MN216: The Global Economy 2009/2010
Lecturer
Dr. Diego Vazquez
E-mail: D.A.Vazquez@rhul.ac.uk
Workshops:
Dr Diego Vazquez
Brief Outline and Aims of the Course
The notion of ‘globalization’ is one of the most powerful ideas in the world today,
informing debates on politics, economics, development and society. However, this debate
is highly polarized and there is little consensus, even on what we mean by globalization
and for how long it has been in existence (if at all). This course aims not to provide a
definitive definition but instead to approach the subject by exploring the growth and
development of the international or global economy during the ‘long’ twentieth-century –
that is from the late nineteenth-century to the present. This historical perspective allows
us a more realistic view on many of the ‘myths’ and arguments surrounding
globalization. Thus, the course will provide an overview of the growth and development
of the global economy during the twentieth-century. In order to develop an understanding
of these processes the course examine the forces shaping the global economy and the
institutions to which it has given rise, from the World Trade Organization to the
multinational enterprise, Understanding will be further aided by the introduction of
relevant theoretical perspectives (economic, historical, management, geopolitical).
Attention will be given to the role of Foreign Direct Investment as a driving force in the
integration of developing countries into the globalisation process, although the
consequences of globalisation in relation to the environment, social inequalities and
poverty will be also examined and other measures of welfare studied. At the end of the
course, students should be in a position to appreciate the genuine magnitude and
significance of global economic forces and processes for national economies, industries
and firms.
Learning Outcomes
By the end of the course you should be able to:





Outline changes in the structure of the global economy during the twentieth
century, including changes in economic leadership and patterns of international
and regional economic integration
Assess the Challenges and Opportunities arising from Globalisation
Situate the growth and development of the global economy in the twentieth
century in historical perspective
Demonstrate knowledge of changes in global trade and investment patterns in the
twentieth-century
Explain the evolution, role and influence of key institutions of the global
economy (including the International Monetary Fund, The World Bank, The
World Trade Organization and regional organizations such as the European
Union)




Trace and explain the growth, development and role of the Multinational
Enterprises during the twentieth-century
Explain the origins and influence of the period of ‘crisis’ that seem sometimes to
engulf the international economy
Evaluate the impact of Globalisation on developing countries and explain NorthSouth flows of Labour, Capital and Knowledge
Assess competing claims for and against the existence of ‘globalization’
This half-unit course is taught in the Autumn Term. There will be ten lectures and eight
workshops. The lectures will introduce core themes, data and materials. Seminars, based
on set readings will provide an opportunity to explore in greater depth the primary themes
and debates, often by focusing on relevant case-studies. It is expected that students will
complete the set readings before each workshop and will be ready and prepared to
contribute fully to the discussion.
Lecture Mondays, 12.00–13.00
Workshops Mondays (To be confirmed)
A 14.00-15, B 15.00-16.00, C 16.00-17.00. D 17.00-18.00, E 18.00-19.00
Assessment
Assessment is by one course work essay (30%) and a two-hour written examination
(70%). The exam paper will be unseen. Advice on exam preparation will be given in an
exam revision lecture on November 23. The questions for the course work essay are
given below. Please aim for approximately 3,000 words. Advice on essay preparation and
writing will be given in the workshops. You can hand in your essay early but the absolute
deadline is 9th of December 2009. You should hand in ONE copy of essay to the
Management School Reception by 12 noon 9th December 2009 at the latest. Full
regulations and guidance on essay preparation and submission are given in the School of
Management Student handbook 2008/2010. Each essay should be stapled in the top lefthand corner and any binding should be as simple as possible. You are strongly advised
to keep a copy of your essay.
Essay Questions
Answer one of the following:
1.
Economic Globalization, Myth or Reality? Discuss and analyse to what extent
economic globalization is likely to be hindered by the consequences of thefinancial crisis experienced by the world leading economies in 2008?
2. Discuss, with examples, continuities and discontinuities in FDI patterns and
factors affecting foreign investment since 1850.
3. Mount a case to support the continuity of Breton Woods Institutions. Assess the
criticisms made to these institutions and explain how they can be addressed.
4. Can national sovereignty survive globalization?. Do all nations experience
globalization in the same way? Discuss with examples.
5. Critically evaluate the opportunities for Foreign Direct Investment (FDI) by a
Mining or Oil Multinational Enterprise. Compare and contrast opportunities for
investment in two countries selected from the following groups : Group A: USA,
Canada, Australia, New Zealand, EU members -excluding East European
Countries-, Norway, Sweden, Denmark, Iceland, Japan, , Group B: Brazil, Russia,
India, China, South Korea, Argentina, Mexico, South Africa, Saudi Arab, Kuwait,
Qatar, Dubai, Emirates, other European countries, Group C: Other countries in
Asia, Latin-America or Africa. The countries selected for the comparison should
be in different groups.
