IR Final Exam Study Guide PDF

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1. What does Rodrik ague about maintaining the gains from globalization and how should countries go about doing this? • Rodrik argues that the international trade/global trade regime lacks widespread support among ordinary people • Ordinary people must be able to see/reap the benefits of globalization • Social programs and regulations must be protected, domestic social contracts must be renewed, and locally tailored growth policies must be pursued domestically • Advocates for the liberalization of the global labor market, arguing that “labor markets are the unexploited frontier of globalization” and that opening the world’s labor markets could potentially provide huge benefits, especially to the world’s poor, and have a large impact on global incomes • Rodrik proposes a temporary work visa scheme that allows skilled and unskilled workers from poor nations to fill up jobs in rich countries for up to five years and then return home (return ensured by home and host countries) while a new wave of workers replaces the old one o Could produce an estimated gain of $360 billion annually o Could spark domestic growth in workers’ home countries • Rodrik also thinks that the global system should leave China and other emerging nations free to pursue their own growth policies, given that domestic growth makes the entire global economy better off o Also thinks that the global system should ensure that rising economic powers do not produce large negative effects for the rest of the world in the form of trade surpluses 2. Stages in the process of economic integration—what are characteristics of each stage (free trade area, customs union, etc.)? • Free trade area o Eliminate barriers to trade among member states o Ex. NAFTA/USMCA (trade agreements) o 1994-present (?) • Customs union o Add a common external tariff: each member has the same trade politics (tariffs, quotas) for goods from third countries o Early decades of the EU (1969-1992) o Harder to negotiate • Common market o Adds the free movement of labor (people) and capital with few to no restrictions o EU after 1992 (people in the EU are free to move around the EU for jobs) • Economic and monetary union o Adds coordinated economic policies coming from a single central bank o Common currency o EU after 1999 (for the 19 participants in the EMU—the central bank of the EU) • Political integration/political union

o Requires much more to be politically integrated then to be economically integrated o EU has not become a full political union and looks as if it is unlikely to in the near future (very complex, could infringe on state sovereignty) 3. Types and characteristics of multinational corporations • Natural resource oriented MNCs o Investment is undertaken in order to acquire secure access to raw materials o Ex. Oil and mining companies o Historically, natural resource oriented MNCs have been the most important motivation for investment in developing countries o Take advantage of strong local incentives for production (where resources are) § Resource endowments drive this kind of investment • Market oriented MNCs o Investment for the purpose of selling to consumers in that market o Ex. Automotive industry § U.S.: BMW, Mercedes, Honda, Toyota (produced in the U.S. for the U.S. market but are not American companies) § Europe: Ford, GM, Nissan (produced in Europe for the European market but are not European companies) § Want to exploit low costs and to surmount protectionist barriers or tariff barriers so that it is more cost effective to build the car where it will be sold rather than to import it o Look for large markets and intangible assets (production process knowledge) § Look for locations where the local population can produce what they want to be produced § Also looking for access into a good market o Historically, market oriented MNCs have been the most important motivation for investment in advanced industrialized countries • Efficiency oriented MNCs o Investment undertaken to reduce the cost of production: cheap labor, lax regulations, lower taxed, etc. o Ex. Electronics and computers § Labor intensive aspects of production are moved into labor abundant countries § Capital intensive aspects are retained in advanced industrialized countries o Historically, this has been a primary motivation for MNCs to engage in foreign direct investment (FDI) § Has become centrally important during the last 20 years § Developing country governments often try for this kind of FDI 4. Potential benefits and drawbacks from foreign investment • Potential benefits of MNCs: o Transfer savings from advanced industrialized countries to the developing world

