International Relations: Alliances and Security

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Questions and Answers

What is the primary purpose of alliances in world politics?

  • Promote global peace
  • Create economic cooperation
  • Ensure peace for all members
  • Prepare for war (correct)

Collective Security Organizations only protect their member states.

False (B)

What theory describes the concept of states balancing power to prevent dominance?

Balance of Power Theory

The ______ of Power refers to both sides being equally strong to avoid war.

<p>Balance</p> Signup and view all the answers

Match the following types of alliances with their descriptions:

<p>Bilateral = Agreement between two states Multilateral = Agreement involving several states Symmetrical = Equal contributions from members Asymmetrical = Unequal contributions from members</p> Signup and view all the answers

Which of the following describes 'bandwagoning' in international relations?

<p>Weaker states joining stronger powers for rewards (B)</p> Signup and view all the answers

Alliances are always reliable in providing military support to member states.

<p>False (B)</p> Signup and view all the answers

What organization was formed in 1945 to promote global peace?

<p>United Nations (UN)</p> Signup and view all the answers

What is a major drawback of protectionism?

<p>It raises prices for consumers. (B)</p> Signup and view all the answers

Free trade is more beneficial for consumers than for exporters.

<p>True (A)</p> Signup and view all the answers

What role do governments play in easing the impact on losers of free trade?

<p>Governments offer retraining programs or unemployment benefits.</p> Signup and view all the answers

Countries with ________ resources are generally more supportive of protectionism.

<p>scarce</p> Signup and view all the answers

Match the trade organizations with their characteristics:

<p>GATT = Lowered trade barriers after WWII WTO = Stronger enforcement and compliance monitoring NAFTA = Trade agreement between North America countries UNCTAD = Focuses on trade and development issues</p> Signup and view all the answers

Which of the following best describes the Stolper-Samuelson theorem?

<p>It explains how trade benefits abundant resources. (B)</p> Signup and view all the answers

The Prisoner's Dilemma suggests that protecting trade can lead to long-term benefits for countries.

<p>False (B)</p> Signup and view all the answers

Explain the concept of comparative advantage.

<p>Comparative advantage suggests that countries should specialize in producing goods they can produce more efficiently than others.</p> Signup and view all the answers

Tariffs are designed to ________ imports.

<p>tax</p> Signup and view all the answers

Match the type of trade restriction with its definition:

<p>Tariff = A tax on imported goods Quota = A limit on the quantity of goods Subsidy = Financial support for local industries Prohibition = A ban on certain goods</p> Signup and view all the answers

What does the WTO aim to achieve?

<p>Complete trade liberalization. (B)</p> Signup and view all the answers

Workers in competitive industries generally support free trade.

<p>True (A)</p> Signup and view all the answers

Name one factor that influences a country's trade policy.

<p>Resource abundance or industry focus.</p> Signup and view all the answers

Countries that focus on their ________ are likely to succeed in international trade.

<p>strengths</p> Signup and view all the answers

Which of the following best describes the primary purpose of the IMF?

<p>Stabilize currencies and provide short-term financial assistance (B)</p> Signup and view all the answers

The World Bank focuses on short-term financial stability rather than long-term development.

<p>False (B)</p> Signup and view all the answers

What are the two types of private foreign investment?

<p>Portfolio investment and Foreign Direct Investment (FDI)</p> Signup and view all the answers

The IMF is often referred to as the "________ for financial crises."

<p>doctor</p> Signup and view all the answers

Match the following terms with their appropriate descriptions:

<p>Portfolio Investment = No control over management Foreign Direct Investment = Full control over foreign assets Austerity Measures = Cuts to public services and spending Debt Crisis = Struggle to repay borrowed money</p> Signup and view all the answers

What is one criticism of the IMF?

<p>It imposes austerity measures that can harm citizens. (A)</p> Signup and view all the answers

Which of the following is a common criticism of Multinational Corporations (MNCs)?

<p>They often ignore local cultural norms (C)</p> Signup and view all the answers

Sovereign lending includes loans to private corporations in a foreign country.

<p>False (B)</p> Signup and view all the answers

Sovereign lending involves loans from private financial institutions to individual corporations.

<p>False (B)</p> Signup and view all the answers

What major consequence resulted from the Asian Financial Crisis of 1997?

<p>Countries turned to the IMF for economic assistance.</p> Signup and view all the answers

What is one main challenge that countries face when borrowing?

<p>Debt crises can occur if borrowing does not lead to economic growth.</p> Signup and view all the answers

The __________ helps facilitate agreements between borrowers and lenders during economic crises.

<p>IMF</p> Signup and view all the answers

The primary role of the World Bank is to fund __________ projects to reduce poverty.

<p>long-term development</p> Signup and view all the answers

Match the following factors affecting development with their descriptions:

<p>Geographic Location = Influences trade and agricultural potential Corruption = Leads to prioritization of special interests Domestic Institutions = Determine a country's economic policy International Factors = May favor wealthy nations over poorer ones</p> Signup and view all the answers

What was a significant consequence of the 2008 financial crisis in the U.S.?

<p>Global ripple effects leading to crises in other countries (C)</p> Signup and view all the answers

Foreign Direct Investment (FDI) offers investors control over foreign businesses.

<p>True (A)</p> Signup and view all the answers

Which factor is considered a domestic factor affecting economic development?

<p>Corruption in government (A)</p> Signup and view all the answers

Tropical countries generally benefit from easier agricultural development compared to temperate climates.

<p>False (B)</p> Signup and view all the answers

How do debt crises generally arise?

<p>Debt crises arise if borrowing does not lead to economic growth.</p> Signup and view all the answers

What is the primary purpose of the World Bank?

<p>To fund long-term development projects to reduce poverty.</p> Signup and view all the answers

MNCs are often criticized for __________ and tax avoidance.

