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• This chapter deals with the
transformations of the interstate
system. it discusses the elements of
the contemporary interstate system

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as well as different views on its
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character and the nature of its
actors. It also discusses the changes
in the construct of sovereignty and
territory.
• It explains the role of states in
internatinal affairs and the
transformations that have occurred.
It elaborates the growing role of

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non-state actors. It also examines
the impact globalization on the
interstate system.
FOR A LONG TIME, STATES HAVE BEEN
THE DOMINANT ACTORS IN THE
INTERNATIONAL AFFAIRS. THE

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INTERSTATE SYSTEM HAS BEEN
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ORGANIZED AROUND THE PRINCIPLES
OF SOVEREIGNTY, TERRITORIALITY, AND
NON-INTERFERENCE.
The Interstate System
The idea of a 'system' requires the
existence of units, among which
interactions take place (Buzan 1993).

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In the interstate system, the units are
the states, and their interactions
include war, diplomacy, and
cooperation.
The Interstate System
The contemporary interstate system is
founded on the principles of
sovereignty, territoriality and non -

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interdependence. the use of the term
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“interstate” is preferred over
“international” to emphasize that
what is being dealt with are states
instead of nations.
The Interstate System

The contemporary interstate


system can be traced back to the

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Peace of Westphalia which ended
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the Thirty Years War in Europe.
The continent before 1648
consisted of political units smaller
than the states.
The Interstate System
• These political units include
territories ruled by powerful feudal
lords who did not necessarily owe
allegiance to the monarchs.

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• At the macro level, authority resided
in the Holy Roman empire. This
made the state being not the focus
of power. At the time, in fact,
The Interstate System

there was an obscure idea of what a


state was, what it was composed of
who represented it, who it

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represented. SA
The Interstate System
The current interstate system is a
result of convergence of economic
and political factors, wealth and

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coercion. These factors enabled
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monarchs to weild powers
enough to challenge the
dominance of the Holy Roman
Empire as well as the feudal lords.
The Interstate System

With the money and army,


monarchs gained exclusive control

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over the means to wage wars.
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STATE
• A COMMUNITY OF PERSONS, MORE OR LESS
UNITED, OCCUPYING A DEFINITE PORTION
OF TERRITORY, HAVING A GOVERNMENT OF

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ITS OWN IN WHICH A GREAT NUMBER OF
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INHABITANTS RENDER OBEDIENCE AND
INDEPENDENT OF EXTERNAL CONTROL.
ELEMENTS OF STATE

1.TERRITORY- DEFINITE PORTION OF THE


EARTH WHERE THE PEOPLE LIVE.

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2.PEOPLE- MASS OF INHABITANTS WHO
LIVE WITHIN THE TERRITORY OF STATE
3. GOVERNMENT- AGENCIES/OFFICES WHICH
CARRIES OUT THE WILL OF STATE STATE,
THAT IS TO MAINTAIN ORDER AND
SECURITY IN THE STATE.

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4. SOVEREIGNTY- SUPREME POWER OF THE
STATE TO COMMAND OBEDIENCE FROM
ITS PEOPLE AND TO BE FREE FROM
OUTSIDE INTERFERENCE (INDEPENDENCE).
Four Types of Sovereignty
1. Internal Sovereignty
2. External Sovereignty

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3. Political Sovereignty
4.
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Legal Sovereignty
AS A RULE, EVERY STATE MUST RESPECT
EACH OTHER’S SOVEREIGNTY AND NOT
INTERVENE IN THE EACH DOMESTIC
AFFAIRS.
- THE TREATY OF WESTPHALIA (1648)

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RECOGNIZES THE PRINCIPLE OF
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SOVEREIGN STATEHOOD.
CONCERT OF EUROPE
From 1815 - 1914 the concert of
Europe established a set of
principles, rules and practices that

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helped to maintain balance
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between the major powers after
the Napoleonic wars, and to spare
Europe from another broad conflict.
CONCERT OF EUROPE
The concert of Europe, also known as the
Congress System or the Vienna System
after the congress of Vienna was a

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system of dispute resolution adopted by
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the major powers of Europe to avoid
future conflicts escalating into war, and to
solidify and maintain their powers in their
respective controlled regions.
CONCERT OF EUROPE

Their goal was primarily to


prevent any figure like

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Napoleon who would incite
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popular uprisings and cause
Europe instability.
THEORETICAL PERSPECTIVES

There are theories that other


competing explanations and
interpretations on the character of the

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interstate system and the nature of
interstate relations. These theories
include REALISM, LIBERALISM,
CONSTRUCTIVISM and MARXISM
THEORETICAL PERSPECTIVES
• 1.REALISM- ASSUME THAT JUST LIKE HUMAN
INDIVIDUALS, STATES ARE RATIONAL ACTORS
AND THEIR PRIMARY CONCERN IS THE

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PROMOTION OF THEIR SELF-INTERESTS.
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REALISM
IN AN ANARCHIC INTERNATIONAL
SYSTEM, WHEREIN THERE’S AN ABSENCE
OF CENTRAL AUTHORITY, STATES MUST

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FEND FOR THEMSELVES AND MUST
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AMASS POWER TO PROTECT
THEMSELVES FROM THE DEPRADATIONS
OF OTHER STATES
REALISM

To the realists, the rationality of states


and the anarchic structures of the
international system have important

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implications. Because states think in
terms of self-help, they must fend for
themselves. During the Cold War
period, the United States and
REALISM

the former Soviet Union were engaged


in a nuclear arms race. They each
amassed thousands of nuclear

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warheads. Although biopolarity helped
maintain stability vertical proliferation
was seen mutually by both parties as a
threat to their security.
REALISM

The United Nations was already in


place but it could not do so much to
keep the two superpowers from

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acquiring more nuclear weapons.
THE STATE’S POWER MAY BE BASED ON
THE FOLLOWING ELEMENTS:
1. MILITARY STRENGTH
2. STRONG ECONOMY

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3. INTERNAL STABILITY
4. FOREIGN ALLIANCES
2. LIBERALISM
- LIBERALS ASSUME STATES BEHAVE
WITH RATIONALITY AND MUST BEHAVE
PROPERLY IN RELATION WITH EACH

