PO420: GLOBAL POLITICSUNIT 9: INTERNATIONAL POLITICAL ECONOMY

AND DEVELOPED COUNTRIESAND

THE POLITICS OF DEVELOPMENT

Dr. Murat Arik

School of Legal Studies

Kaplan University

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OUTLINE

I. Final Assignment

II. International Political Economy

I. What is it?

II. Theories of International Political Economy

III. Free Trade and Protectionism

IV. Global Financial System

I. Exchange Rate and Euro

II. IMF and World Bank

V. Development: Concept and Theories

VI.Factors Affecting the Politics of Development

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I. FINAL ASSIGNMENT

• TOPIC: An Analysis of the Relationship Between Emerging and Industrialized Countries

• DESCRIPTION: Choose one emerging country. Discuss what help it has received from the industrialized world. Please make sure to cover the emerging country’s literacy rate, economy, health care, environmental sustainability, and civil rights. Many of the resources form the Web Field Trip’s and Extra! Extra! will be helpful in completing this assignment.

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I. FINAL ASSIGNMENT

• RESEARCH QUESTIONS TO ANSWER: Thoroughly analyze the relationship this emerging country has had with industrialized countries and answer the following questions:

• 1. Was the help from the industrialized world helpful? Why or why not?

• 2. How did this help impact the culture? • 3. What changes have taken place, both good

and bad, that have impacted this country? • 4. Dig deep and look at how policies and

strategies can impact a cultures beliefs and values.

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I. FINAL ASSIGNMENT: CHECK LIST

Checklist for the Unit 9 Assignment: An Analysis of the Relationship Between Emerging and Industrialized Countries Criteria: Ask yourself the following questions. Not Yet Yes

Content Did you identify an emerging country? Did you identify policies and strategies between an emerging and an industrialized country that relate to the five following categories? 1. economic 2. health 3. literacy 4. environmental sustainability 5. civil rights

Did you relate how the policies and strategies between an emerging and an industrialized country have had an impact on the emerging countries culture in the following categories? 1. economic 2. health 3. literacy 4. environmental sustainability 5. civil rights

Did you examine (analyzes) what changes have taken place, both good and bad in the emerging country based on the policies and strategies enacted between the emerging country and the industrialized country?

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I. FINAL ASSIGNMENT: CHECK LIST

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Research

Is your research current? Did you use at least two credible sources beyond the text material and validate those resources credibility? Did you demonstrate the ability to retrieve documents through advanced searches, refine search strategies, and explain strategies used to refine the search? Did you discuss all the required areas in a substantive manner? Did you use appropriate reference material to support major statements? Quality Is your content complete enough to address the topic and questions? Is there a logical flow to your ideas? Did you present the material in a clear and concise manner to provide easy readability?

I. FINAL ASSIGNMENT: CHECK LIST

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Must haves in your paper!Title example: Climbing the Ladder: A story of a cat and a boyI.Introduction (nice introduction with a thesis)

I. Cats like climbing up treesII. Following the cat is a dangerous thing for a small boyIII. It is likely that boy will hurt himself if he continues to

follow the cat

II.Explain the first question hereIII.Second questionIV.Third questionV.Fourth questionVI.Conclusion (similar to introduction!!!)

II. INTERNATIONAL POLITICAL ECONOMY:WHERE POLITICS AND ECONOMICS MEET

• What is it?

• The way international influences affect domestic economics and politics

• The impact of domestic forces on global political and economic relations

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II. THEORETICAL PERSPECTIVES ON INTERNATIONAL POLITICAL ECONOMY

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III. WHAT ARE FREE TRADEAND PROTECTIONISM?

• Bretton Woods system

• Free trade is encouraged

• The U.S. assumed leadership role for a smooth functioning of the system

• International monetary relations fixed into gold

• GATT (for free trade) and IMF and World Bank emerged

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III. WHAT ARE FREE TRADEAND PROTECTIONISM?

