Stances on Global Economic Integration

• What can participation in globalization help developing countries achieve?

  Utilize comparative advantages and advanced technologies
• What are the three broad responses to economic globalization?

  1. Protectionism
  2. Fair Trade
  3. Helping the "bottom billion"
• What is protectionism?

  A policy of systematic government intervention
• What is the objective of protectionism?

  Encouraging domestic production
• What are two ways to protect domestic production?

  Imposing tariffs and export subsidies
• What is a consequence of protectionism on industries?

  Protected industries become increasingly inefficient
• How does protectionism affect exports?

  It raises production costs, reducing competitiveness
• What is a negative effect of protectionism on innovation?

  It reduces motivation for innovation in protected industries
• How does protectionism impact agriculture in developing nations?

  It adversely affects agriculture compared to manufacturing
• Who suffers more from protectionism, the protecting nation or the victims?

  The protecting nation tends to suffer more
• Why do developed nations often seek trade protection?

  Fear of inexpensive imports destroying industries
• What do less developed countries complain about regarding trade barriers?

  Continuing trade barriers in developed nations
• What is fair trade concerned with?

  Social, economic, and environmental well-being
• What is the focus of the "bottom billion" concept?

  Economic inequality between North and South
• How is fair trade defined?

  Concern for marginalized small producers
• What are the key concerns of fair trade?

  • Direct relationships between producers and consumers
  • Establishing just prices through negotiation
  • Protecting producers from price fluctuations
  • Providing work for economically disadvantaged individuals
  • Protecting workers' rights and ensuring safe work conditions
  • Engaging in environmentally sound practices
  • Educating consumers to pressure producers
• Where do most people in the bottom billion live?

  Primarily in Africa
• What are the four "traps" that account for the impoverishment of the bottom billion?

  Conflict, natural resources, landlocked, bad governance
• What is the income level of the bottom billion compared to other developing countries?

  About a fifth of those in other developing countries
• What characterizes the conflict trap?

  Continuing civil wars and violent coups
• How does the natural resources trap limit economic development?

  Excessive dependence on natural resources
• What is a consequence of being landlocked with bad neighbors?

  High transportation costs and export difficulties
• How can bad governance affect an economy?

  It can inhibit growth and destroy the economy
• What has economic globalization done to the gap between North and South?

  Expanded rather than reduced the gap
• What is a pro of economic globalization for employees?

  Higher pay compared to other workers
• What is a con of economic globalization regarding jobs?

  Outsourcing jobs to less developed countries
• How do transnational corporations affect smaller governments?

  They become too large for smaller governments
• What cultural impact does economic globalization have?

  Loss of cultural identity due to western products