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OTHER
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- THEY ARE OPTIMISTIC FOR LONG-
TERM PEACE
LIBERALISM
- LIBERALS EMPHASIZE THE PACIFYING
ROLES OF INTERNATIONAL
ORGANIZATIONS, ECONOMIC
INTERDEPENDENCE, AND DEMOCRACY

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LIBERALISM
- LIBERALS MAINTAIN THAT ECONOMIC
INTERDEPENDENCE MINIMIZES
CONFLICTS. AS RATIONAL ACTORS, IT IS
NOT IN STATE’S BEST INTERESTS TO

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SACRIFICE THE GAINS OF ECONOMIC TIES
BY ENGAGING IN COSTLY CONFLICTS
LIBERALISM
- CONFLICTS AND WARS CAN ONLY
RESULT IN MUTUALLY ASSURED
ECONOMIC DESTRUCTION
- LIBERALS BELIEVE THAT DEMOCRATIC

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STATES DO NOT FIGHT OTHER
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DEMOCRACIES. THEY RESPECT EACH
OTHER
3. CONSTRUCTIVISM
- IS CONCERNED WITH THE
RELATIONSHIP BETWEEN AGENTS AND
STRUCTURES
CONSTRUCTIVISTS IDENTIFY THE
PRINCIPAL ACTORS, THEIR INTERESTS

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AND INDENTITIES, AND THE NATURE AND
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STRUCTURE OF THE INTERNATIONAL
SYSTEM
CONSTRUCTIVISM
Substantive theory - provides specific claims
and speculations about issues and patterns of
world affairs.
- how we can explain the absence of wars

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between the major powers.
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CONSTRUCTIVISM is best compared to Rational
Choice - a social theory that explains how agents
pursue their interests under specific conditions or
constraints.
CONSTRUCTIVISM
- breaks with the assumptions of two rational
choice theories, realism and liberalism.

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- constructivits do not share the view that
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states are rational actors that have fixed set of
interests, identities and preferences.

- They do not also accept that anarchy is an


inherent condition that cannot be changed.
CONTRUCTIVISM
- Constructivists argue that both state interests
and anarchy are socially constructed, that is
they are created by the states themselves.

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- Self - help and power politics are shaped
through shared understanding and interaction.
if states change the way they interact , their
identity as sel-interested agents and their
anarchic environment are likely to change too.
CONSTRUCTIVISM
- Emphasizes the role of ideas.

- the world is shaped not just by material factors

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but also by ideational forces. While
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capabalities like military power are important. It
is ideas that determine whether states should
always pursue them at all costs
CONSTRUCTIVISM
- Constructivists highlight the importance of
norms.

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Norms - are ideas that have an effect on the
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behavior of agents. Norms may be regulative,
prescriptive, or constitutive.
4. MARXISM
- ARGUE THAT THE WORLD IS DIVIDED
ALONG ECONOMIC LINES, BETWEEN
DEVELOPED AND UNDEVELOPING
STATES. RICH/DEVELOPED STATES
EXPLOIT POOR/DEVELOPING STATES

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RESULTING TO MASS POVERTY AND
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GIVING RISE TO ANTI-IMPERALIST
MOVEMENTS.
MARXISM
-IMPERIALISM MAKES THE CONFLICT
BETWEEN RICH AND POOR STATES
UNAVOIDABLE AND CONTINUOUS.

- IT IS THE AIM OF POOR STATES FROM

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FREE THEMSELVES FROM IMPERIALISM AND
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PURSUE DEVELOPMENT ON THEIR OWN
PATH.
THE ROLE OF NON-STATE ACTORS
1.INTERNATIONALORGANIZATIONS
- PROMOTE PEACE, SECURITY AND
COOPERATION (UN, EU, ASEAN, NATO)

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2. NON-GOVERNMENT ORGANIZATIONS
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- ENGAGE IN VARIOUS ADVOCACIES LIKE
ENVIRONMENT PROTECTION ,HUMAN RIGHTS
(AMNESTY INT’L, GREENPEACE)
3. MULTINATIONAL CORPORATIONS
- MONOPLY FIRMS THAT OPERATE IN
MANY COUNTRIES

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- PROMOTE INTERDEPENDENCE BY
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EXPANDING TRADE AND FOREIGN
INVESTMENT
MULTINATIONAL CORPORATIONS
(MNC’S)
- OWING TO THEIR ENORMOUS CAPITAL,
THEY HAVE THE TENDENCY TO INTERFERE
AND INFLUENCE THE INTERNAL AFFAIRS OF

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HOST COUNTRIES
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GLOBALIZATION AND THE INTERSTATE
SYSTEM
• Outside-in view - regards globalization as an
exogenous process that is making a profound
impact on state affairs.

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• Inside-out view - globalization recognizes that
states are the ones influencing the level of
global interconnectedness today.
REFERENCES
• Biersteker, T.J. (2013). “State, Sovereignty, and Territory. “In handbook
of International Relations, edited by Walter Carisnaes, Thomas Risse and
Beth A. Simmons. 245-272. Los Angeles: Sage.
• Buzon, B. (1993). “From International System to International Society;
Structural Realism and Regime Theory Meet the English School.

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“International Oganization 47 (3).327-352

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• Clark, I. (2008) “Globalization in the Post Cold war orde. “In the
Globalization of World Politics: An Introduction to International
Relations, edited by John Baylis. Steve Smith and Patricia Owens. 560-
575. Oxford University Press.
• Allan G. Quinanola and Richard B. Fernandez. Globalization in the
Contemporary World: Post Cold War Global Economy Politics and
Society. The Contemporary World.
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- IT HAS BEEN SUGGESTED THAT BECAUSE OF
GLOBALIZATION, THE WORLD IS REDUCED TO A
WHERE TIME AND SPACE

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SEEM TO BECOME INCREASINGLY IRRELEVANT.

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- THE DEVELOPMENTS IN THE CONTEMPORARY
WORLD CREATE AND IMAGERY THAT THE WORLD IS
Global Village
GLOBAL VILLAGE - the whole world considered as
being closely connected by modern
telecommunications and as being interdependent

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economically, socially and politically.

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- the world considered as a single community in which
telecommunications link the inhabitants together.
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The World is Shrinking
- THE DEVELOPMENTS IN THE CONTEMPORARY
WORLD CREATE AND IMAGERY THAT THE WORLD IS
“SHRINKING”.