o Brings capital goods and technology to countries where both are scarce o Creates jobs in developing countries that would not otherwise exist o Provides management expertise o Provides links to international marketing networks • Potential drawbacks of MNCs o MNCs “crowd out” local investment, reducing the amount of local investment § When an MNC comes into a local market, domestic/local firms cannot compete and can be driven out of business o Can drive local firms out of business o May become enclaves § Develop few/no linkages with the local economy and not have any real benefit o Internal transfer pricing § When a firm sets up shop in a developing country and starts exporting things, it can set the prices it wants § In a developing country, the firm can set the price internally that may not reflect the global competitive price § Essentially a market distortion that might not be fair o Often have propriety control over technology, and thus do not transfer technology or managerial expertise § Developing country might want investment from high tech firms because a lot of technology transfer can happen, bringing opportunities to a local community § Google might have some strong incentives to not share their technology o Exploit workers in developing countries (the sweatshop issue) § Low wages, excessive overtime § Abusive treatment, bonded labor/indentured servitude, child labor • Additional questions to consider: o Is it right to apply rich-world standards to poor countries looking for jobs and investment? o Is there a “race to the bottom”? If so, how can it be combatted? o Are MNCs an agent of colonial exploitation? o Do MNCs represent the only hope for poor countries to catch up to rich ones? (better sweatshops than no shops) 5. How do Scheve and Slaughter explain falling support for globalization in rich countries? • U.S. public, as well as the rest of the world, is becoming more protectionist o A narrow set of industries, like agriculture and apparel manufacturing, have been harmed by freer trade, and as a response, have lobbied hard to turn lawmakers against liberalization o Policymakers and the business community have failed to adequately explain the benefits of freer trade and investment to the public o The need to balance economic interests with national security concerns has resulted in a more protectionist stance

Increased wealth disparity: high earners continue to do well while lower wage workers’ income has stagnated or fallen o Mean real money earnings rose for workers with doctorates and professional graduate degrees and fell for all others • U.S. economic policy is becoming more protectionist 6. What does Rodrik say about the gains from future trade? What should we concentrate on instead? • Free trade implies winners and losers • Notes the larger redistribution to efficiency gains: although the economy as a whole is better off, some groups are disproportionately affected • As the economy becomes more and more liberalized, the net gains get smaller • There are aspects of globalization and free trade that the public is uninformed of: that only under certain specific conditions, and assuming beneficiaries can be taxes and “losers” of free trade can be compensated, freer trade has the potential to increase everyone’s well being o When economists oversell globalization by presenting an incomplete case for it, they lose an opportunity to educate the public and they lose credibility 7. Be able to compare and contrast modernization and dependency theories of development. What does each say about reasons for underdevelopment and strategies for generating development? Where are obstacles to development, according to each theory? •

Modernization Theory • Rooted in neoclassical economics • Optimistic about prospects for development • Obstacles to poor country development are internal • Modernization will lead to democratization -Traditional societies are characterized by traditional authority structures, extended kinship networks, little social mobility -Modern societies are characterized by high rates of social mobility, highly differentiated political structures, nuclear family -Adopting “modern” economic policies will lead to economic growth • The process of modernization is one that is universal and will work similarly across all countries

Dependency Theory • Origins in Marxist thought; a Marxist application to economic development theory • Pessimistic about possibilities for development • Obstacles to poor country development are external -Poor countries lose out by exporting raw materials and commodities because returns for exporting raw materials do not change much over time -Core-periphery relations are key; focus on historical patterns to explain present-day situation • Capitalism was introduced to developing nations on terms that are very favorable to developed nations -Bias of international institutions and role of MNCs maintains this system

-MNCs prioritize profit returned to rich countries -MNCs help support the uneven structure of the international system which disproportionately favors rich countries -Policy prescription: close off markets to imports; develop local industries (“Import Substitution Industrialization”) -Refers to poor countries following policy prescriptions would be expected to close off their markets to imports through tariffs, quotas, etc., and instead, make those products that were preciously imported at home -Maintain autarky until local industries can be more competitive in world markets, maybe then open up and export -Making developing countries more industrialized and more selfsufficient