• Why Free Trade?

• It benefits everyone:

• competition among companies create low cost goods and services; increase quality of available goods and services; and increase the variety of goods and services sold.

• Competition also creates efficiency

• A rising tide lifts all boats

• Positive-sum game

• Comparative advantage•10/19/2011 •11

III. WHAT ARE FREE TRADEAND PROTECTIONISM?

• Protectionism?

• Creating barriers to free trade

• Rationale• For national security reasons, the countries should

produce certain things even though the country may have a comparative disadvantage in doing so.

• To achieve a diversified economy, countries should promote their own industries. Infant industry argument is often used for this purpose.

• Rational choice approach emphasizes domestic political considerations for the protectionism.

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III. WHAT ARE FREE TRADEAND PROTECTIONISM?

• Protectionism?

• Balance of trade: difference between inflow of money (exports) and outflow of money (imports)

• You often hear balance of payment deficit or surplus

• Balance of trade may be manipulated by the protectionist policies

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U.S. INTERNATIONAL TRADE BALANCE, AUGUST 2002–AUGUST 2004

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CHINA’S TRADE BALANCE

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THE MAIN U.S. TRADING PARTNERS BY PERCENTAGE OF TOTAL U.S. TRADE

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III. WHAT ARE FREE TRADEAND PROTECTIONISM?

• Tools of Protectionism?

• Tariffs (tax on imports)

• Quotas (quantitative restrictions)

• Nontariff barriers

• Trading blocs

• WTO deals with issues involving trade disputes

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SHARE OF WORLD MERCHANDISE EXPORTS

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IV. GLOBAL FINANCIAL SYSTEM

•Exchange rate plays important role in international trade

•Devaluation of currency may have important implications for a country’s industry

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IV. GLOBAL FINANCIAL SYSTEM

• Euro Zone

• To create a stable monetary environment

• To achieve a true single market

• Benefits of competition because of the transparency of prices

• Political reasons (countering the US dominance)

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IV. MANAGING THE INTERNATIONALMONETARY SYSTEM

•The International Monetary Fund

•The World Bank Group

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MEMBERS WITH TEN LARGESTQUOTES IN THE IMF, 2007

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V. DEVELOPMENT: CONCEPT AND THEORIES

• Development as a concept is hard to define• Poverty is often used as an important

measure• Income measured as purchasing power

parity is often used to classify countries by development level

• Millennium Goals to improve living conditions in developing countries

• Could be defined as improvement in economic, political, and social conditions in a country

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RELATIVE WEALTH OF NATIONS: PURCHASING POWER PARITY, IMF 2006

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V. MILLENNIUM GOALS?

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POVERTY COMPARISON

V. CRAFTING A DEFINITION OF DEVELOPMENT

• Classifying the World’s Countries• First World• Second World • Third World • Fourth World

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PEOPLE LIVINGON A DOLLAR A DAY

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VI. THREE MAIN THEORETICAL APPROACHES

• Economic Liberalism• Neoliberalism in Practice• Neo-mercantilism and Economic Nationalism• Neo-Marxism and Dependency

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V. THREE MAIN THEORETICAL APPROACHES

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THE DEPENDENCY EXPLANATIONOF HOW THE RICH EXPLOIT THE POOR

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VI. WHAT FACTORS AFFECT THEPOLITICS OF DEVELOPMENT?

• Colonial Legacy (political institutions, economic systems, inadequate infrastructure, and ethnic, religious, linguistic divisions, etc.)

• Economic and Human Health Factors (human development, income inequality)

• Government Factors (lack of government legitimacy, lack of government power and authority in the countryside

• Violence within and between Developing Countries (military elites, cultural factors)

• Role of Globalization and Relations with Developed States

• Role of Non-Western Political Thought• Role of Ethnic and Religious Nationalism•10/19/2011 •32

TURBULENT AFRICA

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