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• Economic globalization


  A process making the world economy an 'organic system' by extending transnational economic processes and economic relations to more and more countries and by deepening the economic interdependencies among them
• Post-World War II economic boom

  • Increased productivity
  • Government policy
  • Growth of energy technology
  • Struggling European economy that needed rebuilding
• Increased Productivity


  Attributed to factors like Ford's assembly line
• Government Policy


  Low taxes, little government interference in business, and high tariffs on imports
• Growth of Energy Technology

  Oil (gasoline) and electricity
• Struggling European Economy


  Europe needed to rebuild after the war, which created economic opportunities for other countries
• Bretton Woods Conference


  A gathering of delegates from 44 allied nations that met in Bretton Woods, New Hampshire from July 1 to 22, 1944
• Purpose of Bretton Woods Conference


  To establish a new set of rules for the international monetary system after World War II
• The inter-war financial system had been chaotic, resulting in the collapse of the gold standard, the Great Depression, and the rise of protectionism
• Bretton Woods Agreement


  Replaced the gold standard with the U.S. dollar as the global reserve currency, making the U.S. the dominant power in the world economy

  
• IMF


  Created at the Bretton Woods Conference to monitor the system of pegged or fixed exchange rates
• World Bank


  Created at the Bretton Woods Conference to promote global monetary cooperation and international financial stability
• The Bretton Woods Agreement allowed countries to redeem their currency for U.S. dollars, not gold

  
• The United States held three-fourths of the world's supply of gold, so the dollar was chosen as the global reserve currency
• Role of IMF


  Provide short-term loans to prevent devaluation and retain the state's fixed exchange rate in instances of temporary balance of payment deficits
• The IMF's role changed when the fixed-exchange-rate system collapsed and was replaced by floating exchange rates in 1971
• IMF Quota System


  The quota of states reflects their relative position in the global economy and determines the voting power of states in IMF decisions
• Global Financial Crisis of 2007-2009


  Prompted the IMF to undergo a reform process consisting of resource expansion and increase in quota and voting power of emerging economies
• World Bank Group Institutions

  • International Bank for Reconstruction and Development (IBRD)
  • International Development Association (IDA)
  • International Finance Corporation (IFC)
  • Multilateral Investment Guarantee Agency (MIGA)
  • International Centre for Settlement of Investment Disputes (ICSID)
• IBRD


  Provides financing, policy advice, and technical assistance to governments of middle-income and creditworthy low-income countries
• IDA


  Focuses on the world's poorest countries, providing zero- to low-interest loans and grants
• IFC


  Encourages private sector investment in developing countries
• MIGA


  Promotes foreign direct investment in developing countries by providing political risk insurance (guarantees) to investors
• ICSID


  Provides facilities for the conciliation and arbitration of investment disputes between foreign investors and developing country governments
• The World Bank's focus on reducing extreme poverty while addressing global capital market imperfections remains a secondary importance
• GATT


  Created to avoid trade wars by raising protectionist barriers as witnessed during the interwar period
• The U.S. refused to sign the Havana Charter that would create an International Trade Organization (ITO) at par with the IMF and GATT, leading to the creation of the informal GATT
• GATT was incapable of providing a strong and efficient system for dispute settlement, it was eventually superseded by the more formal World Trade Organization in 1995
• World Trade Organization (WTO)


  Became one of the most legalized international institutions in the world, with its binding and automatic dispute settlement mechanism
• Demands of developing countries to fully implement the Uruguay agreement particularly in the agriculture sector, and demands of the US and EU focusing on matters such as labor, environment, and investment concerns became irreconcilable matters
• Six Main Bodies of the United Nations

  • General Assembly
  • Security Council
  • Economic and Social Council
  • Trusteeship Council
  • International Court of Justice
  • UN Secretariat
• General Assembly


  The main deliberative body of the UN, serving as a forum for discussions and recommendations on a broad range of issues
• Security Council


  Holds primary responsibility for maintaining international peace and security, with the power to authorize peacekeeping operations, impose sanctions, and authorize the use of force
• Economic and Social Council


  Focuses on promoting international economic and social cooperation and development, coordinating the work of various UN agencies
• Trusteeship Council


  Established after World War II to oversee the administration of Trust Territories, currently inactive
• International Court of Justice

  The principal judicial organ of the UN, settling legal disputes between states
• UN Secretariat


  Provides administrative support to all other UN organs and carries out programs established by member states