Development and Social Change A Global

Perspective 6th Edition McMichale

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Development and Social Change, 6th edition

Philip McMichael

Chapter 5 - Instituting the Globalization Project

Test Bank

1. The globalization project succeeded the development project because:

*a. development has transitioned from a nationally managed economic growth to participation in world
market
b. development is extinct
c. development became globalization
d. development project became globalized in all nations
Answer Location: Globalization Project
Page Number: 110

2. Globalization is a project because

a. it is a project with specific goals
*b. it has political dimensions and involves international players
c. it entrenches nation states in the global world
d. globalization is manipulated by political forces
Answer Location: Globalization Project
Page Number: 110

3. The globalization project is different from the development project because

a. the development project emerged first
b. the globalization project is about national sovereignty
*c. the globalization project, with its focus on free international enterprise super seeds governments
d. the globalization project erases national boundaries
Answer Location: Globalization Project
Page Number: 110

4. President Sukarno of Indonesia was overthrown in 1965 because:

a. he was idealistic
b. he opposed the communism
*c. he believed in economic nationalism
d. he did not believe in economic nationalism
Answer Location: Securing the Global Market
Page Number: 111

5. The planned involvement of the US and Britain in the overthrow of President Sukarno confirms this tenet
of the modernization theory, namely development could be spurred by ______
a. environmental changes
b. religious conflict
c. south-south cooperation
*d. military intervention
Answer Location: Securing the Global Market
Page Number: 111

6. CHOOSE ALL THAT APPLY: Which of the following were present at the 1967 meeting sponsored by Time-
Life Inc between General Suharto, his economic advisors and corporate entities?
*a. General Motors
*b. British Leyland
c. American Express
d. British Petroleum
Answer Location: Securing the Global Market
Page Number: 111

7. The role of General Suharto in the overthrow of Indonesian President Sukarno confirms the fact that
*a. development interventions requires participation of Third World elites
b. development is externally imposed
c. development is globalization
d. development is stimulated by religion.
Answer Location: Securing the Global Market
Page Number: 111

8. US interventions in Vietnam, Nicaragua, Panama, Grenada and Iraq are all examples of US's
a. foreign-domestic alliances
*b. containment policy
c. global development partnership
d. militarization containment policy
Answer Location: Securing the Global Market
Page Number: 112

9. Despite its promises, the New International Economic Order was not helpful to Third World countries
because
a. it was drafted without consultation of the third World countries
b. it represented a modernist view of development
*c. it promoted a dependency perspective of development
d. it promoted conflict between Third World states
Answer Location: Securing the Global Market
Page Number: 112

10. The key event that precipitated the debt crises was:
a. The Panama Crisis
b. The establishment of the World Bank and IMF
c. failure of export diversification policies
*d. contraction of credit and increased interest rates following US anti-inflation policy
Answer Location: Debt Regime
Page Number: 113

11. CHOOSE ALL THAT APPLY. The debt crisis in the Third World resulted from:
*a. US government's anti-inflationary policies in the 1980
*b. Contraction of credit and rising interest rates
*c. inflationary pressures from rise in oil prices
d. US Federal Reserve Board policy
Answer Location: Debt Regime
Page Number: 113

12. By the early 1980s, Third World countries were mired in a debt trap. Precisely, this means:
a. they can avoid debt in the short term
b. they can never avoid debt from US
c. debt relief involves more borrowing from the UN
*d. debt servicing requires more borrowing and debt.
Answer Location: Debt Regime
Page Number: 113

13. CHOOSE ALL THAT APPLY: Which of the following preconditions must be met for a country to receive
financial assistance from the IMF and/or World Bank?
*a.Export-orientated markets
*b.Privatization
c. Stable interest rates
*d.Currency devaluation
Answer Location: Debt Management
Page Number: 114

14. As a result of preconditions set by the World Bank and/or IMF, in what way(s) must governments of
developing nations act?
*a. Spend less and reduce consumption
b. Spend more and reduce consumption
c. Spend less and increase consumption
d. Spend more and increase consumption
Answer Location: Debt Management
Page Number: 114

15. According to the IMF and the World bank, the main objective of the Structural Adjustment Programs is
_________.
a. To reduce developing nations spending on health care and education
*b. To ensure debt repayment and economic restructuring
c. To create poverty
d. To promote the presence of multinational corporations in these countries
Answer Location: Debt Management
Page Number: 114

