International Institutions

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International Organisations and Globalisation

Various international political and economic organisations are very important in the advancement of globalisation.

Bretton Woods institutions

Intergovernmental organisations (IGOs) like the World Trade Organisation (WTO), the International Monetary Fund (IMF) and the World Bank promote free trade policies to encourage FDI and to accelerate globalisation.
Since World War 2, these organisations have worked together to remove tariffs and quotas on goods that act as barriers to free trade.

Bretton Woods institutions cont.

As more developing and emerging countries join the organisations, their actions to encourage free trade arguably continue to accelerate globalisation. China joined the World Trade Organisation in 2011.
These IGOs are collectively referred to as the ‘Bretton Woods institutions’ after the place in America where they are established.

BRIC institutions

BRIC refers to Brazil, Russia, India and China.
New alternatives or rivals to the Bretton Woods institutions are rising as the BRICs gain global influence and set up their own organisations - such as the China Development Bank.
In 2015, the BRIC nations set up the New Development Bank to rival the World Bank.

BRIC institutions cont.

By 2017, this New Development Bank had given loans of $1.5 billion dollars to member countries. Most of these loans went on developing renewable energy in these countries.
China is particularly influential in Africa, where Chinese money funds lots of infrastructure projects in the likes of Kenya.

Intergovernmental Organisations (IGOs)

Lots of IGOs founded by the USA have a key influence on the global economic system. The World Bank and IMF are called Bretton Woods institutions (this is where they were established in 1944).

The IMF

The IMF was founded in 1944. It aims to help stabilise global currencies and it provides loans to developing countries to reduce poverty.
In return for a loan, a country must enforce a Structural Adjustment Program (SAP).
A SAP ensures that capitalism is promoted within the country and it can require a country to impose cuts to public services and privatise many state industries.
- Many countries (particularly those in Africa) can see the IMF as a lender of last resort.
- Many people also argue that SAPs and loans from the IMF result in the worsening of poverty for many developing countries as they can then become trapped in a cycle of debt (paying back debt & interest).

The IMF cont.

Although the IMF is a global IGO, 8 countries control 47% of the total votes between them and these are the global superpowers.
So, through their control of the IMF, the superpowers have significant influence over the global economic system.
Recently, there have been reports of countries being loaned money from China in order to meet the conditions needed for further loans from the IMF.
- This is an example of China’s growing influence as a superpower and an alternative to the IMF.

The World Bank

The World Bank was founded in 1944.
Similarly to the IMF, the World Bank aims to support capitalism.
It also provides loans to developing countries and provides finance following natural disasters and humanitarian emergencies.
Whilst aiming to reduce poverty, the World Bank also wants to achieve sustainability.

The World Bank cont.

Sustainability is the ability to meet the needs of the current generation without compromising the ability of future generations to meet their own needs.
The World Bank is currently working towards two goals for the world to achieve by 2030:
- To end extreme poverty by decreasing the percentage of people living on less than $1.90 a day to no more than 3%.
- To promote shared prosperity by ensuring that the income of the bottom 40% in every country increases.