6. Critically evaluate the responses of Multinational Enterprises’ (MNEs) to the
challenges of globalization (i.e. strategies, structural forms, etc). Use a range of
examples to illustrate your argument.
7. Do Multinational Enterprises (MNEs) always have a positive impact on National
Economies? Compare and contrast potential impacts of MNE operating in Natural
Resources with potential impacts of MNEs operating in Manufacturing, and
potential impacts of MNEs operating in Services. (Use Dicken’s framework to
assess the impacts of MNEs)
8. ‘The ‘secret recipe’ for the ‘Asian Miracle’ was simply the systematic
exploitation of workers by authoritarian governments. Discuss using countryexamples.
9. Compare and contrast the East Asian Crisis with either the Subprime Crisis or the
Argentinean Crisis. What lessons can be learnt?
10. Is there a way to conciliate business, environmental, and social interests? Discuss
with reference to an specific industry,
11. Is the current process of economic globalization a threat to global sustainable
development? Discuss with examples
Lecture Schedule.
28th September: : Introduction: Economic Growth and the Global Economy
This lecture introduces the course, explains what is required and expected, and provides
an overview of the globalization debate, basic definitions and trends.
5th October:: Foreign Investment
This lecture continues to lay the groundwork by describing the factors influencing foreign
investment and examining patterns of flows of international investment during the
twentieth century.
12th October: Institutions: the supranational institutions
Here we turn to the institutional underpinnings of the global economy and consider
attempts to ‘govern’ it at the supranational level; from the Gold Standard and other
exchange rate mechanisms to the IMF, the World Bank and the WTO.
19th October: Institutions: national and regional institutions
What does globalization mean to national governments? Here we consider responses at
both the national level, including government policy to investment, and the regional
level, taking in regional trade blocs such as the EU.
26th October: The Multinational Enterprise: growth and development
The Multinational Enterprise (MNE) has become one of the key players in the global
economy. This lecture will analyse MNEs organisational structures and map their growth
and development during the twentieth-century.
2nd November: The Multinational Enterprise: role and impact
This lecture considers the role and influence of the MNE in the global economy. What is
their impact on host and home economies? Are they an aid to economic development?
Who Control MNEs?
9th November: The Asian Miracle
The second half of the twentieth saw ‘miraculous’ economic growth and transformation
across large part of East and South-east Asia, beginning in Japan and now in China. This
lecture will analyse in particular the so-called ‘Asian Miracle’, consider the causes of this
process and its significance for the global economy
16 th November: : Crises and the Global Economy
Throughout its history the global economy appears to have been wracked by periodic
crises, from the Latin American Debt crisis of the late 1970s, through the East Asian
crisis in 1997 to the recent sub-prime mortgages crisis. This lecture considers the causes
and consequences of such crises.
23rd November: Governance and Ethics.
Governing globalization is becoming an increasingly complex problem. This lecture
introduces some themes likely to dominate future debates; including what is business
ethics and the protection of intellectual property rights.
Wednesday 25th November:
15.30 : Globalization, Sustainability and Innovation
This lecture analyses globalization in the context of sustainable development and
provides a framework for sustainable and responsible FDI in developing countries. What
is the impact of globalization on the environment, who are the winners and losers in the
globalization Process? What is the role of innovation? Does Globalization have a future?
16.30: Revision Lecture, Exam Preparation Notes
Workshop Schedule
5th October 2009:
WS1: Definitions
Here we will discuss how we might get at a definition of ‘globalization’.
Readings:
‘Introduction: Globalization – A Necessary Myth?’, Chapter 1 in P. Hirst and G.
Thompson, Globalization in Question (Cambridge, Polity, 2002), pp. 1–18.
‘Defining Globalization’ Chapter 2 in Scholte, J.A, Globalization a Critical Introduction,
( London, Palgrave, 2007), pp 53-89
12th October 2009:
WS2::The case for the World Bank
The World Bank is one of the most controversial actors in the global economy. In this
workshop we will consider the case for and against.
Readings:
K. Sarwar Lateef, ‘The World Bank: its First Half Century’ in Goddard et al.
International Political Economy (London, 1996).
Bruce Rich, ‘World Bank: 50 Years in Enough’, in Goddard et al. International Political
Economy.
Ricrad Peet, The Geography of Power: the making of global economic policy ( Oxford
University Press, 2008)
19th October 2009:
WS3: Role of States:
This workshop will require students working in groups.
Each group will analyse the role of the states in two aspects:
a) As attractor of FDI: Students should analyse with one case example, how the five
factors influencing FDI can be applied to decide the potential of a country to attract FDI.