<p>outsourcing</p> Signup and view all the answers

Countries that are __________ may face difficulties in trade due to lack of access to ports.

<p>landlocked</p> Signup and view all the answers

Match each organization with its primary function:

<p>IMF = Crisis fixer World Bank = Development supporter African Development Bank = Supports regional development Multinational Corporations = Invest in foreign markets</p> Signup and view all the answers

Which of the following best describes Foreign Direct Investment (FDI)?

<p>Investments made to control facilities in foreign countries. (C)</p> Signup and view all the answers

The uneven distribution of wealth has no impact on the institutions and policies of a country.

<p>False (B)</p> Signup and view all the answers

What is a common consequence of poor governance in developing countries?

<p>Corruption and lack of infrastructure development.</p> Signup and view all the answers

The __________ sometimes imposes policies that are geared towards benefiting wealthy nations.

<p>WTO</p> Signup and view all the answers

What is a major factor that can lead to biased policies in the UN Security Council?

<p>The veto power held by P5 members (D)</p> Signup and view all the answers

Peacekeeping operations in the UN do not require the agreement of the host state.

<p>False (B)</p> Signup and view all the answers

Name one historical example of a failure of a Collective Security Organization.

<p>Rwanda</p> Signup and view all the answers

Countries often restrict trade through __________, which are taxes on imports.

<p>tariffs</p> Signup and view all the answers

Match the following concepts with their definitions:

<p>Absolute Advantage = When a country is better than another at producing a product Comparative Advantage = Focusing on producing what is best for the country using its resources Peace-Enforcing = Directly fighting aggressors Peacekeeping = Preventing violence within states</p> Signup and view all the answers

Which of the following is NOT a type of UN military operation?

<p>Trade Intervention (D)</p> Signup and view all the answers

Countries with abundant labor tend to export labor-intensive goods.

<p>True (A)</p> Signup and view all the answers

Which political institution is most likely to promote liberalized trade?

<p>A broad-based democracy (A)</p> Signup and view all the answers

What are two key factors that contribute to the success of Collective Security Organizations?

<p>Agreement among powerful states and contribution of resources by members.</p> Signup and view all the answers

The UN was created to save humanity from __________.

<p>hell</p> Signup and view all the answers

What is one key difference between GATT and WTO?

<p>WTO can enforce trade rules and impose sanctions; GATT could not. (A)</p> Signup and view all the answers

The WTO aims for complete liberalization of trade.

<p>True (A)</p> Signup and view all the answers

Match the following types of trade advantages:

<p>Absolute Advantage = Production capabilities of different countries Comparative Advantage = Focus on relative opportunity cost Tariffs = Taxes on imports Quotas = Limits on the number of goods imported</p> Signup and view all the answers

What is the primary focus of CSOs?

<p>Protect everyone, not just members (B)</p> Signup and view all the answers

Democracies tend to be less protectionist than dictatorships.

<p>True (A)</p> Signup and view all the answers

How does a country’s abundant factor influence its trade preferences according to the Stolper-Samuelson approach?

<p>The abundant factor seeks to gain from trade, leading to preferences for trade policies that protect it.</p> Signup and view all the answers

A state should focus on producing the goods it has the absolute advantage in.

<p>False (B)</p> Signup and view all the answers

What is the mutual benefit when two countries cooperate in trade instead of implementing protectionist policies?

<p>Increased economic efficiency and mutual gains from trade.</p> Signup and view all the answers

What are the two categories of agreements in international trade?

<p>Defensive and Offensive</p> Signup and view all the answers

Match the type of international investment with its description:

<p>Portfolio Investment = Investing without control over the business Foreign Direct Investment (FDI) = Building or buying a facility in another country MNCs = Investing in multiple countries for operational control Sovereign risk = Risk of a borrower defaulting on a loan</p> Signup and view all the answers

The UN Security Council consists of __________ permanent members who have veto power.

<p>five</p> Signup and view all the answers

The ______ involves countries borrowing or investing money to grow economically.

<p>international financial relations</p> Signup and view all the answers

Which of the following is a challenge faced by Collective Security Organizations?

<p>Lack of will or agreement among members (D)</p> Signup and view all the answers

MNCs often invest abroad to access ______ resources and cheaper ______.

<p>natural; labor</p> Signup and view all the answers

What are some controversies surrounding multinational corporations (MNCs)?

<p>Complaints include MNCs paying too little in taxes, dominating local markets, and outsourcing jobs.</p> Signup and view all the answers

Why do developing countries borrow money?

<p>To build infrastructure or fund economic growth (C)</p> Signup and view all the answers

Borrowing is always beneficial for a country's economy.

<p>False (B)</p> Signup and view all the answers

Summarize the main reasons why international institutions like the WTO are important for global trade.

<p>They help manage trade disputes, enforce trade agreements, and promote trade liberalization.</p> Signup and view all the answers

A company building a factory in another country is an example of ______.

<p>Foreign Direct Investment (FDI)</p> Signup and view all the answers

Explain the commitment problem in debtor-creditor relationships.

<p>Borrowers must prove their ability to repay debt, and if they default, lenders may retaliate by cutting future loans.</p> Signup and view all the answers

Which of the following is an example of the 'resource curse'?

<p>Nigeria's reliance on oil exports leading to corruption (B)</p> Signup and view all the answers

Countries with an abundance of natural resources are always economically successful.

<p>False (B)</p> Signup and view all the answers

What does ISI stand for?

<p>Import-Substitution Industrialization</p> Signup and view all the answers

The 'Washington Consensus' focuses on ____ liberalization and privatization.

<p>trade</p> Signup and view all the answers

What is a main focus of Export-Oriented Industrialization (EOI)?