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- Technology advancements bring people together
like never before, making the world smaller and
more accessible.
Globalization
- DISTANCE WAS ONCE A HINDRANCE, BUT WITH
INNOVATION IN TECHNOLOGY, COMMUNICATION
BECOMES A LOT EASIER, FASTER AND CHEAPER.

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ADVANCE TO COMMUNICATION - IN TERMS OF
IMPACT, GLOBALIZATION PRESENTS BOTH
OPPORTUNITIES AND CHALLENGES.
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-HOLDS THAT GLOBALIZATION MAY NOT BE ENTIRELY
NEW, BUT WHAT IS NEW IS HOW IT HAS
DENATIONALIZED HUMAN AFFAIRS. ( ex: Burma and

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Dominican Republic)

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-THE NATION-STATE WILL BE REPLACED BY INSTITUTIONS
OF GLOBAL GOVERNANCE THUS WEAKENING THE
POWER OF NATIONAL GOVERNMENTS .
- THE ARGUE THAT THE DRIVING
FORCES OF GLOBALIZATION DEMOCRACY, CAPITALISM
(FREE TRADE/FREE MARKET ECONOMY) AND

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INTERNATIONAL INSTITUTIONS.

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* the view that open markets and free trade and
investment across global markets allow more and
more people to share in the prosperity of a growing
world economy.
- FREE TRADE AND ECONOMIC INTEGRATION
WILL MAKE THE WORLD BORDERLESS.

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- THE SPREAD OF DEMOCRACY WILL WEAKEN
THE POWER OF THE STATE STRENGTHENING
GLOBAL INSTITUTIONS LIKE THE UN, IMF, WTO,
ASEAN, WB, APEC AND EU.
SKEPTICAL VIEW
- SKEPTICS ARGUE THAT NATIONAL GOVERNMENTS ARE
ESSENTIAL TO THE REGULATION OF INTERNATIONAL
ECONOMIC ACTIVITY AND THE CONTINUED

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LIBERALIZATION OF THE ECONOMY CAN ONLY BE MADE

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POSSIBLE BY THE POWER OF NATIONAL GOVERNMENTS.

- GLOBALIZATION IS MADE POSSIBLE THROUGH THE


ACQUIESCENCE AND SUPPORT OF NATIONAL
GOVERNMENTS (EX: ASEAN, EU AND CHINA)
- THIS ATTEMPTS TO FIND A MIDDLE GROUND BETWEEN
THE HYPERGLOBALIST AND SKEPTICAL CLAIMS.

- THE DIRECTION OF CONTEMPORARY GLOBALIZATION IS

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EITHER INTEGRATION OR FRAGMENTATION.

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- GLOBALIZATION IS A LONG-TERM CONTINUOUS
PROCESS THAT IS CHARACTERIZED BY
UNCERTAINTIES, CRISIS, AND CONTRADICTIONS
WHICH MAKES IT IMPOSSIBLE TO PREDICT.
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* GLOBALIZATION CAN BE SAID TO HAVE EXISTED
VERY LONG TIME AGO. AMARTYA SEN (2002),

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ARGUES THAT GLOBALIZATION IS AT LEAST A FEW

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THOUSAND YEARS OLD.
* IT IS IMPORTANT TO NOTE THAT THE
DEVELOPMENT AND CHANGES IN THE VARIOUS
DIMENSIONS OF GLOBALIZATION DO NOT OCCUR
SIMULTANEOUSLY AND UNIFORMLY.
PRE - WORLD WAR1 (BEFORE 1914)
CENTURIES BEFORE WORLD WAR I (1914-1918), MANY PARTS OF
THE WORLD HAD ALREADY BEEN IN CONTACT WITH EACH
OTHER

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FEATURES OF THIS PERIOD
1. EUROPEAN TRADE AND TERRITORIAL
EXPANSION (SPICE, SILK, AND SLAVE TRADE)
2. USE OF THE GOLD STANDARD AS THE
MEDIUM OF EXCHANGE (MERCANTILISM)
PRE - WORLD WAR1 (BEFORE 1914)
3. INDUSTRIAL REVOLUTION
(18TH-19TH CENTURIES)

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PERIOD OF SCIENTIFIC AND TECHNOLOGICAL

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CHANGES THAT LED TO GLOBAL TRADE
EXPANSION WITH BRITAIN, FRANCE, AND
GERMANY AS THE LEADING NATIONS
(IMPERIALISM)
Imperialism
– a policy of extending the rule or authority

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of a nation over foreign countries or

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acquiring colonies and dependencies.
PRE - WORLD WAR1 (BEFORE 1914)
4. TREATY OF WESTPHALIA (GERMANY)-
RECOGNIZED THE PRINCIPLES OF SOVEREIGNTY
(POWER OF STATES TO RULE THEMSELVES W/OUT

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INTERFERENCE FROM OTHER STATES).

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* NATION-STATES BECAME THE DOMINANT ACTORS
IN INTERNATIONAL POLITICS
PRE - WORLD WAR1 (BEFORE 1914)
THE CONCERT OF EUROPE- THE WORLD’S FIRST
INTERNATIONAL ORGANIZATION. IT WAS ORGANIZED IN
ORDER FOR EUROPEAN STATES TO PREVENT AND RESOLVE
CONFLICT. THIS MARKED AN IMPORTANT STEP IN THE

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DEVELOPMENT OF INTERNATIONAL NEGOTIATIONS AND

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DIPLOMACY.

* DURING THIS TIME COLONIALISM SHAPED POLITICAL


GLOBALIZATION AS EMPIRE STATES WERE IN SEARCH FOR
RESOURCES AND MARKETS.
THE INTERWAR PERIOD (1919 -1939)
* STATES ADOPTED A NEW INTERNATIONAL FINANCIAL
SYSTEM CALLED THE GOLD EXCHANGE STANDARD

* COUNTRIES FIXED THE VALUE OF THEIR CURRENCIES IN

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TERMS OF A FIXED AMOUNT OF ANOTHER CURRENCY THAT

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WAS CONVERTIBLE TO GOLD. IT FACILITATED
INTERNATIONAL TRADE AND WORKED WELL UNTIL WORLD
WAR II

* THE INTERWAR PERIOD SAW IMPORTANT DEVELOPMENTS


IN GLOBAL GOVERNANCE
THE INTERWAR PERIOD (1919 -1939)