Readings: Student should be versed on the 5 factors framework and bring the
information (newspaper articles, web pages, books) they judge relevant to assess if a
country is a good choice for FDI.
b) States as collaborators. Case study on the political dimensions to trade and investment
analysising how nation states through collaboration can strengthen their influence over
MNEs activities.
Readings:
‘Boeing versus Airbus: Trade in the 1990s’, in Charles Hill, International Business
(London, 2004)
‘Globalization, Governance and the Nation State’, Chapter 1 in P. Hirst and G.
Thompson, Globalization in Question (Cambridge, Polity, 2002), pp. 1–18. (Starting with
the section Governance and the world Economy)
Attendance to this workshop implies that a brief report with both aspects developed ought
the submitted by each group at the end of the workshop,
26th October 2009:
WS4: The Multinational Enterprise: growth and development
This workshop analyses the growth and development of a multinational and the evolution
of its organisational structures to address challenges in the business context.
Reading: ‘Acer Inc.: Taiwan’s Rampaging Dragon’, in Bartlett et al, Transnational
Management, : Texts, Cases and
Readings in Cross-Border Management (London, Irwin/McGraw Hill, 2003)
2nd November 2009
:
WS5: A Law into Themselves?
This workshop discuss the relative power of MNEs compared to states in the Global
Economy
Readings:
‘Let Them eat Cake’, Chapter 3 in Noreena Hertz, Global Capitalism and the Death of
Democracy (London, Arrow, 2002), pp. 49–79
‘Giants with Clay Feet: Why Companies Don’t Run the World’, Chapter 5 in Phillipe
Legrain, Open World: The Truth about Globalisation (London, Abacus, 2003), pp. 132–
150
9th November 2009:
WS7: An Asian Miracle?
This workshop will explore the micro-level foundations of the so-called Asian economic
miracle of the late twentieth century through a case study.
Readings:
‘Introduction’ in The World Bank, The East Asian Miracle
‘State Economic Policies’,Chapter 6 in Dicken P. Global Shift: Mapping the Changing
Contours of the World Economy (London, Paul Chapman, 2005), pp 181-191
Warning: This is a very long reading, there will only be time for a fast brush-up during
the workshop before analysing questions.
16th November 2009:
WS7: The World in Crisis.
This workshop will examine global economic crises through the example of the
Argentinean Crisis, Asian Crisis and subprime mortgage crises. A documentary about the
Argentinean Financial crisis will be showed and further analysed in groups and compared
to other crisis ( i.e Asian Crisis and sub-prime mortgage crisis)
Students will be asked to compare with other crisis, therefore you ought to read before
the workshop information related to the East Asia , Subprime Mortgage or Internet
bubble Crises
Readings:
‘The East Asia Crisis: How IMF Policies brought the World to the Verge of a Global
Meltdown’, in Stiglitz, J. Globalization and its Discontents, pp 89-132
or ‘The People’s Panic’ in Lewis, M ( 2008) Panic, The story of modern Financial
Insanity, pp 309-10; 353-354, 313-329
23th November 2009:
WS8: Intellectual Property Rights and the Pharmaceutical Industry
This workshop will consider how the gains from globalization are to be distributed
through consideration of the controversies surrounding drug patents in recent years.
Readings:
‘Patently Wrong: How Global Patent Laws Harm the Poor and the Sick’, Chapter 10 in
Legrain Open World, pp. 254–
269.
REVISION LECTURE: Wednesday 25th November, 16.30hs
Recommended Textbooks
The recommended textbooks for this course are:
P. Dicken, Global Shift: Mapping the Changing Contours of the World Economy
(London, Paul Chapman, 2005)
(2002, 2003 and 2004 editions of Global Shift are equally appropriate for the purpose of
this course).
And
Charles Hill, Global Business Today (London, McGraw Hill, 2009, but also 2008 and
2007 editions)
Some of the lectures will require readings of:
J. Stiglitz, Globalization and its Discontents (London, Penguin, 2002).
G. Jones, The Evolution of International Business (London, Routledge, 1994)
J. Stiglitz Making Globalization Work: The Next Steps to Global Justice (London,
Penguin, 2007).
However, a number of other books are likely to prove extremely useful. These include:
Globalization and Global Economy
R. Peet, The Geography of Power: the making of global economic policy ( Oxford
University Press, 2008)
M. Wolf, Why Globalisation Works (New Haven: Yale University Press, 2004)
P. Hirst and G. Thompson, Globalization in Question (Cambridge, Polity, 2002)
A. Amin N. Thrift, Globalization, Institutions and Regional Development in Europe
(Oxford, Oxford University Press, 1994)
B. Hocking and S. McGuire (eds.), Trade Politics (London, Routledge, 1999)
A. Kenwood and A. Lougheed, The Growth of the International Economy 1820–2000:
An Introductory Text (London, Routledge, 1999)
N. Klein, No Logo
J. Spero and J. Hart (eds.), The Politics of International Economic Relations (London,
Routledge, 1997)
J. Foreman-Peck, A History of the World Economy: International Economic Relations
Since 1850 (London, Harvester Wheatsheaf, 1995).
