER NOTES THAT THERE IS A TENDENCY FOR WARS TO OCCUR AMONGST AND WITHIN IMPOVERISHED COUNTRIES. IS IT THAT POVERTY PRODUCES WAR, OR WAR PRODUCES POVERTY? FURTHERMORE, THE RECENT AFRICAN DROUGHT HAS WORSENED CONDITIONS ON THE CONTINENT, CAUSING A SCARCITY OF RESOURCES SUCH AS FOOD, SHELTER AND ACCESS TO EDUCATION. MODERNIZATION THEORY: THEORIZES THAT THE RELATIONSHIP BETWEEN THE NORTH AND THE SOUTH IS QUITE SIMPLE AND THAT IN ORDER TO BECOME SUCESSFUL THE SOUTH MUST FOLLOW IN THE STEPS OF THE NORTH. THIS IDEA SOUND RELATIVELY GOOD, THOUGH IN PRATICE IT IS DIFFICULT DUE TO ACCOMPLISH DUE TO INSTABILITY AND CONFLICT. IN ORDER TO SALVAGE MODERNIZATION THEORY, ONE MUST LOOK AT THE INSTITUTIONS WITHIN THE LEAST DEVELOPED COUNTRIES WHICH ARE UNABLE TO FACILITATE CHANGE AND GROWTH. THUS, THERE IS A NEED FOR INSTITUTIONAL REFORM FOR THIS THEORY TO WORK PROPERLY. HOBBSON & LENNIN – UNDERDEVELOPMENT IS A QUESTION OF INSITUTIONAL STRUCTURE, ALTHOUGH THE SOUTH IS ARGUABLY ON AN UNEVEN PLAYING FIELD, WHEREBY THE NORTH TAKES ADVANTAGE OF FREE-TRADE RATHER THAN FAIR TRADE SYSTEMS. WORLD SYSTEMS THEORY: EMMANUEL WALLERSTEIN- THE STRATIFICATION OF THE WORLD SYSTEM, IS AN EFFECT OF THE SOUTH’S (PERIPHERY) REDISTRIBUTION OF RESOURCES TO THE NORTH (CORE) DEPENDENCY THEORY: FERNANDO CARDOSO- THIS THEORY FUNCTIONS TO EXPLAIN WHY THE SOUTH IS IN SUCH A POSITION TODAY. TRULY, THE PROBLEM WITH THE SOUTH IS ITS HIGH LEVEL OF DEPENDENY ON THE NORTH SUCH THAT IT HAS NOT ALLOWED THE SOUTH ITSELF TO ACCUMULATE WEALTH AND GROW TECHNOLOGOICALLY, THOUGH THERE IS A DEPENDENCE ON RAW MATERIALS WHICH BENEFIT THE NORTH, NOT THE SOUTH. IMPORT SUBSTITUTION INDUSTRIALIZATION: EXPORT LED INDUSTRIALIZATION: GLOBAL COMMONS: INTERNATIONAL REGIME: KRASNER- IMPLICIT OR EXPLICIT NORMS OR DECISION MAKING PROCEDURE AROUND ACTORS EXPECTATIONS WHICH CONVERGE IN A GIVEN AREA OF INTERNATIONAL RELATIONS--- REGIMES ARE BETTER KNOWN AS INSTITUTIONS WHICH SHARE A COMMON AIM AND OBJECTIVE. ESSENTIALLY, INSTITUTIONS PROVIDE FOR THE RULES OF THE GAME, AND PUT FORTH THE COMMON VALUES, NORMS OF THE INTERNATIONAL COMMUNITY. MOST IMPORTANTLY, REGIMES FACILITATE CO-OPERATION, AS OUTLINED IN IMMANUEL KANT’S PERPETUAL PEACE. THOUGH WHICH GOES WITHOUT SAYING MAY ALSO FACILIATE A FREE-RIDER OR BANDWAGON SITUATION AMONGST STATES. ULTIMATELY REGIMES PROVIDE STABILITY AND PREDICTABILITY IN THE ACTIONS OF STATES. COST – REALISTS MAY VIEW INSTITUTIONS AS UNDERMINING THE SOVEREIGNTY OF THE STATE, AND TAKE AWAY DOMESTIC IMPORTANCE IN FAVOUR OF INTERNATIONAL ISSUES AND THE ISSUES THAT THE REGIME ENLISTS AS PRIORITY. REALIST PERSPECTIVE ON REGIMES AND REGIME INVOLVEMENT HAS MUCH TO DO WITH THE INCREASE OF POWER AND RELATIVE GAINS. A HEGEMON IS SEEN TO BRING ABOUT A REGIME ONLY BECAUSE IT BENEFITS FROM THE ARRANGEMENTS OF THE REGIME WHICH FURTHER A SPECFIC INTEREST. TRULY, INSTITUTIONS PLAY A WEAK ROLE IS DICTATING THE BEHAVIOUR AT THE STATE, WHEREBY AT ANY TIME A STATE CAN ACT REVERSELY OF REGIME GOALS IN ORDER TO FURTHER THEIR OWN INTERESTS—EX. BUSH AGAINST UN TO ENTER AFGHANISTAN. NEOLIBERAL PERSPECTIVE REFERS STRONGLY TO THE STATE OF ANARCHY AND THE CO-OPERATION WITH OTHER STATES IN ORDER TO SECURE YOUR OWN SECURITY FOR FUTURE ENCOUNTERS, TAKING INTO ACCOUNT THE SHADOW OF THE FUTURE WITH THOSE STATES ALSO INVOLVED IN THE REGIME. RE
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