* TRAUMA OF WORLD WAR II INDUCED


GOVERNMENTS TO PURSUE PEACE AT WHATEVER
COST AND THIS OVERWHELMING DESIRE OF STATES

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FOR COLLECTIVE SECURITY AND THE PREVENTION

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OF FUTURE WARS FINDS FULFILLMENT IN THE
FOUNDING OF THE LEAGUE OF NATIONS- THE
FORERUNNER OF THE UNITED NATIONS.
POST WORLD WAR II AND THE COLD WAR
(1945 - 1991)
*THE PERIOD AFTER WORLD WAR II SAW A
TREND TO INCREASING GLOBALIZATION

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*THE BRETTON WOODS CONFERENCE IN NEW
HAMPSHIRE, USA (1944) PAVED THE WAY FOR
GLOBAL INSTITUTIONS THAT WOULD GOVERN
GLOBAL FINANCE AND TRADE UP TO THE
PRESENT (GATT, IMF, WB, WTO)
POST WORLD WAR II AND THE
COLD WAR (1945 - 1991)
* THE UNITED NATIONS (UN) WAS ESTABLISHED IN 1945 TO
PICK UP WHAT THE LEAGUE OF NATIONS FAILED TO
ACHIEVE: LASTING PEACE BASED ON JUSTICE.

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* ASIDE FROM MAINTAINING PEACE AND SECURITY, THE UN
IS ALSO MANDATED TO ACHIEVE ECONOMIC AND SOCIAL
DEVELOPMENT.

* THROUGH THE UN, MEMBER STATES HAVE ADOPTED BOTH


BINDING AND NON-BINDING CONVENTIONS, TREATIES, AND
DECLARATIONS
POST WORLD WAR II AND THE COLD WAR
(1945 - 1991)
* THE STRUGGLE BETWEEN RIVAL ECONOMIC SYSTEMS
CAPITALISM AND MARXIST SOCIALISM LED TO THE COLD
WAR BETWEEN ITS MAIN PROPONENTS, THE US FOR
CAPITALISM AND THE SOVIET UNION FOR MARXIST

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SOCIALISM

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* THE COLD WAR IS A NON-CONFRONTATIONAL LOW-
INTENSITY WARFARE BETWEEN THE SUPERPOWERS
CHARACTERIZED BY INTENSE PROPAGANDA, ESPIONAGE,
ARMS RACE AND THE USE OF PROXIES AND ALLIES TO
FIGHT ONE’S WAR
POST WORLD WAR II AND THE COLD WAR
(1945 - 1991)
* THIS PERIOD SAW THE INCREASED ROLE OF INTERNATIONAL
FINANCIAL INSTITUTIONS PARTICULARLY IN POOR COUNTRIES.

* UPSURGE IN INTEREST FOR NON-TRADITIONAL SECURITY ISSUES

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LIKE ENVIRONMENTAL DEGRADATION AND CIVIL WARS

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* EXPANDING ROLES OF NON-GOVERNMENT ORGANIZATIONS IN
ADDRESSING GLOBAL PROBLEMS LIKE HUNGER, HUMAN RIGHTS
VIOLATIONS, ENVIRONMENTAL DEGRADATION AND GENDER EQUALITY
POST COLD WAR PERIOD
(1992-PRESENT)
* CHARACTERIZED BY CONTINUITY OF THE PAST IN MANY
DIMENSIONS OF GLOBALIZATION

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* EVER INCREASING DIMENSION OF TRADE AND INVESTMENT THE
WORLD HAS NEVER SEEN UNDER A FREE MARKET SYSTEM

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* iNFORMATION TECHNOLOGY EXPLOSION THROUGH THE INTERNET

* SECURITY PROBLEMS LIKE TERRORISM AND DRUGS


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What is Global Divide?

• It Is A Disparities In Income And


Living Conditions Between The

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Advance Industrialized States

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And Developing States.
Gross

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Domestic

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Product
What is Gross Domestic Product (GDP)

• This measure of income


is used to measure of

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how countries are
improving or
deteriorating based on
the development aspect.
10 COUNTRIES WITH HIGHEST GDP (NOMINAL)

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UNITED STATES

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CHINA
JAPAN
© INTERNATIONAL MONETARY FUND WORLD ECONOMIC OUTLOOK (APRIL-2018)
10 COUNTRIES WITHWITH
10 COUNTRIES HIGHEST GDP GDP
HIGHEST (PPP)(PPP)

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CHINA

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UNITED STATES
INDIA
© INTERNATIONAL MONETARY FUND WORLD ECONOMIC OUTLOOK (APRIL-2018)
Income Inequality

• A MEASURE OF HOW THE


WEALTH IN THE ECONOMY IS

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DISTRIBUTED AMONG THE

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POPULATION.
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PO V E R T Y
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Poverty Is A State Or Condition In Which A Person Or Community Lacks The Financial Resources
And Essentials For A Minimum Standard Of Living.
ABSOLUTE POVERTY MODERATE POVERTY
• Refers To Income Below The Minimum • Basic Needs Are Barely Met But
Level Required For Physical Survival. Survival Is Not Actually Threatened.

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• A Condition Characterized By Severe • People In Moderate Poverty Generally
Deprivation Of Basic Human Needs, Have Access To The Basic Necessities

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Including Food, Safe Drinking Water, Of Life, But They Do Not Have Much If
Sanitation Facilities, Health, Shelter, Any Disposable Income Beyond That.
Education And Information.
• In Moderate Poverty As Less Than $2
• In 2018, Extreme Poverty Widely Or $5 A Day
Refers To Making Below The
International Poverty Line Of
$1.90/Day
D R CONGO
MOZAMBIQUE

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UGANDA

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TAJIKISTAN
YEMEN
HUMAN DEVELOPMENT INDEX
• The HDI was created to emphasize that people and
their capabilities should be the ultimate criteria for
assessing the development of a country, not economic
growth alone.

• The HDI can also be used to question national policy

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choices, asking how two countries with the same level

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of GNI per capita can end up with different human
development outcomes.

• The Human Development Index (HDI) is a summary


measure of average achievement in key dimensions of
human development: a long and healthy life, being
knowledgeable and have a decent standard of living.
HUMAN DEVELOPMENT INDEX

LIFE EXPECTANCY

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INCOME SA EDUCATION
COMPETING PERSPECTIVES ON

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GLOBAL DIVIDE
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MODERNIZATION THEORY

• Proponents Of this Theory Argue That Society Undergoes


Stages Of Growth And Move From Being A Traditional
Society To A Modern One.