Supranational institutions
R. Peet, The Geography of Power: the making of global economic policy ( Oxford
University Press, 2008)
R. Peet, Unholy Trinity, The IMF, World Bank and WTO, (London: Zed Books, 2003)
Role of The State
L. Weiss, Ed, States in the Global Economy, Bringing Domestic Institutions Back In
(Cambridge: CUP, 2003)
P. Hirst and G. Thompson, Globalization in Question (Cambridge, Polity, 2002)
J. Dunning and S. Lundin, S , Multinational Enterprise and the Global Economy
(London, Addison-Wesley, 2008 )
Multinationals
C. Bartlett, S. Ghoshal and J. Birkinshaw, Transnational Management: Texts, Cases and
Readings in Cross-Border Management (London, Irwin/McGraw Hill, 2003)
J. Dunning and S. Lundin, S (), Multinational Enterprise and the Global Economy
(London, Addison-Wesley, 2008 )
Dunning a
P. Hirst and G. Thompson, Globalization in Question (Cambridge, Polity, 2002)
FDI
Moran, T, Graham, EM & M Blomström (2005), Does Foreign Direct Investment
Promote Development?
P. Hirst and G. Thompson, Globalization in Question (Cambridge, Polity, 2002)
Financial Crises
Cooper, G (2008) ‘ The Origin of Financial Crises: Central banks, credit bubbles and the
efficient market fallacy’
Thirkell-White, B ( 2005) The IMF and the Politics of Financial Globalization: From the
Asian Crisis to a New International Financial Architecture? Basingstoke, Palgrave
Lewis, M (2008), ‘Panic, The story of Modern Financial Insanity’ London, Penguin
Ethics
N. Hertz, The Silent Takeover: Global Capitalism and the Death of Democracy (London,
Arrow, 2002)
J. Stiglitz Making Globalization Work: The Next Steps to Global Justice (London,
Penguin, 2007).
Sustainable Development
S. Baker, Sustainable Development, ( London, Routledge,2006) Chapters 2, 3 and 9
J. Stiglitz Making Globalization Work: The Next Steps to Global Justice (London,
Penguin, 2007).
Chudnovsky, D and López, A (1999) “Globalization and Developing Countries: Foreign
Direct Investment and Growth and Sustainable Human Development” Paper prepared for
the UNCTAD/UNDP Global Programme on "Globalization, Liberalization and
Sustainable Development
Of course, any search under the keyword ‘globalization’ will generate a plethora of
references. Reports from international institutions such as the IMF, World Bank or
UNCTAD would provide reliable data.
Of particular interest are
“Globalization: Threat or Opportunity” International Monetary Fund Brief (2002)
www.imf.org/external/np/exr/ib/2000
Pieper, U and Taylor. L (1998) ‘The Revival of the Neoliberal Creed; The IMF, The World
Bank and Inequality in a globalised economy’, CEPA working papers, Series N4,
http:/www.newschool.edu/cepa
and
The OECD Guidelines for Multinational Enterprises (Paris, OECD, 2001),
http:/www.oecd.org/pdfM00004000/M00004775
Selected Web links on Globalisation:
1. BBC-Globalisation: Information on transnational corporations and cultural
globalisation from the BBC
2. Alternative Information and Development Centre: a South African NGO with
extensive archives in globalization
3. Club of Rome: Information and resources on several global issues
4. Economic Policy Institute: Economic issues of trade and globalization
5. Foreign Policy in Focus: US responsibility as a global leader and partner
6. Globalization Guide: Provides both the ‘pro’ and ‘anti’ globalization perspective
7. The Globalization Website
8. The Globalization Research Centre of Hawaii: Academic Research
9. International Centre for Trade and Sustainable Development: Focus on issues of
development and the environment on the context of globalization
10. International Forum on Globalization: Alliance of 60 leading activists, scholars,
economists, researchers and writers to stimulate new thinking in response to the
global economy
11. Polity Press: the site of leading globalization scholars D. Held and A Mc Grew,
provides an outstanding list of globalization links
12. Project Syndicate: Online resource of over 170 international newspapers in over
90 countries.
13. Third World Network: Economic and trade policies, debates around WTO and
important issues on the global economy.
14. World Policy Institute: On line journal that addresses different aspects of
globalization
15. Yale Global Online: current events and debates about globalization