<p>Producing goods primarily for export markets (D)</p> Signup and view all the answers

Corruption in domestic policy can hinder development.

<p>True (A)</p> Signup and view all the answers

Name one successful example of EOI.

<p>South Korea</p> Signup and view all the answers

Institutions that promote _____ lead to development.

<p>equality</p> Signup and view all the answers

Which of the following is a characteristic of bad domestic policies?

<p>Corruption and short-term political gain (A)</p> Signup and view all the answers

The IMF and World Bank always favor the interests of developing nations.

<p>False (B)</p> Signup and view all the answers

What does the mnemonic 'T-W-I' represent?

<p>Trade, WTO, IMF</p> Signup and view all the answers

Match the following development strategies with their key characteristics:

<p>Import-Substitution Industrialization = Focus on domestic manufacturing with high trade barriers Export-Oriented Industrialization = Emphasis on producing goods for global markets Washington Consensus = Advocates for trade liberalization and privatization Resource Curse = Natural resource wealth leads to poor economic outcomes</p> Signup and view all the answers

High levels of disease can be a challenge to _____ development in tropical countries.

<p>economic</p> Signup and view all the answers

What is one main problem associated with Import-Substitution Industrialization?

<p>Inefficiency due to small markets</p> Signup and view all the answers

What was a key result of equal wealth distribution in North America?

<p>Rapid development (C)</p> Signup and view all the answers

The WTO is known for favoring LDCs in its trade policies.

<p>False (B)</p> Signup and view all the answers

Name one major criticism of international institutions like the IMF and WTO.

<p>They favor rich countries.</p> Signup and view all the answers

As incomes rise, Engel's Law states people spend a smaller percentage on ______.

<p>food</p> Signup and view all the answers

Match the following economic strategies with their characteristics:

<p>Import-Substitution Industrialization (ISI) = Domestic focus, protected industries Export-Oriented Industrialization (EOI) = Global focus, export incentives</p> Signup and view all the answers

Which of the following was not a reason ISI lost support in the 1970s?

<p>Subsidies for farmers (A)</p> Signup and view all the answers

The Washington Consensus solely promotes state-owned enterprises.

<p>False (B)</p> Signup and view all the answers

What impact does corruption within a country have on economic development?

<p>It blocks development by prioritizing elite interests over public goods.</p> Signup and view all the answers

The ICCPR focuses on ______ rights, while the ICESCR emphasizes ______ rights.

<p>negative; positive</p> Signup and view all the answers

Match the following components of human rights with their descriptions:

<p>Negative rights = Right to freedom from interference Positive rights = Right to certain basic needs</p> Signup and view all the answers

How did Export-Oriented Industrialization contribute to East Asian economies?

<p>By encouraging manufacturing for foreign markets (A)</p> Signup and view all the answers

The UDHR was established in 1948 and is considered the most authoritative document on human rights.

<p>True (A)</p> Signup and view all the answers

Name two policies associated with the Washington Consensus.

<p>Trade liberalization and privatization of state-owned enterprises.</p> Signup and view all the answers

Countries that are landlocked often struggle with ______ and ______.

<p>trade; access to resources</p> Signup and view all the answers

Which reason contributed to North America's faster development compared to South America?

<p>Equal wealth distribution led to democratic institutions in North America (C)</p> Signup and view all the answers

What term describes the efforts to heal and reconcile after human rights abuses?

<p>Transitional justice (B)</p> Signup and view all the answers

The 'resource curse' suggests that having abundant natural resources guarantees a country's economic growth.

<p>False (B)</p> Signup and view all the answers

What is one potential negative outcome of colonial legacies on developing countries?

<p>Underdeveloped infrastructure</p> Signup and view all the answers

The ICC prosecutes states for war crimes.

<p>False (B)</p> Signup and view all the answers

What is the primary role of the International Criminal Court (ICC)?

<p>To try individuals for war crimes and crimes against humanity.</p> Signup and view all the answers

The Washington Consensus is associated with policies like ______ and ______.

<p>privatization, trade liberalization</p> Signup and view all the answers

Which of the following illustrates a conflict between human rights and national security?

<p>The use of torture on terrorist suspects post-9/11 (D)</p> Signup and view all the answers

The Universal Declaration of Human Rights (UDHR) serves as a global standard for __________.

<p>human rights</p> Signup and view all the answers

What is a major factor that influences a state’s willingness to protect human rights?

<p>The stability of its political institutions (C)</p> Signup and view all the answers

Which of the following best explains why tropical countries often face economic challenges?

<p>High levels of disease and poor soil quality (C)</p> Signup and view all the answers

Match the following terms with their definitions:

<p>ICCPR = Civil and political rights ICESCR = Economic, social, and cultural rights Transitional Justice = Healing processes post-abuse Universal Jurisdiction = Victim appeals to international bodies</p> Signup and view all the answers

Equal wealth distribution in North America played no role in developing democratic institutions.

<p>False (B)</p> Signup and view all the answers

Which of the following is NOT a reason why states may violate human rights?

<p>Public protest (C)</p> Signup and view all the answers

What is the main challenge to enforcing international human rights law?

<p>Sovereignty of states and lack of enforcement mechanisms (D)</p> Signup and view all the answers

Population growth contributes to the worsening of global environmental problems.

<p>True (A)</p> Signup and view all the answers

Name two criticisms of international institutions like the IMF.

<p>Imposed austerity measures, favoring wealthy nations</p> Signup and view all the answers

Transitional justice is about punishment for past abuses.

<p>False (B)</p> Signup and view all the answers

The concept of _____ refers to the problem where shared resources are overused and depleted by individuals.

<p>Tragedy of the Commons</p> Signup and view all the answers

What challenge does the ICC face in its operations?

<p>Prolonging conflict due to leaders avoiding prosecution.</p> Signup and view all the answers

An example of Export-Oriented Industrialization is ______.

