Chapter 17
Making the World a Better Place
Review• Concepts to Review– Corporate social responsibility, global civil
society organizations, inequality, WTO, cyclical volatility, environmental regulation, 2008 financial crisis
• Key Words– Poverty alleviation; alternative forms of
global economic system; the G20; global governance systems; the Bretton Woods agreement
Recap of Themes• Geographic rescaling of economic activities• Cyclical volatility• Changes in the relative growth rates of different
parts of the world
• Increased interdependence: a source of vulnerability
• TNCs and states: shaping of the global economic map.
• Impossibility of separating the geoeconomic from the geopolitical
• Three big geopolitical issues:– US shift towards pre-emptive action post-9/11– Rise of China and East Asia generally– Failed, dysfunctional or inadequate states
Corporate Social Responsibility• Global civil society organizations
– Vary from the anti-capitalist to the national– Often have contradictory agendas– Force people to engage with the unevenness of globalization
• Corporate social responsibility– Milton Friedman: companies only exist to maximize shareholder
value– Alternative: stakeholder capitalism– Define: inactive, reactive, active and proactive approaches– Participation may be altruistic or through self-interest
• Codes of conduct– Four major types:
• Devised by TNCs• Drawn up by coalitions of interest groups• Formulated by TNCs in association with stakeholders • Established by NGOs
Global Governance• Finance
– Bretton Woods agreement1944: • International Monetary Fund (IMF) and World Bank created
– Since 1970s, agreement undermined, leading to a market-led rather than state-led system
– 1997: Asian crisis, calls for a reformed financial architecture– 2008: need for a new financial architecture for everyone made plain– Most important development is the emergence of the G20
• International trade– Regulated since WWII by the GATT and since 1995 by the WTO– WTO takes rule-oriented approach to multilateral trade cooperation– Fundamental basis is non-discrimination, based on
• Most-favoured nation principle• National treatment rule
– The Doha development round (2001—)
• Environmental regulation– 1992: Framework Convention on Climate Change (FCCC)– 1997: Kyoto Protocol– Problem: developing countries adopting measures that could prevent their
future economic development
Future Trends?• Alternative economies
– Hyper-globalizers: argue for more openness of markets– Anti-globalizers: argue for the opposite– Environmentalists: need to take environment into account– Development of ‘community economies’ and micro-finance
• Openness versus poverty alleviation– IMF and World Bank encourage openness as cure for all ills– This only works if playing field is level– Opening up a developing economy will also lead to disaster
• Hence need means in place to develop robust internal structures
– UN Millennium Development Declaration: to alleviate extreme poverty
– Aid programmes failing to meet needs– Prosperity isn’t just about money: it can also be about
happiness, well-being
Top Related