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• Poverty Is The Primordial Condition Of Humanity.

• All Societies Were Once Poor; But To Overcome It, Societies


Must Advance From Traditionalism To Modernization.
DEPENDENCY THEORY

• It Argues That The Root Cause Of Poverty And


Underdevelopment Is Imperialism As Well As The
Dependency Of Poor Nation On Rich Nations.

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• It Is A Counter argument To Modernization Theory, Which
Prescribes That Developing Countries Must Follow The Path
Of The Developed Nations.
STAGE 5: HIGH MASS CONSUMPTION

STAGE 4: DRIVE TO MATURITY

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STAGE 3: TAKE-OFF

STAGE 2: TRANSITIONAL SOCIETY

STAGE 1: TRADITIONAL SOCIETY

TIME
“ENDO”
• It is a form of contractualization which involves
companies giving workers temporary employment
that last them less than six months and then
terminating their employment just short of being

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regularized in order to skirt on the fees which
come with regularization. some examples of such

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benefits contractual workers don't get as compared
to regularized workers are the benefits of having
an employer and employee SSS, PHILHEALTH, and
the PAG-IBIG housing fund contribution, unpaid
leaves, and the 13th month pay, among others.
NEO-LIBERAL THEORY

• The Intellectual Basis For Neo-liberal Theory Comes From Neo-classical Economics,
Which Combines Arguments Supportive Of Free Market With Scientifically Inclined
School Of Economics.

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• On The International Level, The IMF And The World Bank Champion Their Own

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Form Of Neo-classical Economics Through The Ideals Of Structural Adjustments.

• It Calls Nations To Reduce Government Spending And Bureaucracy To Encourage


Free Markets, To Export, And To Encourage Entrepreneurship, As Well As To Entice
Foreign Investment And Foreign Technology.

• For Economists, The Culprits Are Paternalistic Politics That Favour Cronyism,
Corruption, And Bloated Bureaucracies.
WORLD SYSTEM THEORY

• The argument of dependency thinkers that the cause of


underdevelopment and poverty is external intervention
continues in world system theory, developed by Immanuel
Wallerstein.

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CORE CENTER POWERS
SEMI-PERIPHERAL COUNTRIES

PERIPHERY
GLOBAL NORTH & GLOBAL SOUTH

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GLOBAL ECONOMY

• Economic globalization is a prominent


feature of the contemporary world.

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• It involves integration of economies
around the world, particularly
through free trade and financial
flows.
GLOBAL ECONOMY

Economic interconnectedness may


not be entirely new, but the

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framework of the global economy

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can be said to have its roots in the
planning for post-war economic
order just before the end of World
War II.
GLOBAL ECONOMY

The institutions that were established


have since been instrumental in the

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integration of markets. While these

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institutions indeed facilitated opening
of markets, the process has not
always been smooth.
GLOBAL ECONOMY

The global economy was successfully


revived after World war II, but it

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experienced a downturn in the 1970’s.

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It affected both the major economies
and developing nations. Later on the
global economy gained momentum
with the end of Cold war.
GLOBAL ECONOMY

Economic globalization focuses on


the developments since

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BRETTON WOODS CONFERENCE.
WHAT IS BRETTON WOODS CONFERENCE?

Formally known as the United Nations


Monetary and Financial Conference,

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was the gathering of 730 delegates

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from all 44 allied nations at the Mount
Washington, Hotel situated in Bretton
Woods, New Hampshire, United States,
July 1-22, 1944.
WHAT IS BRETTON WOODS CONFERENCE?

During world war II to make


financial arrangements for the

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postwar world after the expected
defeat of Germany and Japan.
WHAT IS BRETTON WOODS CONFERENCE?

• The conference was attended by


experts noncommitally representing

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44 states or governments including

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the Soviet Union. It drew up a project
for the International Bank for
Reconstruction and Development
(IBRD) to make long – term capital
WHAT IS BRETTON WOODS CONFERENCE?

Available to states urgently


needing such foreign aid and a

E
project for the International

SA
Monetary Fund (IMF) to finance
short term imbalances in
international payments in order
to estabilize exchange rates.
WHAT IS BRETTON WOODS CONFERENCE?

•Although the conference


recognized that exchange control

E
and discriminatory tariffs would

SA
probably be necessary for some
time after the war, it prescribed
that such measures should be
ended as soon as possible.
WHAT IS BRETTON WOODS CONFERENCE?

After governmental ratifications


the IBRD was constituted late in

E
SA
1945 and the IMF in 1946, to
become operative, respectively, in
the two following years.
PLANNING FOR THE POST –WAR GLOBAL
ECONOMY

• During the last phase at the Second


World War delegates from different

E
states assembled in the United States

SA
for the Bretton Woods Conference.
PLANNING FOR THE POST –WAR GLOBAL
ECONOMY

•The objective was to set up a stable


a. Monetary System

E
b. Trade System – that will help

SA
prevent another great depression,
promote world trade and support
postwar economic rehabilitation
institutions.
PLANNING FOR THE POST –WAR GLOBAL
ECONOMY

The negotiations led to the creation of three


multilateral institutions.

E
SA
First, the International Monetary Fund (IMF)
was established to supervise the fixed
exchange rate system and help countries with
their balance of payment problems.
PLANNING FOR THE POST –WAR GLOBAL
ECONOMY

• Second, the International Bank for


Reconstruction and Development

E
(IBRD, or the World Bank).

SA
• Was created to assist in the recovery
efforts and promotion of investments.
PLANNING FOR THE POST –WAR GLOBAL
ECONOMY

•Third, the General Agreement on


Tariffs and Trade (GATT), which

E
served initially as an interim

SA
agreement until a trade
organization would be put in
place, became a forum for trade
negotiations among states.
PLANNING FOR THE POST –WAR GLOBAL
ECONOMY

•CONTAINMENT – means that the


US with its allies sought to

E
SA
encircle and isolate the
adherents of communism from
international affairs.
PLANNING FOR THE POST –WAR GLOBAL
ECONOMY

MARSHALL PLAN – extended huge


financial assistance to Europe,

E
SA
and supported the Bretton
Woods system.
The Primary Dilemma Facing States before
the Bretton Wood System was between

-the desire for domestic autonomy


in economic policies.

