MARKET INTEGRATION
HISTORY OF GLOBAL MARKET INTEGRATION
HISTORY OF GLOBAL MARKET INTEGRATION
HISTORY OF GLOBAL MARKET INTEGRATION
THE AGRICULTURAL REVOLUTION AND THE INDUSTRIAL REVOLUTION
The first big economic change
was the Agricultural Revolution
(Pomeranz, 2000)
Domesticate plants and
animals and shift to much
more productive than hunter -
gatherer society
Farming helped build surpluses
This led to major
developments like permanent
settlements, trade networks,
and population growth
THE AGRICULTURAL REVOLUTION AND THE INDUSTRIAL REVOLUTION
Second major economic
revolution is the Industrial
Revolution of the 1800s
With the rise of industry came
new economic tools like steam
engines, manufacturing, and
mass production
Factories popped up and
changed how work functioned
Start of wage labors and skilled
workers
THE AGRICULTURAL REVOLUTION AND THE INDUSTRIAL REVOLUTION
Every economic revolutions
comes with economic casualties
The workers in the factories who
were mainly poor women and
children-worked in dangerous
conditions for low wages
19th century industrialists also
known as barons-with more
productivity came greater
wealth, but also greater
economic inequality
19the century labor unions
began to form
THE AGRICULTURAL REVOLUTION AND THE INDUSTRIAL REVOLUTION
These organizations of
workers sought to improve
wages and working
conditions through collective
actions, strikes and
negotiations
Inspired by Marxist principles,
labor unions gave way for
minimum wage laws,
reasonable working hours,
and regulations to protect
the safety of workers
ECONOMIC MODELS: CAPITALISM AND SOCIALISM
Is a system in which all natural
resources and means of
production are privately owned
Profit maximization and
competition as the key drivers of
efficiency
Needs to outperform his
competitor if he is going to
succeed
Incentivized to be efficient by
improving the quality of product
and reducing it’s prices
ECONOMIC MODELS: CAPITALISM AND SOCIALISM
The means of production are
under collective ownership
Property is owned by the
government and allocated to
all citizen
Collective goals, expecting
everyone to work for the
common good and placing
a higher value on meeting
everyone’s basic needs than
on individual profit
THE INFORMATION REVOLUTION
Technology has reduced
the role of human labor
and shifted it from a
manufacturing-based
economy
The computers and
technologies are
beginning to replace
many jobs because of
automation or
outsourcing jobs offshore
GLOBAL CORPORATIONS
Increase in int’l trade has both
created and been supported by
international regulatory groups
like WTO, and transnational
agreement like NAFTA
Without international trade, there
would be no need for int’l
regulatory groups
Multinational and Transnational
corporations (MNCs or TNCs) also
known as global corporations
Market Integration: Financial Institutions & Economic Organizations
The Bretton Woods System
Regime (1944)
Expression of currency in terms of gold
or gold value to establish a par value
(Boughton, 2007)
Example: A 35 US dollar pegged by the
United States per ounce of gold is the
same as 175 Nicaraguan cordobas per
ounce of gold
Excahnge Rate: 5 cordobas for 1 dollar
Market Integration: Financial Institutions & Economic Organizations
World Bank and IMF were
founded after WWII
Peace advocacy after war
Economic stability of the world
IMF serves as a lender or a
last resort for countries
needed financial assistance
World Bank: long term
approach
Market Integration: Financial Institutions & Economic Organizations
Organization for Economic Cooperaction and
Development
OECD with 35 member states
Highly influential
Organization of Petroleum Exporting Countries
Comprised of Saudi Arabia, Iraq, Kuwait, Iran
and Venezuela
Goal: to imcrease price of oil to keep with
inflation
New members: UAE, Algeria, Libya, Qatar,
Nigeria and Indonesia
European Union
Euro as basic currency
Euro increased the prices in Eurozones resulted
in depressed economic growth rate
Market Integration: Financial Institutions & Economic Organizations
FTAs with other nations which determine
the tariffs, duties, and subsidies the
countries can impose on their imports and
exports
Independent multilateral organization that
become responsible for trade in services ,
non-tariff-related barriers to trade and
other broader areas of trade liberalization
GLOBAL INTERSTATE SYSTEM
The origin of the modern nation‐state is traced to the
Peace of Westphalia and its treaties, which led to the
notion that nation‐states are autonomous
With globalization, the nation‐state faces innumerable
challenges, leading to a significant loss of control over
economic flows, transnational organizations, and
sovereignty
Although the role of the nation‐state has declined, it is still
an important political structure.
Emerged as an alternative, or at least a supplement, to the
inter‐state system in addressing various global problem
INSTITUTIONS THAT GOVERN INT’L RELATIONS
CONTEMPORARY GLOBAL GOVERNANCE
Governance: Formal and informal rules and institutions that elicit compliance toward
collective goals whereby rules are created, compliance is elicited, and goods are
provided in pursuit of collective goals” (Hale and Held 2011: 12)
There are at least three new forms of global or transnational governance:
1. Governance through brings together v arious public and priv ate actors into public policy
multi stakeholder networks and partnerships
initiativ es It usually inv olves at least one state actor and v arious international
institutions, as well as INGOS and priv ate sector organizations of v arious
sorts
Multistakeholder initiativ es prov ide governance in the form of service
provision (e.g. the Global Fund to Fight AIDS, Tuberculosis, and Malaria),
2. Global gov ernance MNCs (or other actors) agree to a set of social and/or env ironmental
inv olves the creation of practices that go beyond the stated or enforced set of laws in the area
v oluntary regulations in which they operate
the standards are developed, monitored, and enforced through an
extensiv e network of international organizations
3. Global gov ernance The commission's independent inv estigation process can establish a
has been accorded to factual record of v iolations that can put pressure on states to adhere to
courts and lawyers, but their national laws
their authority is not These processes have led to some improvements, but they are limited in
based in international scope.
law