8. Why did foreign aid drop off after the Cold War? • The general decline in foreign aid spending in the 1960s/post Cold-War can be explained by: o Cold War-era foreign aid was aid that was intended to serve the strategic interest of containing communism § Both parts of the bilateral partners spent a lot of money in foreign aid to prop up allies § Foreign aid was a political mechanism o There are many stories of corruption associated with the Cold War-era aid 9. Where does the U.S. send most of its aid and why? • 1994: Israel, Egypt, Russia (trying to prevent Russia from returning to Communism after the collapse of the Soviet Union) • 2004: Iraq, Israel, Egypt, Afghanistan • 2010: Israel, Afghanistan, Pakistan, Egypt • Primarily for political interests 10. What form does most foreign aid take? • Most foreign aid is bilateral o Significant amounts of aid ARE NOT often given through multilateral institutions/agreements like the UN

o States want credit for giving aid and thus, prefer bilateral aid through multilateral aid § Can also likely enforce certain conditions and provide specific objectives for use o Aid from one government to another, not from a foundation, nonprofit, or MNC § Comes out of a pool of resources, government budgets and is done through taxes • About 80% of foreign aid is bilateral from developed nations 11. What are the main debt-relief campaigns underway and where have they been targeted? • World Bank/IMF for “Highly Indebted Poor Countries (HIPCs) o Goes to approximately 40 countries o Conditional debt relief from rich country governments and IGOs • Jubilee Campaign for debt relief (NGO based, linked to the Catholic church, among other institutions) o Advocates unconditional debt relief 12. How is international law different from domestic law (within states) and similar to domestic law? • International law: o Reflects power relationships (not always equality before the law) o Rests on custom (just as domestic law often builds on custom) o Relies on states to enforce the law against others o Some adjudication (court system), but varies in strength and across issues o Legislation is limited and decentralized (again, varies across issues) 13. What are two main sources of international law and how do they differ? How is each typically expressed? • Treaties: written conventions signed by states; the most important source of international law o Treaties, once signed and ratified, must be observed o States violate the terms of treaties they have signed only if the matter is very important or if the penalties for such a violation seem minimal or unimportant o In the U.S., treaties ratified by the Senate are considered the highest law of the land, equal with acts passed by Congress o Treaties are binding on successor governments whether the new government takes power through an election, coup, or revolution o Although revolution does not free a state from its obligations, some treaties have built-in escape clauses that let states legally withdraw from them, after giving due notice, without violating international law o UN Charter is one of the world’s most important as it contains implications that are broad and far reaching o 1949 Geneva Conventions define the laws of war regarding the protection of civilians and prisoners, among related issues • Custom: if states behave toward each other in a certain way for long enough, their behavior may become generally accepted practice with the status of law

o Western international law tends to be positivist in this regard—it draws on actual customs, the practical realities of self-interest, and the need for consent rather than on an abstract concept of divine or natural law 14. Skeptic vs. idealist perspectives on international law—be able to explain some arguments from each position Skeptic • International law isn’t enforceable, so it’s not really a law • International system is not a society, has no police force, and has no legislature • Lots of lawbreaking internationally • Laws can be bent to serve any nation’s self-interest • The powerful, in particular, can ignore international law • Where law should matter most— the use of force—it is useless

Idealist • Law provides predictability and fulfills certain notions of justice • An international society seems to be emerging; there are many international—and nearly global— agreements • Laws are always violated to an extent, but if law didn’t matter, why would states try to justify their behavior in legal terms? • Nations have a self-interest in some sort of legal order • Compliance with international law is the rule, not the exception

