Week 4

THE GLOBAL INTERSTATE SYSTEM

EFFECTS OF GLOBALIZATION ON GOVERNMENTS

 As the world becomes more interconnected through politics, trade, and communications, the role of non-
states and government are also shifting .

Thus, national and local policies are not only based on local context but also international and global realities.

One example of a global treaty is the Montreal Protocol on Substances that Deplete the Ozone Layer, which
aims to phase out the production of numerous substance responsible for ozone depletion, signed in August 26, 1987
with 46 country signatories (US EPA, 2017). A definitive evidence of the Montreal Protocol’s success was discussed
by NASA and projected that ozone levels will return to 1980 levels by 2023 (Watts, 2018).
 Another side of globalization that negatively affects local governments and local communities.

A local government would like to attract major global investors in their community by setting up for instance
their manufacturing firm in the area. This could create jobs for the local people and generate income for local
businesses. However, it entails converting tracks or agricultural land into industrial zone. Farmers will displaced and
agricultural production of the area will be displaced and agricultural production will be affected.

INSTITUTIONS THAT GOVERN GLOBALIZATION

With the growing globalization, the governance of global relations goes beyond nation-state governments.
Nation-state governments scale and scope are limited in addressing regional and global issues like climate change,
cybercrime and global financial crises.

CASTELLS (2008) and DRYZEK (2012)

> Show the growing emphasis on the role of a non-state actors global governance. These non-state actors
include NGO’s, advocacy networks, voluntary associations, and interest groups.

>Their congenial and more approachable strategies appeal the community and even other state actors and
has a potential to organize across areas.

> The shift of the authority actors above and below the state is termed as “glocalization” or “internal
globalization”
> As the role of the nation-state and governments shifted, participation of these new actors has opened up.

> One of the most renowned modern examples of the active role of non-state actors in global movements in
the 1992 UN Conference on Environmental and Development. The world saw the most active and broadest role of
non-state actors in pushing for more just and sustainable development.

> There are several institutions that govern international relations and affairs. First and foremost is the
United Nations. With 192 member states, it is seen as the facilitator of global governance.

> Another is the regional commissions, which are group of officials from different countries that instruct and
debate, and are in charge of making certain laws promulgate certain rights for economic and social development.
Commission for Africa (ECA)

Economic Commission for Europe (ECE)

Economic Commission for Latin American and the Caribbean (ESCLAC)

Economic Social Commission for Asia and the Pacific (ESCAP)

Economic and Social Commission for Western (ESCWA)

WORLD BANK (WB) is an international financial institution that provides loans to countries of the world for capital
projects, establish during the Bretton Woods Conference in 1944 and include other members like the:
Bretton Bank for Reconstruction and Development (IRDB)

International Development Association (IDA)

International Finance Corporation (IFC)

Multilateral Investment Guarantee Agency (MIGA)

INTERNATIONAL ORGANIZATIONS
International Monetary Fund (IMF)

Looks at the stability of the international monetary system by monitoring global economy, lends to
countries, and provides policy and technical advisory functions.

World Trade Organization (WTO)

Regulate international trade, ensure smooth flow of trade, and provides a forum or negotiations for trade
agreements among countries and regions of the world.

World Health Organization (WHO)

Responsible for global researches on medicines and vaccines including the World Health Report and Survey

Organizations for Economic and Development (OECD)

Thirty five member countries aim to simulate economic progress and world trade by providing a platform to
compare policy experiences and identify good practices in domestic and international economic policies and
programs of its members.
International Labor Organization (ILO)

Deals with labor problems and international labor standards and social protection for workers.

Food and Agriculture Organization of the United Nations (FAO)

Leads international efforts to defeat hunger, eliminate food insecurity and malnutrition, and increase
resilience of livelihoods and food.

UNESCO
Contributes to peace and security by promoting international collaboration through educational, scientific, and
cultural reforms.

International Civil Aviation (ICAO) International Maritime Organization (IMO) International Telecommunication
Union (ITU) The World Intellectual Property Organization (WIPO)

For regulations international air transport; shipping and prevention and pollution at sea; developing
standards on ICT; international intellectual property rights and standards
GLOBAL INTERSTATE SYSTEM

Is an institutional arrangement of governance that addresses regional and globalized issues that go beyond
the scope of a nation-state.