<p>South Korea's rapid industrial growth</p> Signup and view all the answers

Name one principle that helps ensure environmental protection.

<p>Polluter Pays Principle</p> Signup and view all the answers

The __________ conducts a Universal Periodic Review to assess the human rights practices of member states.

<p>Human Rights Council</p> Signup and view all the answers

How did colonial legacies affect the economic paths of developing countries?

<p>They often left a legacy of extractive economies and instability. (C)</p> Signup and view all the answers

Engel's Law suggests that as income increases, the proportion of income spent on food decreases.

<p>True (A)</p> Signup and view all the answers

Which agreement aimed to limit global warming to 2°C?

<p>Paris Agreement (B)</p> Signup and view all the answers

What is one example of a right protected by the ICESCR?

<p>Right to education (A)</p> Signup and view all the answers

What is one way political corruption can block economic development?

<p>By diverting funds away from public services</p> Signup and view all the answers

Universal jurisdiction allows victims to appeal to their own national courts only.

<p>False (B)</p> Signup and view all the answers

Match the environmental problems with their respective types.

<p>Global warming = Air Deforestation = Land Water depletion = Water Ozone depletion = Air</p> Signup and view all the answers

Public goods are limited resources that everyone can benefit from.

<p>False (B)</p> Signup and view all the answers

Provide one example of a controversial human rights issue.

<p>Abortion rights or freedom of speech restrictions.</p> Signup and view all the answers

Countries rich in natural resources but still underdeveloped are often said to suffer from the ______.

<p>resource curse</p> Signup and view all the answers

China's Great Leap Forward is an example of a government policy that led to __________.

<p>mass starvation</p> Signup and view all the answers

What term is used for the movement where developed countries argue that developing nations should reduce pollution?

<p>Common Pool Resources</p> Signup and view all the answers

What typically characterizes Import-Substitution Industrialization (ISI)?

<p>Focus on reducing imports by developing domestic industries (B)</p> Signup and view all the answers

What is the main purpose of the Universal Periodic Review conducted by the Human Rights Council?

<p>To evaluate human rights practices of member states (A)</p> Signup and view all the answers

The ________ Protocol was the first international agreement to reduce greenhouse gases.

<p>Kyoto</p> Signup and view all the answers

What factor can help improve international cooperation on environmental issues?

<p>Private benefits (A)</p> Signup and view all the answers

What is one of the reasons for difficulty in global environmental cooperation?

<p>Tragedy of the Commons</p> Signup and view all the answers

Developing countries are the largest historical polluters.

<p>False (B)</p> Signup and view all the answers

What right is guaranteed under freedom of thought and religion?

<p>All of the above (D)</p> Signup and view all the answers

Positive rights refer to rights that require action from the government to be fulfilled.

<p>True (A)</p> Signup and view all the answers

States may violate human rights to preserve their own ______.

<p>rule</p> Signup and view all the answers

Which treaties are part of the International Bill of Rights?

<p>The ICCPR and the ICESCR (A)</p> Signup and view all the answers

Non-derogable rights can be suspended during times of war or emergencies.

<p>False (B)</p> Signup and view all the answers

What does the principle of 'non-intervention' protect?

<p>The sovereignty of states</p> Signup and view all the answers

The Human Rights Council’s Universal Periodic Review is designed to review each state's ______.

<p>human rights practices</p> Signup and view all the answers

Match the following concepts with their corresponding descriptions:

<p>Transitional justice = Noncriminal and nonjudicial mechanisms for reconciliation Universal Jurisdiction = States prosecuting individuals for crimes globally Negative rights = Rights that require restraint from the government Civil rights = Rights that protect individuals from state infringements</p> Signup and view all the answers

Which action has been a success of the ICC?

<p>Increasing prosecutions of rebel group abuses (A)</p> Signup and view all the answers

The ICC has successfully eliminated the need for universal jurisdiction.

<p>False (B)</p> Signup and view all the answers

Why might some states violate human rights?

<p>To defend national security or to preserve their rule</p> Signup and view all the answers

Human rights violations often arise from a lack of ______ to enforce laws.

<p>capacity</p> Signup and view all the answers

Which of the following is an example of a controversial human rights issue?

<p>All of the above (D)</p> Signup and view all the answers

Flashcards

Anarchy in World Politics

A situation where there is no central authority to enforce rules or laws.

Alliances

Agreements between states to cooperate militarily in case of conflict.

Collective Security Organizations (CSOs)

A group of states working together to maintain peace and security for all members.

Balance of Power Theory

The theory that states balance their power by forming alliances to prevent any one state from becoming too dominant.

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Bandwagoning

When weaker states join a stronger power in order to gain benefits, often in anticipation of a war.

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Collective Action Problem

A problem in which everyone benefits from a common good, but some individuals may not contribute, relying on others to do the work.

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Credibility of Alliances and CSOs

The ability of an alliance or CSO to be trusted and taken seriously by other states. This involves demonstrating commitment and capability.

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Asymmetrical Alliances

A situation where the contributions of alliance members are unequal, with some members bearing a greater share of the burden.

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Collective Security

A situation where countries or groups of countries agree to cooperate to prevent aggression and maintain peace. It involves a shared commitment to respond collectively to threats against any member.

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Veto Power

The power to block a decision in the UN Security Council. Permanent members (U.S., UK, France, Russia, China) have this power, which can lead to biased policies by preventing action.

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Balance of Power

The principle of balancing power between states to prevent any single actor from dominating. States form alliances or take other measures to ensure no one state becomes too powerful.

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Peace Enforcing

Conflict resolution using military force to directly confront aggressors and stop their actions. This type of UN operation involves active intervention to restore peace.