E
SA
-the desire stability of the
international monetary system
National Intervention in Monetary Issues
Undermined the Stability of the System

- Beggar-thy-neighbor policies

E
SA
or engaging in

- Competitive currency devaluations


Two primary goals the dilemma
between the domestic autonomy

E
SA
and international stability that the
Bretton Woods system sought to
address.
•First, a system in which governments
would have a considerable leeway to

E
pursue economic objective.

SA
•Second, a monetary order that would
be based on fixed exchange rate to
prevent currency manipulation.
How did the Bretton Woods System Work?

• There are requirements for a stable


international monetary system.

E
First, a system should provide liquidity to

SA
finance international transactions
LIQUIDITY – refers to the amount of assets
such as, money that can be available to
finance trade.
How did the Bretton Woods System Work?

• Second, it should specify adjustment


mechanisms or the methods to resolve

E
balance of payments between balance of

SA
payment disequilibria.

• Balance of payment – refers to a payment


between a country and its trading partners.
How did the Bretton Woods System Work?

•Third, the system should provide


CONFIDENCE among states.

E
SA
How did the Bretton Woods System Work?

• If a state is suffering temporary balance of payment


disequilibria the IMF would provide a loan to that

E
state.

SA
• But if a state is suffering fundamental balance of
payment problems, the system would permit that
state to change its exchange rate. It refers to the
system as “EMBEDDED LIBERALISM”.(John Gerard
Ruggie).
US AND GLOBAL ECONOMY IN DECLINE

• Starting the 1960's the US economy


slowed down, the foreign and

E
domestic policies pursued by the US

SA
administration had taken their toll on
the economy.
US AND GLOBAL ECONOMY IN DECLINE

• The escalating war in Vietnam


• The heavy government spending on

E
SA
public education
• Urban development had weakened US
fiscal position.
US AND GLOBAL ECONOMY IN DECLINE

• As INFLATION - hit the economy that


competitiveness of US goods and

E
services in the global economy

SA
declined. the confidence of US dollar
had likewise fallen.
What is Inflation?

• Inflation - is a quantitative measure of


the rate at which the average price

E
level of a basket of selected goods

SA
and services in an economy increases
over a period of time.
What is Inflation?

• it indicates a decrease in the


purchasing power of a nation

E
currency.

SA
• increase in prices accross in many
goods and services in an economy
over a sustained period of time.
• around this time other states were
fast catching up. In Europe member -

E
states of the European Economic

SA
Community (EEC) had greatly
benefited from the intensification of
regional economic integration.
• this resulted in the less reliance on the US
not only on the aspect of economic but

E
also of security. In Asia the success of

SA
developmental states in Japan, South
Korea and Taiwan in promoting export -
oriented industrialization posed a serious
challenge for US trade position.
. In the 1970's the global economy also
slowed down.

E
. The primary cause was the Oil Crisis in

SA
1973.
. When the Arab member states of the
organization of the Petroleum Exporting
Countries (OPEC) imposed an embargo after
US and its allies decided to supply arms to
to Israel during the Yom kippur war.
* The oil crisis plunge the world

E
SA
economy into stagflation, a
phenomenon in which lack of economic
growth as accompanied by high prices.
* In monetary system, this series of
events led the US to announce in 1971

E
that it will suspend the convertibility

SA
of dollar into gold .
* The Bretton Woods system broke
down and the role of the IMF
collapsed.
Era of Structural Adjustment Program

• In the 1960's and 1970's, the US and


European policies facilitated growth in

E
direct foreign investments and global

SA
capital markets. Financial flow found
their way to government in developing
countries that were offered loans. The
Philippines was among these countries
of destinations.
Era of Structural Adjustment Program

• However, in 1979, the US Federal


Reserve raised the interest rates, its

E
purpose was to reduce inflation by

SA
contracting economic activity in the
US. The effect of the contractionary
policy was felt by the rest in the
global economy.
Era of Structural Adjustment Program

• The rise of US interest rates was a


wake-up call to both borrowers and

E
creditors many of whom were US-

SA
based banks who suddenly realized
that many of the loans could not be
repaid.
Era of Structural Adjustment Program

• The IMF was called in to prevent the


governments in developing countries

E
from defaulting on their loans. There

SA
was apprehension that it would cause
a global financial crisis. Some critics
in the Philippines argued that the
country
Era of Structural Adjustment Program

• could have issued a a moratorium on


its debt servicing, to address more

E
pressing issues of poverty and income

SA
redistribution, which it was
constrained to do because of the
tough conditions imposed by the IMF.
Era of Structural Adjustment Program

• The IMF ensured that indebted


countries undertook structural

E
adjustment measures.

SA
These measures include
• Reducing government spending
• Tax Reform
Era of Structural Adjustment Program

• Trade Liberalization
• Liberalization of inflows of foreign

E
SA
direct investment
• Privatization and deregulation.
Era of Structural Adjustment Program

• These neo - liberal policies, later to


be labelled collectively as the

E
WASHINGTON CONSENSUS, aimed to

SA
minimize the role of the state in the
economy.
The Philippines and the 1980's Debt Crisis

• As part of undertaking the structural


adjustment programs, during the debt

E
crisis, the Philippines shifted towards

SA
all-out trade, investment and finance
liberalization policies together with
cuts on public spending and
privatization / deregulation of public
The Philippines and the 1980's Debt Crisis

• services to arrest negative balance of


payments. It also started unilateral

E
tariff reduction programs together

SA
with lifting of import restrictions on
key products as well as reduction or
withdrawal of domestic support for
agriculture
END OF COLD WAR

• Aid Conditionality - to promote good


governance among members.

E
SA
• East Asian Crisis (1997) - started in
Thailand and spread across East Asia,
showed that IMF might have gone too
far in imposing conditionality.
END OF COLD WAR

• 2008 Global Recession and recently


the Eurozone Crisis - The measures

E
required among European countries

SA
where the Eurozone crisis erupted
include cutbacks on government
spending and raising of taxes.
MULTINATIONAL CORPORATIONS

• Multinational Corporations (MNC's) is


a striking feature of contemporary

E
economic globalization. Individuals

SA
consume goods and services produced
by MNC's.
MULTINATIONAL CORPORATIONS

• MNC'S - Are organizations that own or


control overseas companies or production

E
or service facilities in one or more

SA
countries other than the home country.
Other refer to them as Transnational
Corporations (TNC's) which connotes
operations in more than one country.
MULTINATIONAL CORPORATIONS

• Their proliferation can be attributed


largely to the liberalization of trade

E
and investments. According to Kenichi

SA
Ohmae (1990), they are “a natural
response to a borderless world
economy.”
MULTINATIONAL CORPORATIONS

• Economies of Scale - a situation where


firms incur falling average cash with

E
increase in the volume of production.

