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Globalization and Its Discontents

Globalization and Its Discontents. IR Theories on the EU. Liberalism Institutions Domestic politics and intergovernmental bargains Functionalism – functional spillover Constructivism Norms of democratic community Realism?. Globalization.

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Globalization and Its Discontents

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  1. Globalization and Its Discontents

  2. IR Theories on the EU • Liberalism • Institutions • Domestic politics and intergovernmental bargains • Functionalism – functional spillover • Constructivism • Norms of democratic community • Realism?

  3. Globalization • Globalization: Global networks of interdependence (Nye 2004) • Interdependence: mutual dependence of actors across different parts of the international system (Keohane and Nye 1977) • “…globalization is about connections between different region of the world-from the cultural to the criminal, the financial to the environmental-and the ways in which they change and increase over time….”(Held et al. 1999)

  4. Elements of Globalization • Trade • Exports: $66bn (1960) -$7,100bn (2002) • International finance • FDI: $68bn (1960) $7,100(2002) • Multinational corporations • 3,500 (1960) to 65,200 (2001) • Regional integration

  5. Elements of Globalization • Cultural globalization • Disease • Environmental interdependence • Population and migration • Transnational trafficking networks • Transnational terrorism

  6. Trends: FDI Flows

  7. Trends: Trade Flows

  8. Sources of Globalization • Technology • Triumph of liberalism • Francis Fukuyama: The End of History? • Washington Consensus • Institutions • WTO • International Monetary Fund (IMF) • World Bank

  9. Is Globalization Good or Bad?

  10. Benefits of Globalization • Access to information • Access to goods • Access to technology • Access to capital

  11. The Risks of Globalization • States lose control • Heightened vulnerability • Benefits distributed asymmetrically • Economic objectives trump social, cultural, environmental objectives

  12. Case: From the Asian Miracle to the Asian Financial Crisis • The miracle: • South Korea: 7%-8%average growth 1970s-1990s; • Thailand: 7%-8.5% growth rate 1960-1980s • 1990s: rapid financial market liberalization • 1997 Financial Crisis • Thailand: fear of currency devaluation->sell baht->currency devaluates->capital flight; financial instability; • Korea: rumor that economy in trouble/bank will not renew loans -> banks unwilling to renew loans ->economic trouble due to high indebtedness • Korea: GDP -7%; Thailand: GDP -11%

  13. Case: Intellectual Property Rights(Biopiracy) • Mexican yellow bean • Larry Proctor (Colorado) patent on “Enola” bean, originally from Sonora (Mexico) • Basmati rice • RiceTec Inc (Texas)-Texmati Rice patent

  14. The global banana • Distribution of a dollar of retail revenue: • Producer income $0.05 • Export costs $0.04 • Transport $0.11 • Import license $0.09 • Ripening process $0.05 • Taxes $0.15 • Distribution/retail $0.34 • Profit $0.17 Source: Lipschutz,2004, p. 2

  15. The Backlash: Seattle 1999

  16. Solutions, Solutions….The Role of Institutions • Keynesian welfare politics? • Domestic institution? • Gradual liberalization, mitigated by government policies? • Strengthen international institutions? • Tackle poverty?

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