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Peacekeeping

Interposing an armed force between warring parties to prevent further violence and create a space for negotiations. This requires the consent of the host country.

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Absolute Advantage

The ability of a country to produce a good or service more efficiently than another country, using fewer resources or achieving higher output.

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Comparative Advantage

The ability of a country to produce a good or service at a lower opportunity cost compared to other countries. It focuses on what a country does best with its existing resources.

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Factors of Production

The factors that contribute to a country's production capabilities, including land, labor, and capital. Each factor plays a crucial role in shaping a country's trade patterns.

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Heckscher-Ohlin Theory

A theory that states countries will export goods that use their most abundant factor of production. Countries rich in land tend to export agriculture, while labor-rich countries export labor-intensive goods.

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Tariffs

Taxes imposed on imports or exports to influence trade patterns. They can be used to protect domestic industries or generate revenue.

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Quotas

Limits on the quantity of goods allowed to be imported. They create artificial scarcity and can protect domestic industries.

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Subsidies

Financial assistance provided by governments to domestic industries to make them more competitive. They can be used to support struggling sectors or encourage exports.

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Prohibitions

A complete ban on the import or export of certain products. These restrictions can be imposed for reasons such as national security or ethical concerns.

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Gains from Trade

A situation where a country benefits from trade because it can specialize in producing goods or services that it is relatively more efficient at, allowing it to consume more goods overall.

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Winners and Losers of Free Trade

Consumers benefit from cheaper goods, and export-focused industries thrive. However, it can hurt protected industries and workers in uncompetitive sectors.

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Winners and Losers of Protectionism

Local industries benefit, as they face less competition from imports. However, consumers pay higher prices, and exporters may face retaliation from other countries.

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Trade Policies and Politics

Trade policies are influenced by who benefits most – either resource-rich regions or specific industries.

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The Prisoner's Dilemma in Trade

A situation where two countries could benefit from cooperation (free trade), but each acts in its own self-interest, leading to suboptimal outcomes for both.

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Why Trade is Mutually Beneficial

Focus on producing goods where you're relatively better, even if you're not the absolute best. It leads to gains for everyone.

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Benefits of Free Trade

Trade is win-win! Countries specialize in what they do best, leading to affordable goods for everyone.

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Challenges of International Trade

Trade is complex! Winners and losers emerge, and politics play a role. International institutions like the WTO help manage this complexity.

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GATT and WTO

The WTO is a stronger enforcer of trade rules than the GATT, advocating for complete trade liberalization.

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Compensation for Losers of Free Trade

Governments can offer retraining programs and unemployment benefits to help people impacted by free trade transition to new jobs and industries.

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International Financial Relations

Countries borrowing money or investing in each other to help their economies grow. But, the international financial system can lead to conflicts, crises, and burdens like debt crises.

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Portfolio Investment

Buying bonds, loans, or stocks in another country without controlling the business. Examples include buying government bonds or company shares.

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Foreign Direct Investment (FDI)

A company from one country builds or buys a facility in another country and directly manages it. For example, a U.S. car company building a factory in India.

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Why Countries Borrow Money

Developing countries borrow money because they don't have enough capital to grow. This helps them build infrastructure and fund economic growth.

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Why Investors Lend or Invest Abroad

Investors lend money to other countries for higher returns, access to resources like oil, or better business environments.

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The Risk: Borrowers Failing to Repay

Borrowers struggle to repay loans due to economic problems, leading to austerity measures like tax hikes and spending cuts.

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The Risk: Sovereign Risk

Lenders face the risk of borrowers not repaying their loans, causing financial losses for the lenders.

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What Are MNCs?

Multinational Corporations (MNCs) invest in foreign countries to build factories, offices, or facilities, like Google opening a data center in Singapore.

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Why Do MNCs Invest Abroad?

MNCs invest abroad seeking cheap labor, local resources, new markets, or countries with looser regulations.

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Controversies Around MNCs

Host countries complain that MNCs pay low taxes, dominate local markets, and may disrespect local culture. Home countries complain about job outsourcing and lack of investment back home.

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Commitment Problem

The problem of borrowers convincing lenders they will repay their loans. If they fail, lenders can cut future loans or freeze assets.

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Incomplete Information

Lenders lack complete information about a borrower's financial situation making it hard to decide if they can repay.

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IMF (International Monetary Fund)

The International Monetary Fund was established to manage global financial stability, especially after World War II.

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Trade Liberalization Creates Winners and Losers

Trade liberalization is good for a country's economy but creates winners and losers due to job shifts and competition.

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Why International Institutions are Important for Global Trade

International institutions like the WTO are important for global trade because they provide a forum for trade negotiations, settle disputes, and enforce trade rules.

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What is the IMF's role?

The International Monetary Fund (IMF) is a global financial institution that provides loans to countries facing economic difficulties. It sets conditions on loans to ensure a country can manage its finances properly.

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When does a country need the IMF?

The IMF's purpose is to help countries facing financial crises, like Greece during the 2008 financial crisis, by providing loans and setting guidelines for economic stabilization.

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What are the criticisms of the IMF?

The IMF is often criticized for forcing countries to adopt austerity measures, like cutting public services, as a condition of receiving a loan. These measures can worsen living conditions for citizens.

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What is the World Bank's primary purpose?

The World Bank is an international financial institution that focuses on long-term development projects, such as building infrastructure, to help developing countries reduce poverty.

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How does the World Bank operate?

The World Bank collaborates with regional banks, like the African Development Bank, to implement development projects in specific regions.

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What is a debt crisis?

Debt crises occur when countries struggle to repay their loans due to slow economic growth, leading to a cycle of borrowing and further debt.

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How does the IMF impact distribution?

The IMF's conditions for loans can lead to distributional conflicts. While some groups, like investors, benefit, others, like citizens, may face austerity measures and economic hardship.

