POL SCI 20 Chapter Notes - Chapter 7: Business Cycle, World Politics, Sweatshop
Document Summary
Chapter 7 international financial relations outline. Brothers: transmitted into a global decline, government enacted a spending package to stimulate the economy ix. Foreign direct investment: what role do multinational corporations. Conclusion: the politics of international investment: finance is most globalized portion of international economy, both foreign loans and investment have positive and potentially negative effects. Investors and receiving countries have a common interest in moving capital from where it is abundant to where it is scarce. Capital movements provide cheaper capital for borrowers and higher profits for investors. Conflicts of interest between investors and host countries arise over the division of profits from direct investments. There are strong incentives for host nations and international investors to cooperate to secure the property rights of foreigners. Governments and lenders often end up bargaining over international debt and over the terms of repayment. Debtors can threaten default and other reductions of payments, while creditors can threaten.