15. Different types of explanations for why states comply with international law • Orderly framework, predictability o States may forego short term interests to have the security of long-term predictability • Fear of punishment or reprisal o Direct reprisal from other states, sanctioning by IGOs (WTO, UN) o Punishment by domestic courts § Ex. U.S. MNCs sued U.S. courts for alleged violations of rights in developing nations • Reciprocity and reputation o Fits with neoliberal institutionalist ideas o Institutions allow for states to gain a certain reputation through promoting cooperation • Shared sense of what is appropriate o Fits with constructivist ideas 16. Main bodies of the UN: be able to offer a short description of each • General Assembly o One country, one vote; includes all UN members o Resolutions pass with 2/3 vote but are not legally binding o Controls finances for UN programs, including peacekeeping • Security Council o 5 permanent members with veto power: U.S., U.K., France, China, Russia o 10 rotating members with two-year terms and no veto power

o Veto power enjoyed by the permanent members protects state sovereignty but biases the UNSC toward inaction § Ex. UN did not accomplish much during the Cold War because two permanent members kept vetoing each other o Security Council resolutions are legally binding on all members o UNSC may authorize troops, under UN or national command § Can legitimize actions by one of its members if it approves of that action, even if it is not action by the UN itself • Secretariat (led by the Secretary General) o Head of the UN o Serves a five-year renewable term o Nominated by the General Assembly, approved by the Security Council o Currently Antonio Gueterres 17. Controversies over peacemaking vs. peacekeeping roles of UN forces in conflict-torn countries • UN troops are borrowed from members, under neutral command, and don’t take sides • Over time, UN troops have increasingly become involved in civil wars rather than in international wars • A more activist role may include enforcing cease fires, breaking up warring factions, and halting genocidal acts 18. Differences between soft and hard law, especially as it relates to humanitarian intervention to solve human rights issues • Soft law refers to norms and principles not enumerated in treaties o There are global standards for the treatments of citizens of all countries, but this can run counter to state sovereignty • Hard law refers to treaties o There has been a move towards individuals, rather than states, as subjects of public international law § Begins at Nuremburg and carries through to Yugoslavia § Disassociates human rights violations from the states and puts the responsibility on individuals § Entire country of Nazi Germany was not put on trial, but individuals were o UN Charter on Human Rights 19. Why is human rights law expanding? 20. Be able to name some examples of human rights law • The ICC: the first permanent court established to try individuals for violations of international law, including genocide, crimes against humanity, and war crimes o The ICC is empowered to prosecute anywhere in the world, as long as the crime has occurred in a signatory country OR the accused is from a signatory country • Violence against women: o 1976: International Tribunal on Crimes Against Women (involved 2000 activists from 40 countries) o The first UN survey on violence against women was published in 1989

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o 1993: Vienna Conference on human rights married women’s rights and human rights o There are large current debates on prostitution o Also, there are strong initiatives on female circumcision/genital mutilation Slavery: o Perhaps over 10 million people in forced labor situations o Trafficking is still a problem o UN has targeted traffickers in various forms through numerous conventions targeting migrant workers, child labor, and the sex industry o Anti-slavery international is an NGO founded in the UK in 1839, which is very influential Genocide: o The Genocide Convention was adopted in 1948 and defines genocide as an “intent to destroy, in whole, or in part, a national, ethnical, racial, or religious group” o Failed in Cambodia in the 1970s o Bosnia, Kosovo, Rwanda, Darfur § UNGA labeled Serbia’s actions as a form of genocide in 1992 resolution (later contradicted by the ICJ in 1997) § Kosovo was never ruled a genocide § Rwanda was definitely a genocide, but it occurred too fast and the outside world was not interested enough to take action § The U.S. labeled Darfur as a genocide, but the Un did not act o Signing up for the Genocide Convention and labeling something as a genocide creates an obligation to act The UN and human rights o The UN Charter had seven references to human rights and creates the responsibility to promote respect for human rights, although it does not define “human rights and fundamental freedoms” o Universal Declaration on Human Rights (1948) § UNGA resolution that built on the UN Charter § Civil and political rights, social rights § 2006: Human Rights Council (HRC) was created in response to criticism • 47 members, selected by the General Assembly for threeyear, renewable terms • Reports to the General Assembly • Received criticism because some members of HRC have violated human rights and have promoted Israel § UN High Com...