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What are cross-border effects?

A financial crisis in one country, like the 2008 US crisis, can have ripple effects on other countries due to interconnected global markets, causing a global economic downturn.

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What is portfolio investment?

Portfolio investment involves investing in a company or country without having control over the management, such as buying shares or bonds.

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What is Foreign Direct Investment (FDI)?

Foreign Direct Investment (FDI) involves having control over business activities in a foreign country, such as building a factory or running a business.

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Why do countries borrow money?

Countries borrow money from other countries or international institutions to invest in their economy and generate economic growth.

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Why do countries lend?

Lenders, who provide loans to countries, expect to earn a higher return on their investment compared to investing in their own country.

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What is the commitment problem?

The commitment problem in sovereign lending arises from the lack of trust between borrowers and lenders due to potential defaults and incomplete information about each other's intentions.

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What are Multinational Corporations (MNCs)?

Multinational Corporations (MNCs) invest and operate in multiple countries, bringing jobs and investment, but are often criticized for exploiting workers, avoiding taxes, and having negative environmental impacts.

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What is the criticism of outsourcing by MNCs?

MNCs are criticized for engaging in outsourcing, which involves shifting jobs from developed countries to cheaper labor markets in developing countries, leading to job losses in the former.

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Resource Curse

Wealth in natural resources often leads to poverty. Governments become reliant on resource revenue, leading to lack of taxation, accountability, and corruption. This hinders economic diversification and development.

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Good Policies

Policies that promote public goods, like education and infrastructure, are crucial for development.

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Bad Policies

Policies influenced by wealthy individuals or businesses that prioritize their own interests over the well-being of the majority.

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Equality, Democracy, Development

The interconnected relationship between equality, democratic institutions, and economic development.

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Trade Bias

Trade patterns where developing countries primarily export raw materials, leading to lower prices in competitive markets.

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WTO (World Trade Organization)

International organization that sets trade rules, often perceived as favoring developed nations.

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IMF/World Bank

International financial institutions (IMF and World Bank) that provide loans to countries but often impose conditions that may harm development.

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Import-Substitution Industrialization (ISI)

Economic strategy focused on replacing imported goods with domestically manufactured products.

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Export-Oriented Industrialization (EOI)

Economic strategy focused on producing goods for export markets, often using policies like tax breaks and cheap loans.

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Washington Consensus

A set of economic policies that emphasize free trade, privatization, fiscal discipline, and openness to foreign investment.

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Asking WHY

Analyzing development challenges by asking 'WHY' questions about factors like geography, policies, and institutions.

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Using Mnemonics

Using mnemonic devices (like acronyms) to remember complex topics, concepts, or lists.

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Making Comparisons

Comparing and contrasting different approaches to development, like ISI and EOI, to understand their strengths and weaknesses.

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Linking Examples

Linking real-world examples (like countries or industries) to specific development concepts.

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Key Factors for Development

Understanding that development depends on a combination of geographical, domestic, institutional, and international factors.

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Geography and Development

Economic development is affected by a country's geographical location, including its proximity to trade routes, climate conditions, and historical colonial legacies.

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Role of Good Governance

Effective governance, strong institutions, and policies that prioritize public goods (like infrastructure and education) are essential for economic development.

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Wealth Distribution and Development

The distribution of wealth and power within a country influences its economic growth. More equal societies tend to have democratic institutions and policies that promote development.

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International Factors and Development

The influence of international factors, such as the interests of wealthy nations, can hinder development in poorer countries.

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Landlocked Countries

Landlocked countries face higher transportation costs and limited access to international markets, impeding their economic growth.

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Tropical Climate

Tropical climates often present challenges to development, including higher disease rates, less fertile soils, and greater infrastructure maintenance needs.

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Colonial Legacy

Colonial legacies, such as arbitrary borders and disrupted ethnic unity, can create challenges for development.

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Corruption

Corruption, where leaders prioritize special interests over the public good, undermines institutions and slows economic progress.

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Wealthy Groups and Development

Wealthy groups, such as landowners, may resist economic changes that threaten their power and wealth, hindering development.

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Commitment Problem in Lending

The commitment problem in international lending arises because borrowers might not be able to repay loans, potentially leading to a reluctance by lenders to provide future funding.

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Role of International Financial Institutions

International financial institutions, like the IMF and World Bank, can play a crucial role in providing financial assistance and supporting development projects.

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World Bank's Purpose

The World Bank focuses on long-term development projects, primarily aimed at reducing poverty and promoting economic growth.

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Developing Countries and Foreign Capital

Developing countries often borrow foreign capital to achieve economic growth by accessing resources that are limited domestically.

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Dutch Disease

A pattern where countries heavily dependent on exporting raw materials face economic challenges due to fluctuating prices, limited technological advancement, and potential corruption.

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Engel's Law

The tendency for the demand for basic necessities (food, housing) to decrease as income rises, leading to a shift in spending towards non-essentials.

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Geography as a factor in development

The idea that geography plays a crucial role in shaping economic development, influencing trade, resource availability, and overall growth potential.

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Political factors affecting development

Corruption, lack of transparency, and political instability can hinder economic development by discouraging investment, undermining the rule of law, and creating an unfair playing field.

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Domestic Inequalities

The unequal distribution of wealth and resources within a society, leading to disparities in income, access to education, and opportunities.

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Role of Domestic Elites

The influence of domestic elites and powerful groups on economic policies, potentially hindering development by favoring their own interests and creating obstacles for progress.

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Globalization

The process of increased interconnectedness among countries through trade, finance, and technology, impacting development through both opportunities and challenges.

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Impacts of Globalization on Development

The potential benefits and drawbacks of the globalization process for developing countries, including access to new markets, technology transfer, but also potential exploitation and dependency.