SA
With open markets, firms can produce
and sell goods or services in multiple
locations.
MULTINATIONAL CORPORATIONS

• Foreign Direct Investment (FDI) - the


entry into a business enterprise in

E
one country by an entry based in

SA
another country, or through Portfolio
Investment, which is a passive
investment on securities (as stocks
and bonds) in a host country.
Reasons for Foreign Corporate Investments

•Market - seeking

E
•Resource - seeking

SA
•Strategic asset - seeking
•Efficiency - seeking
Perspectives on Economic Globalization

• Hegemonic Theory - argues that the


preponderance of power and the

E
willingness of the US to act as a

SA
hegemon made possible the
establishment of a liberal global
economy (Gilpin and Gilpin 2001)
Reasons for Foreign Corporate Investments

• Neo - Liberal Institutionalist Theory -


explains that international institutions

E
such as, the IMF, World Bank, and the

SA
GATT, have an independent impact on
the global economy.
What is Global Governance?
Is a movement towards political
cooperation among transnational
actors, aimed at negotiating
responses to problems that affect
more than one state or region.
What is Global Governance?
• It refers to the rule making efforts to sustain
cooperation in order to address global
problems or concerns.
• As a subject field entrails an interdisciplinary
examination of power and authority in the
global arena and examines the variety of
actors, institutions, ideas, rules, and
processes that contribute to the
management of global society
What is Global Governance?
• Exploring their origins their evolving roles, as
well as their political, economic, social,
environmental, and ethical consequences.
• In addition to considering international
organizations and inter-state interactions,
global governance gives critical focus to
various non- state actors, formal and
informal networks and broader
transnational, supranational, and subnational
realities of contemporary that
What is Global Governance?

increasingly contribute to the


establishment and functioning of
global rules, norms and institutions.
Global Governance
Virtually every important aspect of the
contemporary world is being managed by
certain governmental institutions. The
demand for global governance increases
as states, communities, and individuals
are being exposed to issues and
challenges they alone cannot address.
At the turn of the 20th century, the
ascendancy of the state as the primary
factor in world affairs is increasingly
challenged by the presence of non-state
actors like Intergovernmental
Organizations (IGO’s) and Non-
governmental Organizations (NGO’s).
Intergovernmental Organizations

. Are made up of states established for


single and multiple objectives
. They were powers in making crucial
decisions and coordinating actions in
important policy areas like peace and
security, trade, finance and development
through global collective action.
Intergovernmental organizations, such as
the United Nations, play important roles
in global governance. They develop habits
of global cooperation among states
through regular interactions. Along with
states, IGO’s spearhead the creation and
maintenance of principles, norms and
rules based on collective concerns.
Non-governmantal Organizations

They are generally private, voluntary


organizations whose members are either
individuals or groups gathered for a
common purpose. They act as advocates
for specific policies and offer alternative
forum for political participation. They
mobilize the public in the promotion of
advocacies like health, education, etc.
PERSPECTIVES ON GLOBAL
GOVERNANCE
• Neo-liberal institutionalists see institutions as
the mediators and means to achieve
cooperation among actors in the system.
regimes increase transparency of states. They
provide confidence building measures to avoid
misperceptions of states' individual intention.
they reduce Transaction costs- the costs of
making and enforcing agreements.
PERSPECTIVES ON GLOBAL
GOVERNANCE
• Shadow of Future - which means that they
provide states idea of Sunk Costs for deviating
from them commitments and compliance.
Lastly, they provide enforcement mechanisms
and norms of reciprocity.
PERSPECTIVES ON GLOBAL
GOVERNANCE
• From a liberalist standpoint, what would
largely explain the relative peace after World
War II up to the contemporary time is regime
governance.
• Collective goods, such as a liberal trade and
financial system, through mechanisms that
dissuade free-riding and raise or internalize
the costs of defection.
The United Nations

. Founded in 1945, the UN was the result


of initiatives taken by governments of the
states that had led the war against
Germany and Japan
. By 2018, there are 193 sovereign state-
members of the UN
. When joining ,member states agreed to
accept the obligations of the UN Charter, an
international treaty that set out the basic
principles of international relations: sovereign
equality of states.
. Only international problems are within UN
jurisdiction, mostly related to peace and
security.
. The UN is the only organization with the
legitimacy that derives from universal
membership, and a mandate that
encompasses security, economic and
social development, the protection of
human rights, and the protection of the
environment,
The Security Council

. This body was given the main


responsibility for maintaining
international peace and security
.Its decisions are binding, and must only
be passed by a majority of 9 out of 15
members.
. When the security council considers a
threat to international peace, it explores
ways to settle the dispute peacefully.
. It may suggest principles for a settlement
or may suggest a mediation.
. In the event of fighting, it tries to secure a
ceasefire.
General Assembly

. All member states are represented in the


General Assembly which meets to
consider the world’s most pressing
problems.
. Its decisions only have the status of
recommendations, rather than binding
decisions.
. Its recommendations are important
indications of global opinion regarding
various issues, affecting not just states but
communities as well as individulas.
Secretariat
. It carries out the substantive and
administrative work of the United
Nations.
. It is led by the secretary-general, who
provides over-all administrative guidance.
. It is empowered to become involved in a
large range of areas involving peace,
including economic, social and
humanitarian problems
Economic and Social Council

. It is intended to coordinate the economic


and social work of the UN.
. It consults with NGO’s, thereby
maintaining a vital link between the UN
and civil society.
POSTWAR ECONOMIC INSTITUTIONS

YEAR
INSTITUTIONS HEADQUARTERS FUNCTIONS
ESTABLISHED
Foster global monetary
cooperation; secure financial
stability; facilitate
International
international trade; promote
Monetary 1994 Washington, D.C
high employment and
Fund (IMF)
sustainable economic
growth; reduce poverty
around the world.
Provide financial and
technical assistance to
World Bank 1944 Washington, D.C
developing countries around
the world.
General Promote international trade
Agreement on by reducing or eliminating
1948 Geneva
Tariffs and trade barriers such as tariffs
Trade (GATT) or qoutas

World Trade Liberalize trade; settle trade


1995 Geneva
Organization disputes.
(WTO)
The Global North-South Divide

What is the North-South Divide?


