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World Economy L5 & L6
Transcript of World Economy L5 & L6
Way out: resources vs. aid
Specific Economic Models?!
Developed vs./& Developping Countries
L5&L6: Developed and Developing Economies
Challenges in Developped Countries
Inequality between national groups
World competitiveness (ex: consumption patterns)
Finding the right policy mix (see national models)
Ensuring the benchmark of 'Human Development'
Challenges in Developping Countries and LDC
Inequality between nations
Bridging the developmental gap (e.g. extreme poverty)
Developing competitive economic activities
Protecting their specific interest and developmental path
3 analytical dimensions
l: the implications and consequences of globalization for the capacity and autonomy of the nation state
the interpretation of the opportunities and constraints associated with globalization, and the consequent appeal made to the language of globalization
the role of political actors in the political “authoring” of globalization and the processes which either sustain or impede its development
Globalization is not a tendency that is furthered in the absence of political actors. Thus, the need to focus on the politics of globalization.
the bottom ?!
: state retrenchment is inevitable
the heightened mobility of capital is a disciplining element in state behaviour --> National economies are pitted against each other in an endless cycle of competition
Big government is rendered increasingly anachronistic
“Competitive deregulation” Race to the bottom in social & environmental standards
Hyperglobalization thesis (Hay - C10- Ravenhill)
Core assumptions (relating to FDI):
Capital invests where it can secure the greatest net return and has perfect information to make decisions
Markets for goods and services are fully integrated globally and that national economies must constantly compete against each other
Capital enjoys perfect mobility & the cost of “exit” is zero
Capital will invariably secure the greatest return by minimizing its labour costs & by relocating its productive activities in economies with the lowest rates of taxation
Welfare state has no positive externalities for the competitiveness and productivity of the economy
The hyperglobalization thesis extrapolates wildly and inappropriately from labour-intensive sectors to the global economy more generally
The core assumptions can be adapted to capital and financial markets
The assumptions in the case of financial markets are more plausible but rest on empirical claims that have to be substantiated
The core assumptions are all problematic, or false, when juxtaposed against reality/evidence
Developing and LDC countries - losers or winners of world economic integration?
Resources - blessing or curse?!