16. Which of the following is NOT an effect of structural adjustment programs?

a. Lower standard of living for poor nations.
b. Increased exporting of raw materials.
*c. Increased value of labor.
d. Decreased consumption in poor countries.
Answer Location: Reversing the development project
Page Number: 115

17. What has the IMF “prescribed” for the last two decades as “medicine” to third world issues?
a.monetary austerity, privatization, financial fiscal austerity
b.free trade, fiscal austerity, monetary austerity, EPZs
c.privatization, structural adjustment policies, EPZs, decrease commodity prices
*d.structural adjustment policies, including trade and financial liberalization
Answer Location: Reversing the development project
Page Number: 116

18. The IMF has a unique understanding of Third World debt. It defined debt
*a. as an individual liquidity problem caused by shortage of foreign currency
b. as a systemic problem stemming from global inequalities
c. as inability to generate profit from industrialization
d. as a problem caused by the World Bank
Answer Location: Debt Management
Page Number: 114-115

19. One implication of the IMF's definition of debt as an individual liquidity problem instead of a structural
or system problem is:
a. it justifies the globalization problem
*b. it ignores the role of global inequalities in entrenching the debt crises.
c. it ignores the role of Third World princes in the debt crises
d. it ignores the contribution of military coups to the debt crises.
Answer Location: Debt Management
Page Number: 114-115

20. According to Jeffrey Sach's IMFs SAP was like the trusteeship of the British Empire because
a. the IMF trusted the local governments with SAP implementation
b. the IMF used staff of the British Empire
*c. the IMF placed staff in its loan recipient countries in order to monitor SAP implementation
d. the IMF restricted the operation of recipient countries.
Answer Location: Challenging the Development State
Page Number: 122

21. The implementation of Western and IMF-inspired austerity measures in the Soviet Union led to:
a. increases in interest rates
b. proliferation of capitalism
c. bipolarity of the cold war era
*d. decline in standard of living and explosion of organized crime
Answer Location: Globalization Project
Page Number: 123

22. CHOOSE ALL THAT APPLY: Economic nationalism was seen as limiting development because
*a. it obstructed the transnational mobility of goods, money firms
*b. prevented the allocation of global resources
c. focused too much on the relationship between the Third World and the West
d. driven largely by consequences of colonialism
Answer Location: Globalization Project
Page Number: 124

23. The statement, "nationalism is economically indefensible" ushered in the globalization project because
a. it recognized the success of national markets, following the failure of world markets
b. it recognizes the success of transatlantic markets
*c. it supports the notion that world markets are the driving forces in globalization, instead of national
markets
d. it recognizes the short-sightedness of perestroika
Answer Location: Globalization Project
Page Number: 124

24. The vision of the globalization project was

a. establishment of the World Trade Organization
b. implementation of World Trade Organizations rules
c. implementation of classical economic plans
*d. implementation of free markets via restructuring of nation-state economic policies
Answer Location: Globalization Project
Page Number: 124

25. The phrase "Washington Consensus" signified a new way of thinking about globalization project as
*a. based on trade and not aid
b. Washington DC-based philosophy
c. agreement among political elites of the contours of global trade
d. not synonymous with Bretton Woods policies
Answer Location: Globalization Project
Page Number: 124

26. The US engineered the creation of the General Agreement on Trade and Tariffs (GATT) as an alternative
to the International Trade Organization (ITO) because
a. GATT allowed trade expansion
*b. Under the GATT, trade expansion ignored social contracts
c. trade expansion was paid for by US funds
d. trade expansion was part of globalization
Answer Location: Making of Free Trade Regime
Page Number: 133

27. The creation of the World Trade Organization (WTO) was to enforce the provisions of the ____.
a. IMF
b. TNC
*c. GATT
d. MNC
Answer Location: The World Trade Organization
Page Number: 134

28. The WTO protocol governing manufacture of or access to patented medications in the Third World is:
a. Trade-Related Investment Measures (TRIMs)
b. Trade-Related Medication Programs (TRMPs)
c. Trade-Related Intellectual Rights (TRIRs)
*d. Trade-Related Intellectual Property Rights (TRIPs)
Answer Location: The World Trade Organization
Page Number: 135-136