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Development Challenges

The ongoing struggle to achieve sustainable economic growth, improve living standards, and reduce poverty in less-developed countries, facing various challenges and seeking effective strategies.

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Criticisms of International Institutions

International institutions like the IMF and WTO, while aiming to promote development, have faced criticism for potential bias towards developed countries, imposing conditions that may hinder developing nations' autonomy and growth.

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Human Rights

Rights that everyone possesses simply by being human, regardless of nationality, race, gender, or other characteristics.

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Universal Declaration of Human Rights (UDHR)

A document adopted by the United Nations in 1948, outlining fundamental human rights and freedoms.

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International Covenant on Civil and Political Rights (ICCPR)

A treaty that focuses on protecting civil and political rights, including freedom of speech, religion, and assembly.

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International Covenant on Economic, Social and Cultural Rights (ICESCR)

A treaty that focuses on protecting economic, social, and cultural rights, including the rights to education, healthcare, and a decent living standard.

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Transitional Justice

Actions taken by countries to address human rights abuses after periods of conflict or repression. These actions often focus on healing and reconciliation rather than just punishment.

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Universal Jurisdiction

The principle that allows victims of human rights abuses to take their case to international courts, bypassing their own governments.

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International Criminal Court (ICC)

An international court established to prosecute individuals for serious international crimes, such as war crimes, crimes against humanity, and genocide.

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Universal Periodic Review (UPR)

A process where all UN member states are reviewed by the Human Rights Council to assess their human rights records.

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Lack of Resources

The reason why some countries violate human rights due to a lack of resources to adequately protect and enforce those rights.

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National Security

The reason why some countries violate human rights to maintain national security, often by using security concerns as justification for human rights abuses.

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Staying in Power

The reason why some countries violate human rights in order to stay in power or gain control, often through authoritarian tactics or suppression of dissent.

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Conflicting Human Rights

A situation where two or more human rights principles conflict, requiring weighing the importance of each right in a particular situation.

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ICC Deterrence

The ability of the ICC to deter some human rights abuses, particularly by states and rebel groups, by the threat of prosecution.

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ICC Prolonging Conflicts

The potential downside of ICC intervention, where its involvement can prolong conflicts as leaders might continue fighting to avoid prosecution.

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Evolving Human Rights Law

The ongoing development and implementation of human rights law as a system to protect and improve human rights globally.

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What are human rights?

Basic rights that belong to every person simply because they are human. They are not dependent on nationality or government, and every human is entitled to them, regardless of background.

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What is the Universal Declaration of Human Rights (UDHR)?

A document created in 1948 by the UN to establish global human rights standards. It's the most authoritative document on human rights worldwide.

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What are the ICCPR and ICESCR?

Two important treaties that came out of the UDHR. The ICCPR focuses on negative rights (freedom from interference) while the ICESCR focuses on positive rights (rights to certain things like healthcare, education).

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Why are human rights controversial?

States have different views on human rights, shaped by their political systems, cultures, and traditions. This can lead to disagreements and controversies. For example, there is debate about the use of torture in extreme cases, like terrorism.

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How do institutions influence economic development?

Institutions shape economic policy and resource distribution. For example, equal wealth distribution (small-scale farming) in North America led to democratic institutions and rapid development, while wealth inequality (large plantations) in South America fostered undemocratic institutions and slower development.

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What are the main criticisms of international institutions like the IMF and WTO?

Critics argue that international institutions like the IMF and WTO favor rich countries by protecting their trade interests and imposing policies that harm LDCs. For example, the WTO often ignores LDCs' calls for agricultural trade liberalization.

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Why did Import-Substitution Industrialization (ISI) decline in the 1970s?

Import-Substitution Industrialization (ISI) began to lose support in the 1970s because ISI industries were inefficient and produced low-quality goods. Additionally, protected markets hurt farmers and led to trade imbalances and rising foreign debt.

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How did Export-Oriented Industrialization (EOI) contribute to the success of East Asian economies?

Export-Oriented Industrialization (EOI) encouraged manufacturing for foreign markets through tax breaks, low-cost loans, and weak currencies. Countries like South Korea industrialized rapidly by exporting high-quality goods like steel and automobiles.

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What is the Washington Consensus, and what are some of its associated policies?

The Washington Consensus promoted market-oriented policies to integrate countries into the global economy. Two associated policies were trade liberalization (removal of trade barriers) and privatization of state-owned enterprises.

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What is Engel's Law, and how does it impact trade between rich and poor countries?

Engel's Law states that as incomes rise, people spend a smaller percentage on food. This means demand for agricultural products (main exports of LDCs) grows slower, disadvantaging poor countries in trade.

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How can political interests and corruption block economic development?

Political interests and corruption within a country can block economic development by prioritizing the interests of elite groups over public goods. For example, wealthy landowners in some LDCs oppose property rights for farmers to maintain their dominance.

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How does geography impact development?

Geography influences trade, agriculture, and disease prevalence. For example, landlocked countries face challenges in trade, while tropical countries in sub-Saharan Africa struggle more than temperate regions due to disease and poor soil. However, countries like Singapore overcame geographic challenges.

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Compare ISI and EOI strategies.

ISI focused on domestic markets, protected industries, and subsidies, while EOI focused on global markets, offered export incentives, and aimed to create competitive goods. EOI was more successful due to its focus on international competitiveness.

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How did colonialism shape development challenges?

Colonialism shaped development challenges by extracting resources, neglecting infrastructure, and drawing arbitrary borders. Example: Post-colonial African nations faced conflict and economic dependency.

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Analyze the Washington Consensus.

The Washington Consensus promoted policies like trade liberalization, privatization, and fiscal discipline. While it promoted growth in some cases, it also led to increased inequality and hurt domestic industries.