INTERNATIONALISM

Is define as political, economic, and cultural cooperation between nations.

Puts emphasis on diversity and celebrates multiculturism.

GLOBALISM
Is an ideology based on the belief that flow of people, goods, and information should flow freely across national
boarders.

Focuses more on the economic aspect of the exchanges among countries and society.
WEEK 5

MARKET INTEGRATION

Definition of Terms
MARKET INTEGRATION is a process by which economies are becoming more interdependent and interconnected in
terms of commodity flows including externalities and spillover of impacts.

INTERNATIONAL FINANCIAL INSTITUTION or IFIS are institutions that provide support through loans or grants and
technical advice to promote country’s economic and social development.

CORPORATIONS are private institutions that produce or manufacture goods, products, and services for a more
expanded market usually at the reach regions of the world.
The International Financial Institutions and their Role in the Global Economy
International Financial Institutions or IFIS

>Have a significant role in global economic development. Compared to private financing institutions, IFI’s
provide financial and technical services and products not for profit but for over all economic and social
development.

>provide loans, technical assistance, and policy-based lending macroeconomic stability and providing the
necessary infrastructure and systems, sectoral reforms, and creation of safety net through policy based lending

>also work with the private sector for investment and policy to promote private expansion.

>undeniably have been a critical actor in the contemporary world. Their contributions to social and
economic development and progress in the modern times are recognized.

Four key issues with IFI’s

First, Bhargava argues that some critics question IFI’s LEGITIMACY given that majority of its shareholders and policy
making powers lie with powerful, rich nations. Leaders of these IFI’s, also by default, have come from developed
countries. Such heads of IMF always been a European, an American for World Bank, and a European for EDRD, thus a
clamor for IFI’s to select leaders based on merits and not on national origin.

Second, different sectors have questioned the EFFECTIVENESS of the IFI’s development assistance programs and
policy advices. Some of the IFI’s investment have been controversial such as support to large-scale land use
conversion, which has displaced numerous indigenous peoples in some areas like in the Philippine Case (Rivers
Watch East and Southeast Asia (RWESA), 2003). Thus social safeguards to ensure human rights, community, and
environment well-being need to be instated.
Third, the major products of the IFI’s are loans provide capital for development initiative countries. However, it does
not come for free and comes with certain CONDITIONS that the borrowing country has to meet. This conditionality
was set in place as a form of safeguard to ensure that loans are spent efficiently for its intended use. Nevertheless,
some conditions on privatization, trade, liberalization, elimination of subsidy, and limits to public investments are
mostly contested and argued against by some sectors.

Lastly, the FINANCIAL CAPACITY and sustainability of IFI’s is another concern. The IFI’s income based has reduced
compared to what it was before, although the demand from IFI’s are increasing particularly in contributing toward
regional and global development initiative. Some middle income countries also limit their loans with IFI’s due to high
transactional cost as well as the conditionality commonly attached to these financial services.
A Summarized History of the Global Economy
>The modern capitalist world economy flourished between the 16th to 18th centuries.

>The start of the modern global trade leading to 1914 was considered the first period of globalization. It is
where the trade, capital, and immigration flows grew tremendously and in large volume but the global institutional
architecture to manage these were quite limited.
 >From the Second World War to the late 1990’s the modern international economic enabling architecture
was established. In addition, we see the expansion of MNC’s across the globe, supported by enabling policies and
improved communications and transport.

>from the late 1990’s until very recently, Bhavarga contends and characterize the third wave of market
integration. We see the advent of the modern internet, the WTO establishment, and formal entry of China into the
trading system through its accession to international financial institutions.

> as the world enters what the World Economic Forum argues as the “Fourth Industrial Revolution,” Mueller
predicted that there will be slower economic growth, political destabilization, and diffusion of power. Some of his
recommendations to remedy these include reforms in work, economic spending, improving solidarity, openness, and
cooperation among countries
Global Corporations
>Aside from IFI’s and governments, one of the major players in globalization and the modern capitalist
market is the global corporations.

>The number of global corporations from emerging market economies listed in the Fortune Global rose from
47 firms to 95 in 2010

>The modern global corporations are commonly referred to as

Multinational Corporations – provide central decisions

Transnational Corporations – provide individual foreign market investment to have their own operations and system