29. JINCO is an multinational company wishing to invest in India. The Indian government is interested in the
partnership but requires JINCO to invest its profits locally, hire locally, and buy its raw materials from the
country. JINCO disagrees and decides to seek relief from the WTO. Which of these WTO protocols would
JINCO use?
*a. Trade-Related Investment Measures (TRIMs)
b. Trade-Related Medication Programs (TRMPs)
c. Trade-Related Intellectual Rights (TRIRs)
d. Trade-Related Intellectual Property Rights (TRIPs)
Answer Location: The World Trade Organization
Page Number: 135-136

30. The main difference between GATS 1994 and GATS 2000 is that:
a. GATS 1994 compels governments to provide unlimited market access to foreign service providers
*b. GATS 2000 compels governments to provide unlimited market access to foreign service providers
c. GATS 2000 restricts governments rights over access to foreign service providers
d. GATS1994 compels governments to broaden environmental and environmental protections to its citizens
Answer Location: General Agreement on Trade in Services
Page Number: 142

31. Globalization project and development project are synonymous.

a. True
*b. False
Answer Location: Globalization Project
Page Number: 110

32. The involvement of the US and Britain in the overthrow of General Sukarno illustrates important tenets
of modernization theory
*a. True
b. False
Answer Location: Globalization Project
Page Number: 110

33. The 'global development partnership was developed by US President Eisenhower in 1959.
a. True
*b. False
Answer Location: Securing the Global Empire
Page Number: 111.

34. The prime movers of the NIEO were all oil producing nations.
*a. True
b. False
Answer Location: Securing the Global Empire
Page Number: 111.

35. IMF defines debt as a system problem, instead of a symptom of individual states liquidity problem
a. True
*b. False
Answer Location: Debt Management
Page Number: 114-115
36. IMF imposed privatization achieved two outcomes in the Third world: reduction in public spending and
increases in foreign ownership of public assets.
*a. True
b. False
Answer Location: Challenging the Development State
Page Number: 120

37. President Mikhail Gorbachev perestroika plans were inspired by those of the World Bank
*a. True
b. False
Answer Location: Globalization Project
Page Number: 123

38. The globalization project did not begin on any particular date, but it signifies a new way of thinking about
development.
*a. True
b. False
Answer Location: Globalization Project
Page Number: 124

39. One of the ironies of the TRIPS agreement is the fact that the global South contains 90 percent of global
biological wealth, yet scientists and corporations of the North hold 97 percent of all patents.
*a. True
b. False
Answer Location: Trade Related Intellectual Property Rights
Page Number: 140

40. Biopiracy is not related to Trade Related Intellectual Property Rights.

a. True
*b. False
Answer Location: Trade Related Intellectual Property Rights
Page Number: 140

41. Briefly explain "globalization project":

Answer: Varies. Globalization is called a project in order to emphasizes its political dimensions. Despite the
general promise of global prosperity with “free markets,” material benefits are largely confined to only about
two-fifths of the world’s population. This is because markets are neither natural nor free. They are
institutional constructs, managed by powerful players, including international financial institutions, banks,
corporations, states, and even nongovernmental organizations (NGOs). The distinctiveness of the
globalization project is its political intervention to overcome the limits of the development project, which
focused on the nation state. Therefore, development, which had been defined as nationally managed
economic growth, was redefined in the World Bank’s World Development Report 1980 as “participation in
the world market.”
Answer Location: Globalization Project
Page Number: 110-111

42. What is the relationship between development and globalization.

Answer: Varies. Development is a post-colonial initiative which centers on nationally managed economic
growth. The focus is on the nation state and its capability to stimulate development. Globalization on the
other hand, was redefined in the World Bank’s World Development Report 1980 as “participation in the world
market.” However, despite the general promise of global prosperity with “free markets,” (as enshrined in
globalization) material benefits are largely confined to only about two-fifths of the world’s population, mainly
those in the First World.
world market.”
Answer Location: Globalization Project
Page Number: 110-111

43. Briefly explain James Linen, president of Time-Life Inc.'s assertion that globalization project represents
the "birth of this new global order"
Answer: Varies. The new global order represents a new climate in which private enterprise and developing
countries work together, under free enterprise, for the greater profit of the free world. This world of
international enterprise is more than governments and not limited to nation states. It is the seamless web of
enterprise, which has been shaping the global environment at revolutionary speed, aided by advances in
information technology.
Answer Location: Securing the Global Market
Page Number: 111

