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Chapter 8

POL114H5 Chapter Notes - Chapter 8: Informal Sector, Neoliberalism, Structural Adjustment


Department
Political Science
Course Code
POL114H5
Professor
E D Schatz
Chapter
8

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CHAPTER 8: THE GLOBAL ECONOMY: GROWTH, PROSPERITY, CRISIS, AND INEQUITY
1. Political Convergence/ Integration :
Economic globalization and interdependence
The development of international organizations and the expansion of
international law
The growing volume of international communication and travel
The development of a global civil society of non-governmental organizations
Efforts to promote and strengthen democratization; and reduced friction between
the great powers.
Ex: NAFTA, EU WTO
2. Regional Economic Integration:
EU : Member states developed a monetary union that resulted in the
establishment of a common currency, the Euro.
Example of pool sovereignty (not completely given up their sovereign power);
Countries in the EU remain politically sovereign, but have agreed to share
decision making responsibility and have placed some authority in the hands of
the EU.
NAFTA, ASEAN, APEC
3. Political Divergence/ Fragmentation:
Can be identified in the divide between rich and poor and the information haves
and have-nots
The disintegration of states
Interstate and intrastate conflict
Ethnic, religious, and factional tension and violence
The development of regional trading blocs; friction between world cultures
The impact of environmental degradation as a cause of social tension or conflict.
The global economy is part of a broader competitive arena in which states pursue their
interests.

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CHAPTER 8: THE GLOBAL ECONOMY: GROWTH, PROSPERITY, CRISIS, AND INEQUITY
4. “Winning state” : industrial supremacy, technology and information leadership, and
economic capacity to sustain a modern military.
5. “Losing state” (face problems created by reduced fiscal resources): unreliable economic
growth, permanent relegation to the ranks of the resource extraction, second-rate
technology and information systems and lack of economic means to escape poverty.
6. Realists:
Argue that governments are primarily concerned with the health and security of the
nation-state itself
The economy is largely a means to maintain or increase that power: the global
economy is part of a broader competitive arena in which states pursue their self-
interests.
The primacy of security has shifted with the end of the Cold War to economics.
The economic competition between states is cast in zero-sum terms.
A gain for one side is seen as a loss for another.
7. Liberals:
Through comparative advantage, a world adhering to the principles of free trade will
reap the benefits of the efficient use of capital and resources. (& Neo)
Neoliberals: argue that state intervention only creates more obstacles to market
activity.
Liberal “global governance” approach: a post nationalist international society can
emerge with deliberate cooperation and institution building, but the global
marketplace should not be subject to extraordinary controls or be responsible for the
redistribution of wealth.
Keynesian liberals : argue that the recession was due at least in part to weak
government regulation and oversight of large banks and other financial institutions on
Wall street, and that government deficit-based spending during a financial crisis is
the only path to recovery.
8. Neomarxists: global economy is characterized by the spread of world capitalism, which
is defined by a system that protects wealth and capital while disciplining labour in
globally organized modes of production, all serve a transnational economic elite.
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