The Washington consensus and the role of international organizations.

A recommended to developed and developing countries economic policy to support them in crisis. It includes: minimal budget deficit, concentration on healthcare and education, lower tax rates (anti-cyclical economic policy), market liberalization, lower interests, free exchange rate (no governmental influence), Privatization, economy deregulation (in US – Greenspan and then Bernake), ownership rights protection.

Employ in-build market regulators (transfers to unemployed) as well as wise fiscal and monetary policies.

Possible problems: governmental interference is absolutely necessary (see example of Mortgage markets turmoil 2008). Very often deregulation may give too much freedom, lead to creation of bubbles and other dangerous problems.

International organizations – the best way to describe is to say about Ireland and their banking system. Several years ago national banks of Ireland expanded outside the country. When the system failed, the country and tax-players bared the consequences. Profits are privatized, losses are nationalized.

81. The role of state institution-building in economic development.

The core purpose of the state is protection against predators, both external and internal, especially of weak, vulnerable or unfortunate people, to secure the rights and freedoms of individual citizens.

Establishment and control of monetary, legislative and active systems. Stabilization and Growth.

It deals with the possibility of escaping from the control of a given jurisdiction, by emigration, capital flight or some form of market exchange

In constantly changing conditions, legislators never forget the norms of morality, or constitutional provisions, or the common good. State has a full knowledge of the law and after careful consideration of circumstances, and the courts must administer justice impartially and without being influenced by favoritism or pressure.

State is needed when this form of ownership allows to utilize resources in a more effective way.

82. Regionalism versus globalization and the European Union enlargement.

The PROS of Globalization: 1) Now there is a worldwide market for the companies and for the people there is more access to products of different countries. 2) There is a steady cash flow into the developing countries, which gradually decrease the dollar difference. 3) Due to the presence of a worldwide market, there is an increase in the production sector and there are lots of options for the companies now. 4) Power is merging and decisions that are being taken, are actually beneficial for people allover the world. 5) There is more influx of information between two countries, which do not have anything in common between them. 5) There is cultural intermingling and each other is trying to know about the other’s cultural preferences and in the process of doing so; 6) Since we share financial interests, corporate and governments are trying to sort out ecological problems for each other. 7) Socially we have become more open and tolerant towards each other and they who live in the other part of the world are not aliens as we always thought. We are celebrating Valentine’s Day, scraping on Orkut, watching the Idol series, Fear factor, the Indian version Big Brother. 8) There is a lot of technological development that we have undergone over the years.

The CONS of Globalization: 1) It is true that Europeans are losing jobs and that is posing a problem for them since the companies are outsourcing work to the Asian; 2) There is immense pressure on the employed Europeans who are always under the threat of the business being outsourced. 3) Corporates are building up units in other countries equally well equipped as they have done at their own country, thus transferring the quality to other countries. 4) Communicable diseases and social degeneration. 5) There is also a threat of corporates ruling the world because there is a lot of power –a sophisticated form of colonization.

Date: 2015-02-03; view: 734