World-Economy and Global Dynamics Quiz

Global Economic Structures

• Distinction exists between the peripheral areas and the external arena of the world-economy, where the external arena can become peripheral over time.
• Core states can shift to semi-peripheral status, while semi-peripheral areas can descend to peripheral status depending on global dynamics.

Economic Globalization

• Ongoing debates persist on whether economic globalization fosters unity or division globally.
• Proponents argue that globalization promotes universal economic growth and reduces poverty by integrating poorer nations into the world market.
• Economic globalization enables the worldwide distribution of raw materials and decreases poverty through mutual dependence between developing and developed nations.

The Cold War and Economic Theories

• During the Cold War, two main theories addressing global economic inequality emerged: modernization theory and structuralism.
• Modernization theory posits that economic growth is achievable via integration into the global capitalist market, especially in Western nations.
• Structuralism argues that the capitalist system's structure perpetuates inequality, hindering the development of poorer economies through exploitation.

Dependency and World Systems Theory

• Dependency theory suggests that resources flow from underdeveloped (peripheral) countries to wealthy (core) countries, resulting in one-directional capital flow and exploitation.
• World systems theory, proposed by Immanuel Wallerstein, examines historical economic development, focusing on capitalism's role in creating wage disparities and inequality among nations.

Economic Interdependence

• Economic globalization fosters interdependence among countries through the trade of goods, services, and capital.
• This interconnectedness has transitioned from political and military domination (empires) to economic systems that drive globalization.

Capitalism and Poverty

• Recent discussions indicate that exclusion or malpractice within the capitalist framework may primarily cause poverty, rather than mere dependence on global systems.

Actors of Globalization

• Principal actors include multinational corporations (MNCs), non-governmental organizations (NGOs), intergovernmental organizations (IGOs), and state governments.
• Governments play a mediating role in globalization, acting as "midwives" and overseeing national economies amidst global influences.

Global Economic Inequality

• Despite economic globalization promoting wealth creation, it also correlates with increasing inequality across nations, affecting distribution within countries.
• Strong political institutions, inclusive systems, and democratic governance are essential for fostering innovation and economic growth.

Transfer Pricing and Corporate Practices

• Transfer pricing illustrates corporate exploitation where companies report profits through overseas subsidiaries to minimize tax burdens, demonstrated by the case of barbasco in Mexico.
• Nationalization efforts to control resources and set fair pricing emerged in response to exploitation by multinational corporations.

Cultural and Economic Dynamics

• The modern world-economy reflects inequality, influenced by cultural homogenization and the pursuit of local identities within an interconnected global landscape.

Test your understanding of the concepts surrounding world-economies, peripheries, and core states. This quiz will explore the relationships between developed and emerging countries and how their positions can shift over time. Prepare to engage with key economic theories and models!