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POSC 126/SPRING 2017 PROF.

JANA GRITTERSOVA

FINAL EXAMINATION: IMPORTANT TERMS, CONCEPTS,


AND QUESTIONS FOR DISCUSSION

Discuss with specific reference to the most relevant readings you have encountered in this course.

I. IDENTIFICATION QUESTIONS
This is a list of terms and concepts that may appear on the identification portion of the exam. You
should be able to define ID and discuss its importance for the study of international political
economy. Answers should be 1-2 paragraphs in length.

PART I: THEORETICAL PERSPECTIVES


Distributional vs. Welfare Consequences
Collective action problem
Group size paradox (Olson)
Transaction costs
Public goods
Developmental vs. predatory institutions (Acemoglu)
Liberalism/Marxism/Mercantilism

PART II: INTERNATIONAL TRADE AND PRODUCTION


Absolute Advantage
Comparative Advantage
Tariffs/Quotas/Non-tariff barriers
Hegemonic stability theory
General Agreement on Tariffs and Trade (GATT)
World Trade Organization (WTO)
Most Favored-Nation Treatment
The Doha Round
Preferential/Regional Trading Agreements (Customs Union & Free-Trade Area)
European Union (EU)
North American Free Trade Area (NAFTA)
Trade creation & trade diversion
Factor endowments/Factor intensity/Factor mobility
Heckscher-Ohlin Model
Stolper Samuelson Theorem (Factor Price Equalization)
Ricardo-Viner Model
Strategic trade theory/First-mover advantage
Foreign Direct Investment (FDI)
Multinational Corporation (MNC)
Product cycle theory
Location motive of MNCs
Internalization motive of MNCs
Vertical integration/Horizontal integration
Obsolescing bargain
Offshoring vs. Outsourcing

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POSC 126/SPRING 2017 PROF. JANA GRITTERSOVA

PART III: MONEY AND FINANCE


Foreign exchange market
Fixed vs. Flexible exchange rate regime
Exchange rate depreciation vs. appreciation
Bretton Woods system

PART IV: ECONOMIC DEVELOPMENT


Terms of trade
Import-Substitution Industrialization (ISI)
Export-Oriented Industrialization
Industrial Policy
Structuralism (Singer-Prebish theory)
Engels Law
East Asian model of development (Developmental State)
BRICs
Debt-service capacity
Boom-and-boost cycle
International Monetary Fund (IMF)
IMF conditionality and structural adjustment programs
Petrodollar recycling
The Council for Mutual Economic Assistance (CMEA)
Planned (command) economies
Washington consensus
Shock therapy (big bang) approach vs. Gradualism
Privatization and its methods
Law of one price & Arbitrage
Race to the bottom

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POSC 126/SPRING 2017 PROF. JANA GRITTERSOVA

II. QUESTIONS FOR DISCUSSION

1. Why are multinational corporations (MNCs) created and why do they undertake foreign
direct investments (FDI)? Describe, explain and give examples of the differences between
horizontal and vertical integration of the activities of MNCs.
2. What domestic and international factors affect bargaining between MNCs and host
countries? Explain and compare the unique and competing interests of host and home
countries of MNCs as well as those of MNCs themselves.
3. What is the impact of MNCs on home and host countries? Do you think that the effect has
on the average been more positive or negative?
4. Explain the importance of terms of trade in Singer-Prebisch theory. Explain the costs and
benefits of the two-stage strategy of import substitution industrialization (ISI) in developing
countries. Which groups benefited and which were harmed by this set of policies?
5. Why was the East Asian export oriented strategy so successful for the countries that adopted
it? How did their policies differ from other developing countries? How important was the
role of the state in accounting for East Asias success? How would you compare the
effectiveness of ISI and export-oriented industrialization?
6. What is at stake in the debate about the relationship between trade and development? Do
you think there exists a single proper development strategy for all countries?
7. Describe and explain why and how debt service ratios rendered Latin American countries
vulnerable to international economic shocks in the 1980s. Explain how and why domestic
politics in developing countries caused most governments to delay implementation of
stabilization and structural adjustment programs.
8. What were the causes and consequences of the Asian financial crises of the late 1990s? How
did the 1980s Latin American debt crises differ from the 1990s Asian financial crises?
9. What were the main characteristics, successes, and flaws of a communist economic system
and why did it fail? Compare and contrast the two visions of economic transition after the
collapse of communismshock therapy and gradualismand their implications for the
variation in economic performance among the transition countries of Eastern Europe. What
has been the role of interest groups, political institutions, and international organizations in
post-communist transitions?
10. What is the Washington Consensus? What approach to economic reforms and development
do you think a post-Washington consensus should promote? What are the costs and benefits
of the Washington Consensus model of development policy versus the Beijing
Consensus model?
11. How is globalization different today than it was in the nineteenth century? What factors
might explain these differences?
12. Explain and discuss some of the claims and counter claims about the contemporary effects
of globalization in the world economy. How does globalization affect: a) the nature and
function of states; b) poverty and inequality; c) wages and working conditions of developing-
world workers?

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