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Are international institutions biased against LDCs?

The WTO protects rich countries' agriculture through subsidies. Rich countries dominate decision-making in the IMF and World Bank, imposing harmful policies on LDCs, such as ignoring calls for agricultural trade liberalization.

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How do domestic institutions influence development (North vs. South America)?

North America had equal wealth distribution, leading to democratic institutions and economic progress. South America's unequal wealth fostered undemocratic institutions and slower progress.

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What is the 'resource curse'?

Natural resource wealth can lead to corruption, weak accountability, and lack of diversification. Examples: Nigeria (oil) and Angola.

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What are the benefits and drawbacks of globalization?

Globalization offers trade opportunities, foreign investment, and technology transfer. However, it also contributes to inequality, loss of local industries, and job displacement. Example: Winners (East Asia), losers (some African nations).

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Tragedy of the Commons

A situation where shared resources are overused and depleted because no one feels responsible for their preservation.

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Equal Pay for Equal Work

The right to be paid the same amount for the same work, regardless of gender, race, or other factors.

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Free Riders

People who benefit from a public good without contributing to its protection.

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Negative Rights

These rights are linked to freedoms from interference by the government. They focus on what the government cannot do.

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Positive Rights

These rights require the government to actively take action to ensure their realization. They focus on what the government must do.

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Developed Countries: Responsibility for Climate Change

Countries that have historically contributed the most to climate change (e.g., US and Europe) face pressure to pay for clean-up efforts.

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ICCPR

This International Bill of Rights document focuses on civil and political rights, such as freedom of speech and voting.

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Developing Countries: Demands for Climate Change Funding

Developing nations arguing that richer countries should pay for environmental damage because they were the primary contributors.

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Polluter Pays Principle

The principle that those who cause pollution should bear the costs of cleaning it up.

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ICESCR

This International Bill of Rights document focuses on economic, social, and cultural rights, such as the right to work and healthcare.

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Precautionary Principle

Acting to prevent potential harm even if there is no absolute proof of the danger.

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Reasons for Human Rights Violations

States may violate human rights for a complex mix of reasons, including lack of capacity, defending national security, or preserving their own rule.

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Sustainable Development

Balancing economic growth with environmental protection for sustained progress.

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Non-intervention

This principle emphasizes the right of states to govern themselves without undue interference from other countries.

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Paris Agreement (2016)

An international agreement that aims to limit global warming to well below 2°C, preferably to 1.5°C, compared to pre-industrial levels.

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Non-derogable Rights

These rights are fundamental and cannot be suspended under any circumstances, even during times of emergency.

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ICC's Role

The International Criminal Court (ICC) was established to prosecute individuals for serious crimes like war crimes and crimes against humanity.

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Montreal Protocol (1987)

The Montreal Protocol (1987) aimed to phase out ozone-depleting substances, leading to a significant recovery of the ozone layer.

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Kyoto Protocol (1997)

The Kyoto Protocol (1997) was the first legally binding agreement to reduce greenhouse gas emissions.

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Adaptation to Climate Change

The process of adapting to the inevitable impacts of climate change (e.g., sea-level rise).

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Mitigation of Climate Change

The process of reducing greenhouse gas emissions to limit global warming.

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Truth and Reconciliation Commissions

Truth and reconciliation commissions are a form of transitional justice that aims to uncover the truth about past injustices and promote reconciliation between victims and perpetrators.

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ICC and Prolonged Conflicts

The ICC’s involvement in conflicts can sometimes prolong them, as leaders may fear prosecution for war crimes and choose to continue fighting.

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Climate Finance

Financial support provided by wealthier countries to developing nations to assist them in their climate action efforts.

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International Institutions and Environmental Cooperation

International organizations play a crucial role in managing the global environment by setting standards, verifying compliance, and fostering cooperation.

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TANs and Apartheid

TANs used a mix of normative and economic pressure to challenge and eventually dismantle South Africa’s apartheid regime.

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Study Notes

Environmental Problems and Cooperation

  • Environmental issues are global (Air, Land, Water pollution).
  • Population growth and increased consumption are worsening the issues.
  • Most environmental concerns need international cooperation.

Tragedy of the Commons and Cooperation

  • Tragedy of the Commons: Shared resources (like air, water, forests) are overused and depleted because no one feels responsible for protecting them.
  • Collective Action Problem: Hard to get everyone to cooperate and protect public goods.
  • Difficult to reach agreements as some nations may benefit more than others.

Factors Facilitating Cooperation

  • Smaller groups: Easier to reach consensus.
  • Frequent interactions: Fosters trust and long-term cooperation.
  • Private incentives: Personal rewards for environmental protection boost cooperation (e.g., green tech).
  • Privileged groups: Key players, like wealthy nations, can lead the way and inspire others.

Conflicts in Environmental Protection

  • Developed countries have historically polluted more, and now developing countries are increasing emissions.
  • Responsibility for environmental protection is contentious.
  • Who pays for fixing historical pollution?
  • Conflicting interests between generations and economic development. -Example: Development projects vs. environmental concerns.

International Agreements and Institutions

  • Montreal Protocol (1987): Success in protecting the ozone layer.
  • Kyoto Protocol (1997): First attempt to reduce greenhouse gases.
  • Paris Agreement (2016): Aims for global warming limits (2°C, 1.5°C is preferred).
    • Commitments: Mitigation (reduce emissions), adaptation (prepare for climate impacts), and finance (rich countries provide aid to poor nations).
  • Key Principles: Polluter pays, precautionary measures, sustainable growth for future generations.
  • International Institutions provide frameworks for global cooperation.

Overall Summary

  • Environmental problems are complex and require global cooperation.
  • Collective action challenges exist, but international agreements and institutions can help.
  • Negotiations and compromises for environmental protection are essential.

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