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Chapter 6. The State Really Does Matter. Review. Concepts to Review Globalization Geographical embeddedness GPNs and TNCs Impact of 2008 financial crisis Convergence and divergence Key Words - PowerPoint PPT Presentation
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Chapter 6
The State Really Does Matter
Review• Concepts to Review
– Globalization– Geographical embeddedness– GPNs and TNCs– Impact of 2008 financial crisis – Convergence and divergence
• Key Words– Nation-state in globalization, varieties of
capitalism, GATT/WTO, development, national culture, borders and ‘borderlessness
Definition of the State• State, nation, nation-state, and nation without state• Hofstede
– Four dimensions: individualism, power distance, uncertainty avoidance, ‘masculinity’
• Schwartz– Seven-dimension scale: conservatism, intellectual autonomy,
affective autonomy, hierarchy, egalitarian commitment, mastery, harmony
• Both studies have in common the (debatable) idea that there are identifiable traits which vary across cultures
• Role of the state– Support markets– Provide physical and human infrastructure– Use globalization as means of increasing their power– Two types of macroeconomic policies:
• fiscal and monetary
Varieties of Capitalism• Liberal market economy
• Coordinated market economy• Neo-liberal market capitalism• Social market capitalism • Developmental capitalism• Authoritarian capitalism• Neo-authoritarian capitalism
• Are institutions and history inherent obstacles to convergence or will there be convergence to best practice in economic governance?
The State in the Global System• Most states are mixed economies: certain sectors
nationalized, others private• 1980s−2000s: deregulation/reregulation and privatization• Post-2008 government intervention begins again to
stimulate growth
• Trade regulation– GATT/WTO
• Strategies of newly industrialized states– ISI– EOI– EPZ
Strategies of States• States as competitors
– Locational tournaments, competitive bidding– Porter’s argument:
• Rivalries between domestic firms create pressures on firms to innovate
• Role of chance and of government
• States as collaborators– To achieve specific economic and welfare goals– Regional trade agreements:
• Have a number of motivations, e.g. defensive, influencing investment
• Types include free trade area, customs union, common market, economic union (give examples of each)
– Global activity is concentrated in mega-regions: North America, Europe and East Asia