By Benjamin Elisha Sawe

Global Divide

-The concept of a gap between the Global North and the Global South
in terms of development and wealth (Royal Geographical Society).

The North-South Divide, also known as the Rich-Poor Divide, is an


imaginary line separating more economically developed and less economically
developed countries.

The “global divide” is caused by political power, economic dependency,


and importation/exportation of resources. The transition of industrial
production to cheaper labor sources, international media, and expanding
international trade and communication have in some ways made the world
smaller, yet in other ways made the gaps between nations larger by creating
greater dependency of poor nations to wealthy nations.

The North-South Divide is a socio-economic and political categorization of


countries. The Cold-War-era generalization places countries in two distinct
groups; The North and the South. The North is comprised of all First World
countries and most Second World countries while the South is comprised of
Third World countries.
This categorization ignores the geographic position of countries with some
countries in the southern hemisphere such as Australia and New Zealand
being labeled as part of the North. North-South divide can be seen in:

*Economy

*Poverty

*Development

*Life expectancy

*Literacy

History

The origin of dividing countries into the North-South Divide arose


during the Cold War of the mid 20th century. During this time, countries were
primarily categorized according to their alignment between the Russian East
and the American West. Countries in the East like the Soviet Union and China
which became classified as Second World countries. In the west, the United
States and its allies were labeled as First World countries. This division left
out many countries which were poorer than the First World and Second World
countries. The poor countries were eventually labeled as Third World
countries. This categorization was later abandoned after the Second World
countries joined the First World countries. New criteria was established to
categorize countries which was named the North-South Divide where First
World countries were known as the North while Third World countries
comprised the South.

The North (First World


Countries)

The North of the Divide is comprised of countries which have


developed economies and account for over 90% of all manufacturing
industries in the world. Although these countries account for only one-quarter
of the total global population, they control 80% of the total income earned
around the world. All the members of the G8 come from the North as well as
four permanent members of the UN Security Council. About 95% of the
population in countries in The North have enough basic needs and have
access to functioning education systems. Countries comprising the North
include The United States, Canada, all countries in Western Europe, Australia,
New Zealand as well as the developed countries in Asia such as Japan and
South Korea.
There any several factors which allowed the countries in the North to
gain a better standard of living then the South. The North has always seemed
to have an advantage over the South, and the biggest advantage that allowed
the North colonize the South is the technological advancement in weaponry.
Another factor is the gap in the advancement of medicine.

*Economy was based on industries and major businesses, commerce


and finance.

*North had many manufacturing factories that dealt with textiles,


lumber, clothing, machinery, leather, and wooden goods.

*The biggest business of the north was in railroad construction.

*Transportation was easier because of railroads.

*North America, Western Europe, Australia, Japan.

*Known as First Class

*Home to four to five permanent members of the United Nations


Security Council

*Richer and developed region

*95% has enough food and shelter and functioning education system
as well.

The South (Third World


Countries)

The South is comprised of countries with developing economies which


were initially referred to as Third World countries during the Cold War. An
important characteristic of countries in the South is the relatively low GDP and
the high population. The Third World accounts for only a fifth of the globally
earned income but accounts for over three-quarters of the global population.
Another common characteristic of the countries in the South is the lack of
basic amenities. As little as 5% of the population is able to access basic needs
such as food and shelter. The economies of most countries in the South rely
on imports from the North and have low technological penetration. The
countries making up the South are mainly drawn from Africa, South America,
and Asia with all African and South American countries being from the South.
The only Asian countries not from the South are Japan and South Korea.

Global South can be described as the following:

*Economy was based on cotton production which depended on slave


labor
*Southern economy was weak and vulnerable because it depended
entirely on cotton but was still very profitable

*Africa, Latin America and Asia

*Poor and less developed region


*5% of the population has enough food and shelter
*It serves a source for a raw material for the north

Criticism

The North-South Divide is criticized for being a way of segregating


people along economic lines and is seen as a factor of the widening gap
between developed and developing economies. However, several measures
have been put in place to contract the North-South Divide including the
lobbying for international free trade and globalization. The United Nations has
been in the forefront in diminishing the North-South Divide through policies
highlighted in its Millennium Development Goals. (Sawe, 2017)

Challenges

The accuracy of the North–South divide has been challenged on a


number of grounds. Firstly, differences in the political, economic and
demographic make-up of countries tend to complicate the idea of a monolithic
South. Globalization has also challenged the notion of two distinct economic
spheres. Following the liberalization of post-Mao China initiated in 1978,
growing regional cooperation between the national economies of Asia has led
to the growing decentralization of the North as the main economic power.
The economic status of the South has also been fractured. As of 2015, all but
roughly the bottom 60 nations of the Global South were thought to be gaining
on the North in terms of income, diversification, and participation in the world
market. Globalization has largely displaced the North–South divide as the
theoretical underpinning of the development efforts of international
institutions such as the IMF, World Bank, WTO, and various United Nations
affiliated agencies, though these groups differ in their perceptions of the
relationship between globalization and inequality. Yet some remain critical of
the accuracy of globalization as a model of the world economy, emphasizing
the enduring centrality of nation-states in world politics and the prominence
of regional trade relations.
THEORIES OF INTERSTATE RELATIONS

COMPELLING
REALISM LIBERALISM CONSTRUCTIVIM MARXISM
THEORIES
Capitalist
Democracy, free Norms and ideas
motives cause
trade and can re-constitute
States always conflict between
Central international state behavior,
compete for core, semi-
Argument organizations interests,
power peripheral and
matter to state identities and
pheripheral
behavior. preferences
states
States are State are rational Institutions,
rational actors; actors; including
History is a class
Assumptions international international anarchy, are
struggle
system is system is socially
anarchic anarchic constructed
Focus of
states states individuals World system
analysis
Emmanuel
Kenneth Waltz,
Robert Keohane, Alexander Wendt, Wallerstein,
Theorists John
Joseph Nye Jr. Nicholas Onuf Theotonia dos
Mearsheimer
Santos

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