World Economy: Analysis of Global Production, Trade, and Finance

This assignment provides an analysis of the world economy, addressing key concepts and theories related to globalization, international trade, and finance. It explores the characteristics of dependency and modern world systems theory, the views of structuralists on globalization, and the factors determining global development. The assignment also examines the precariat, the perspectives of liberals, mercantilists, and structuralists on TNCs, and the assistance states provide to TNCs. Furthermore, it discusses methods TNCs use to reduce taxes, issues of GATT, the Uruguay and Doha rounds, and the differences between at-the-border and behind-the-border trade rules. It also covers the negative impacts of free trade and the role of states in protecting citizens. The assignment draws from various sources to provide a comprehensive overview of the world economy.

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World Economy
Name
Lecturer
Course
Date

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World Economy
The world economy is very critical in the running of the financial affairs of the world.
No country can do without a stable economy and thus most of the governments are forced to
borrow from other developed countries while others depend on themselves to run their internal
affairs. It is very important to note that the economy of any country will determine the welfare of
the citizens in that country and therefore countries must strive to achieve stability in economy.
Q7
Essential characteristics of dependency and Modern World Systems theory
Underdevelopment- these countries are not developed yet because they depend on the developed
countries for aids
Inequality in world economy- there is differences between countries at the core and those
at the periphery
Least industrialized- most of these countries have not industrialize because the lack new
technologies to industrialize
High population comprised of the poor and un educated- most of the people in these
countries lack basic education and thus unable to read and write.
Q8
Outline some of the views structuralists have about globalization. Why do they tend to be
so critical of it?
Political

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Military strength
Economic power
These are the main factors which determine the development of any part of the world.
Q9
What are some of the key characteristics of the precariat? What social groups or segments
of the workforce typically constitute a significant part of the precariat?
Flexible labor
Temporally jobs
Casual laborers
The precariat’s are those members of the society who occupy the lowest level of the
economy. They are less productive and mostly depend on the state for assistance such as
hospitals, schools and other social amenities.
Q13
Explain the different perspectives of liberals, mercantilists and structuralists on TNCs.
Structuralists theory is based on the beliefs, norms and ideas. These three aspects shape the
views and thinking of states, officials, and the international organizations in the world system.
This is used in the identification of what the government should do to create some good political,
economic and military powers. Any government is measured in terms of its ability in military
economy and political powers.

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In the liberal perspective, they argue that states need to looked and observe what other
successful countries did to succeed and do the same. By doing that, they will also succeed
economically politically and in their military. They argue that looking and emulating what these
countries do may lead to success of other countries.
Q14
What kinds of assistance do states give to TNCs? Do you agree with the claim that states
are losing control over TNCs? Why or why not?
Conducive and favorable environment
Tax evasions
Government subsidies
Protection from other internal competitors
I agree that states have lost control to the TNCs to a much extent because these are very
big operations and have some great influence to the economy of a country. Their influence to the
country cannot be ignored or wished away because they contribute to a great share of the
government’s economy. Most of the citizens have got employments in these operations and so
any government would find it difficult to do away with them. In terms of political influence, they
have been very influential in that they have always been in the support of but financial and
physical assistance to those political alliances they think would favor them once in power.
Q15
Explain some of the methods that TNCs use to reduce their taxes
They use tax havens; transfer pricing, lower tax jurisdictions as well as tax evasions.

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Q16
Issues of GATT Uruguay round and the WTOs Doha round
Here there was some very critical aspects of trade which were being discussed among them
included the following
There was the establishment of new world trade organization which was supposed to
regulate the trade globally. It was mandated with the overall duty of ensuring that trade was done
according with the set rules and regulations of the world trade organizations. There were some
set principals who were aimed at ensuring that the countries were not engaged in the unfair
pricing of their products and thus the products were not sold at fair minimum prices. It also
ensured that the tariff rates were lowered to 3.9 percent on the good which were manufactured by
the developed countries. In other words, the GATT Uruguay was meant to stream line the trade
between these countries which were involved in trade. It was meant to ensure that no one
exploited the other in trade and thus it levelled the ground for doing business between different
parties.
In the Doha round there were also some critical measures put in place to ensure that the
welfare of humanity was well catered for. These comprise of human rights, agricultural produce
and marketing in developing countries, the effects of operations in the environment, there was
also some people who thought that there was lack of transparency in their dealings in terms of
WTO. Some people were of the opinion that these would attract some mixed reactions because
countries were sovereign and so did not have to adhere to the rules set by the WTO but rather
they would go with their own sovereign rules of their respective countries. So that was a major
problem which needed to be addressed with a lot of seriousness.

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Q17
At the border rules are those trade rules which governs trade within a specific jurisdiction
while the behind the border trade rules are those which governs trade across different
governments and international organizations.
The behind the border trade rules are often not easily accepted by the states to operate in
their countries. Most of them have been seen as biased and hence geared towards favoring a
particular party at the expense of the other. They are seen as interfering with the sovereignty of
other countries and that has contributed to many countries failing to agree with behind the border
trade rules to much extend
Q18
To some scholars, the free trade and lead to unfair or negative impact in the following
ways. First it may lead to the loss of employment. There is some fear over the job security where
they think that the job will not be secure and as a result many people may lose their jobs.
Undermining democracy
Environmental protection
Job security
The government must ensure that their citizens are protected against external forces as
well as pests and hazards. These include pests from other places which may come with products
such as agricultural products. These products may come with these pests which in turn may
destroy the crops in the farms

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It also comes with issue of public health by polluting the environment after which the lives of the
people may be exposed to danger.
Bibliography

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