1Microeconomics

1.1Competitive Markets: Demand & Suply

1.1.1Markets & Demand

1.1.2Diminishing Marginal Returns

1.1.3Supply

1.1.4Market Equilibrium

1.1.5Price Mechanism

1.1.6Consumer & Producer Surplus

1.1.7IB Multiple Choice - Demand

1.1.8IB Multiple Choice - Supply

1.2Elasticity

1.2.1Elasticities of Demand

1.2.2Factors Affecting Price Elasticity of Demand

1.2.3Elasticity of Supply

1.2.4Price Elasticity of Supply

1.2.5IB Multiple Choice - Price Elasticity of Demand

1.2.6IB Multiple Choice - Price Elasticity of Supply

1.2.7IB Multiple Choice - Other Elasticities

1.3Government Intervention

1.3.1Indirect Taxes & Subsidies

1.3.2Application Question - Taxing Prices or Quantities

1.3.3Subsidies & Price Controls

1.3.4Deadweight Loss & Government Intervention

1.3.5Elasticity & Tax Incidence

1.3.6IB Multiple Choice - Government Intervention

1.4Market Failure

1.4.1Types of Market Failure

1.4.2Introduction to Externalities

1.4.3Negative Externalities

1.4.4Policy for Negative Externalities

1.4.5Positive Externalities

1.4.6The Deadweight Welfare Loss of Externalities

1.4.7Case Study - The Externalities of Education

1.4.8Public Goods & the Free-Rider Problem

1.4.9Asymmetric Information

1.4.10End of Topic Test - Market Failure

1.4.11Application Questions - Market Failure

1.5HL: Theory of the Firm & Market Structures

1.5.1Theory of the Firm & Market Structures

2Macroeconomics

2.1The Level of Overall Economic Activity

2.1.1The Circular Flow of Income

2.1.2Defining GDP

2.1.3Limitations of GDP

2.1.4IB Multiple Choice - Economic Indicators

2.1.5Business Cycles

2.1.6Output Gaps

2.2Aggregate Demand & Aggregate Supply

2.2.1The Aggregate Demand Curve

2.2.2Components of Aggregate Demand

2.2.3Shape of the Aggregate Demand Curve

2.2.4Shifts in Aggregate Demand

2.2.5IB Multiple Choice - Aggregate Demand

2.2.6Short & Long-Run Aggregate Supply

2.2.7Alternative Models of LRAS

2.2.8Equilibrium in the AD-AS Model

2.2.9Output Gaps & the AD-AS Model

2.3Macroeconomic Objectives

2.3.1Introduction to Unemployment

2.3.2Limitations of Unemployment

2.3.3Types of Unemployment

2.3.4Causes & Impact of Unemployment

2.3.5Defining Inflation

2.3.6Measuring Inflation

2.3.7Use of Index Numbers

2.3.8The Consumer Price Index

2.3.9Consequences of Inflation

2.3.10Causes of Inflation

2.3.11Inflation & Unemployment Tradeoff

2.3.12The Short-Run Phillips Curve

2.3.13The Long-Run Phillips Curve

2.4Economic Growth, Poverty & Inequality

2.4.1Measuring Economic Growth

2.4.2Determinants of Productivity

2.4.3Economic Growth & Productivity

2.4.4Absolute & Relative Poverty

2.4.5Inequality

2.4.6Inequality 2

2.4.7Lorenz Curve

2.4.8Government Policy on Poverty

2.4.9End of Topic Test - Poverty & Inequality

2.4.10Application - Inequality & Poverty

2.5Fiscal Policy

2.5.1Introduction to Fiscal Policy

2.5.2Fiscal Policy and AD-AS Model

2.5.3Fiscal Policy Lags

2.5.4Automatic Stabilizers

2.5.5IB Multiple Choice - Fiscal Policy

2.6Monetary Policy

2.6.1Objectives of Monetary Policy

2.6.2Monetary Policy Implementation

2.6.3Monetary Policy & AD-AS Model

2.6.4Monetary Policy Lags & Pitfalls

2.7Supply-Side Policies

2.7.1Supply-Side Policies

2.7.2Supply-Side Policies 2

3The Global Economy

3.1International Trade

3.1.1Globalisation

3.1.2Globalisation for LEDCs

3.1.3Globalisation for MEDCs

3.1.4Comparative Advantage & Trade

3.1.5Protectionism

3.1.6Arguments for Protectionism

3.1.7Arguments Against Protectionism

3.1.8End of Topic Test - Globalisation & Trade

3.1.9Case Study - Globalisation & Trade

3.2Exchange Rates

3.2.1Floating Exchange Rates

3.2.2Fixed Exchange Rate

3.2.3Effect of a Stronger & Weaker Dollar

3.3The Balance of Payments

3.3.1Balance of Payments

3.3.2Balance of Payments 2

3.3.3FDI & Reducing a BoP Deficit

3.4Economic Integration

3.4.1Customs Unions & WTO

3.4.2Merged Currency

3.5Terms of Trade

3.5.1Absolute & Comparative Advantage

3.5.2Gains from Trade

3.5.3Terms of Trade

3.5.4IB Multiple Choice - Comparative Advantage & Trade

3.6Economic Development

3.6.1Factors Influencing Growth & Development

3.6.2International Institutions

3.6.3Measures of Development

3.6.4Barriers to Development

3.6.5Case Study - The Bottom Billion

3.6.6End of Topic Test - Emerging & Developing

3.7The Role of Domestic & International Factors

3.7.1Interventionist Strategies

3.7.2Development Strategies

3.7.3Development Promotion Policies

3.7.4End of Topic Test - Growth & Global Development

3.7.5Application Questions -Growth & Global Development

3.8The Role of International Trade

3.8.1International Institutions

3.8.2End of Topic Test - Globalisation & Trade

3.9The Role of Foreign Aid

3.9.1Aid

3.9.2Limitations of Aid

3.9.3Support for Aid

3.9.4Application Questions - Developing Countries

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