Midterm 1

Question	Answer
IMF	International Monetary Fund (Part of Bretton Woods Agreement) Foreign international Financial aid (loans) -highly concessional
WB	World Bank (Part of Bretton Woods Agreement) Foreign international aid only to developing countries (loans) - highly concessional
Globalization is:	I). an active process of corporate expansion across borders and 2). a structure of cross-border facilities and economic linkages steadily growing and changing as the process gathers steam. 3). Globalization is also an ideology to reduce any resistance to the process PR strategy based on the following main arguments a) beneficial b) unstoppable (TINA)
Washington Consensus	1. Fiscal discipline (guarantee of fiscal discipline and a curb to budget deficits) 2. Redirection of public expenditure priorities toward improving income distribution: primary health care, primary education, housing, training and infrastructure (reduction to spending in military and public admin) 3. Tax reform (to lower marginal rates and broaden the tax base ) 4. Interest rate liberalization ( interest rates determined by the market) 5. Competitive exchange rate (to assist export led growth ) 6.Trade liberalization (abolishing import licensing and reducing tariffs) 7. Liberalization of inflows of foreign direct investment (promotion of foreign direct investment) 8. Privatization (of state enterprises, leading to efficient managr 9. Deregulation to economy(to abolish barriers to entry and exit) 10. Secure/protect property rights
Bhagwati’s assertion:	while globalization may be economically benign (in the sense of increasing the pie), it is socially malign (i.e. in terms of its impact on poverty, literacy, gender questions, cultural autonomy and diversity et. al.).
Bretton Woods Agreement	Background 1944 Bretton Woods system established an international economic order based loosely on the tenets of currency stabilisation liberalisation of international trade. Creation of WB and IMF SAP's
Friedman (theories/ globalization)	2 theories (Olive tree/lexus) - Globalization is international system , directly or indirectly influence the politics, environment, geopolitics and economics of virtually every country in the world.
The olive tree	All that is old and traditional What roots us to a place, culture or family
The Lexus	All that is new and innovative Drive for sustenance and improvement Global markets
Problem with Olive tree/Lexus	Lexus- has the potential to destroy the environment and uproot cultures Olive tree- when taken to excess(obsession), lead us into forging identities, bonds, and communities based on the exclusion of others.
10 ways to democratize the global economy	1. No Globalization without Representation 2. Mandate Corporate Accountability 3. Restructure the Global Financial Architecture 4. Cancel all Debt, End Structural Adjustment and Defend Economic Sovereignty 5. Prioritize Human Rights - Including Economic Rights - in Trade Agreements 6. Promote Sustainable Development - Not Consumption - as the Key to Progress Integrate Womens' Needs in All Economic Restructuring 8. Build Free and Strong Labor Unions Internationally and Domestically 9. Develop Community Control Over Capital; Promote Socially Responsible Investment 10. Promote Fair Trade Not Free Trade
SAPs	Structural Adjustment Policy (Bretton Woods)
Bhagwati (econ. globalization def/reaction)	Economic globalization constitutes integration of national economies into the international economy through trade, direct foreign investment Reaction to globalization: trilogy of discontent (Anti-capitalism Anti-globalization Anti-corporation mind set. Base – socially, environmentally concerned focus groups without specific ideological leanings. Mass anti-globalization protests)
Ritzer (Skeptics/globalists/whether there is a legitimacy to globalization concept.)	Skeptics: there is no such thing as globalization because vast parts of the globe and a significant part of the world's pop. are wholly or significantly excluded from this process. (globalists respond although people may be relatively uninvolved, it doesn't mean that they are unaffected) Globalists: see a broad process of globalization(to skeptics there is not one globalization and globalization is an oversimplification) Other views of globalists are a belief in a cyclic-process (long-term), there are 6 waves (epochs) many possible points of origins, modern changes or not
Bhagwati (4 reasons)	1. Far too many among the young see capitalism as a system that cannot address, meaningfully, questions of social justice. 2. The anti-capitalist sentiments are particularly virulent among the young who arrive at their social awakening on campuses in fields other than Economics. English and Comparative Literature and Sociology are a fertile breeding ground. 3. Many of these students are also susceptible to the bitingly critical view of economics specifically of the "anarchy of capitalist production“ 4. The new global media – allowing the young to see and be anguished by the poverty and the civil wars and the famines in remote areas of the world but have no intellectual way of coping with it rationally in terms of appropriate action.
Foreign Aid	Official Development Assistance(ODA) 3 types- public resources that are loaned at lenient terms or given by a government to - another gov. -an NGO - an international organization (ex. WB)
SAPs	-Washington Consensus”, Structural Adjustment Policies (SAPs) have been imposed to ensure debt repayment and economic restructuring. reduce spending on health, education and development, while debt repayment and other economics policies have been made the priority. -In effect, the IMF and World Bank have demanded that poor nations lower the standard of living of their people.
Good/bad dichtonomy	1. Good / bad dichotomy (depending on the ideological affiliation) 2. New - old phenomenon dichotomy (depending on the specific definition) The only consensus so far is that there is no consensus.
SAPs issues	1) SAPs do not establish a base for increased per capita incomes. 2) SAPs improve government balance sheets 3) SAPs cause increased poverty and unemployment rates 4) To mitigate these harsh the IMF have created social investment funds. (alleviate hardship through temporary job and social service programs)
Phase 1	ECONOMIC STABILIZATION Short-term macro stabilization policy 1) Currency devaluation 2) Price liberalization 3) Taking control of the Central Bank 4) Reducing state investment
Phase 2	STRUCTURAL REFORM 1) Trade Liberalization 2) Privatization of state enterprises 3) Tax reform 4) Deregulation of the Banking System
Key Problems	- SAPs have major social and environmental implications - Saps may achieve narrow economic objectives, but many economic gains are based on unsustainable natural resource extraction and exploitation of cheap labor, thereby perpetuating poverty. - SAPs have been negotiated in secret, triggering civic protest against these undemocratic and nontransparent programs and leading to high rates of program failure.
SAP’s success	in achieving specific objectives such as privatizing state enterprises reducing inflation decreasing budget deficits SAPs benefit a narrow stratum of the private sector involved in export production trade brokering well-connected (national) elites transnational corporations

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	Created by Aileen Murphy over 7 years ago