44. What is the New Economic Order (NIEO), and was it successful in uniting Third World Countries? The NIEO
was a charter of economic rights and duties of states, designed to codify global reform along neo-Keynesian
lines (public initiatives). Widely perceived as “the revolt of the Third World,” the NIEO initiative was a
culmination of collectivist politics growing out of the Non-Aligned Movement (NAM). But it was arguably a
movement for reform at best (as its prime movers were the presidents of Algeria, Iran, Mexico, and
Venezuela—all oil-producing nations distinguished by their very recently acquired huge oil rents, as opposed
to the impoverished “least developed countries” (LDCs) and the newly industrializing countries (NICs).
Because of this difference in partners, the Third World were unable to pose a united front strategy, and its
involvement unraveled, in large part because of growing divergence between middle-income and poorer
states.
Answer Location: Securing the Global Market
Page Number: 113

45. What is the debt regime and how did it arise?

Answer: Varies. The debt regime, resulted from the 1980s debt crisis, instituted a new era of global
governance in which individual national policies were subjected to external, rule-based procedures that
strengthened the grip of the First World through the international financial institutions (the IMF and the
World Bank). This regime resulted also from tensions and lack of unity within the Third World which
ultimately enabled global political and economic elites to argue that a country’s debt stress stemmed from
failure to copy and imitate the NICs’ strategy of export diversification in the world market, thus justifying
external controls and interventions to relieve debt crises and promote development project's ideals.
Answer Location: Debt Regime
Page Number: 113

46. Briefly explain the debt trap: The debt track occurred because debt was choking the economies of Third
World countries. To repay the interest (at least), they had to drastically curtail imports and drastically raise
exports. But reducing imports of technology jeopardized economic growth (which, paradoxically is needed
to generate the capital for debt repayment]. Expanding exports was problematic, as commodity prices were
at the lowest in 40 years—a result of the expansion of commodity exports to reduce debt. The market alone
could not solve these problem, and therefore Third World countries had to resort to more loans from private
outlets to service their loans.
Answer Location: Debt Regime
Page Number: 113

47. Using insights from Chapter 4 and 5, what is the link between neo-liberalist policies (such as structural
adjustment program) and the development / operation of free trade or export processing zones?
Answer: Varies. Students should be able to focus on one conditionality of SAPs, which is trade liberalization,
i.e., loosening trade barriers. These liberalization imply opening up borders (both literally and figuratively)
to multinational corporations to set up shops in (mainly) Third World countries receiving debt relief under
SAP. EPZs became one manifestation of trade liberalization.
Answer Location: Debt Management
Page Number: 114-115

48. Briefly explain the importance of the Washington Consensus.

Answer: Varies. With the advent of the globalization project, development did not disappear; rather, its
meaning changed - that is global elites reframed development as the deepening of markets (as resource
allocators), subsumed under a new term, called Washington Consensus. The globalization project involved
political choices to (re)define the bearings and future of states and their civic responsibilities. If competing in
the world market requires policies of cutting public expenditures that may reduce safeguards and standards
of employment, health care, and education, then globalization is a decision, not an inevitability. And it centers
on “governance,” which overrides and reformulates government which were hitherto, driven largely by the
concerns of the nation-state alone.
Answer Location: Globalization Project
Page Number: 124

49. Examine the link between structural adjustment programs / policies and health. That is, how does
structural adjustment affect health of vulnerable populations such as women?
Answer: Varies. Students should state the main tenets of the SAPs that affect health: cuts in public spending;
privatization; liberalization, etc, and relate these to health status in Third World countries. For example, cuts
in public spending affected sustainability of hospitals, decreasing capacity to care for the sick; it also led to
emigration of health care personnel unable to find reliable and long-term employment in the oft-common
public institutions. Cuts in public spending increased vulnerability of women,especially to unemployment and
consequential risks such as sex trade and prostitution which increasingly became the source of livelihood for
women in communities severely affected by SAPs. In general, SAP restricted health care expenditures,
severely limiting capacities of nation states to care for their citizens.

50. Explain the link between biopiracy and TRIPS.

Answer: Varies. There is a direct and often paradoxical link between the two. The global South contains 90
percent of global biological wealth, and scientists and corporations of the North hold 97 percent of all
patents. Patents on biological wealth give patent holders exclusive control over the use of the genetic
materials. Corporations have often patented genetic material obtained from a southern country without
payment or obligation, turned it into a commodity such as a medicine, and then charged a fee for use of the
genetic resource in local production or high prices for the commodity—even to the country where the
material originated, often over centuries. Critics view this appropriation of genetic material by foreigners as
biopiracy.
Answer Location: Trade Related Intellectual Property Rights
Page Number: 140