How can states working together to protect economic security? What are the main intl. issues that countries seek to address internationally? (a) Preventing perpetual under-development (b) Creating a stable intl. financial system (c) Preventing one country’s econ problems from becoming regional and intl. crises, (d) facilitating trade in ways that enhance comparative advantage and innovation What are the main global institutions to collectively protect econ. security?: The Bretton Woods framework: The World Bank, the IMF, and GATT/WTO

WHAT IS THE INTERNATIONAL MONETARY FUND, AND WHAT DOES IT DO TO AVOID INTL. ECONOMIC CRISES? A quick bit about Bretton Woods (NH, 1944) Is the IMF an intl. central bank? Where does it get its money from The IMF used to fix exchange rates; now markets do that for the most part by floating currencies, although China pegs its currency within bands to lower its value. Today, the IMF collects and disseminates uniform economic data. It also monitors the health of the global economy and those of all member countries; it coordinates intl. stimuli when needed per Keynesian principles Now, it is a lender of last resort (+ /- 100 b in loans before the crisis; presently has a 400b deficit); Many of these loans are for balance of payments issues. It protects currencies against coordinated attacks; & laundering What is the IMF’s conditionality (what’s the Washington Consensus), and what are the big debates about it? How are states avoiding it, and at what costs (investment $ is tied up)? Why does the US get to flaunt the rules and what role does the dollar play in this? What is moral hazard, and what are the main debates over the IMF activities and dealing with international crises? What is the Heavily Indebted Poor Countries (HIPC) Initiative?

WHAT IS THE WORLD BANK GROUP, AND WHAT DOES IT DO? It lends around $ 25 billion annually, but it leverages much more The International Bank for Redevelopment (This is the World Bank): Just a bank that lends in unstable situations The International Development Association: No interest loans for human development The International Finance Corporation: Loans for enhancing capitalism The Multilateral Investment Guarantee Agency: Leveraging private development loans Who gets WB aid? The BRIC What exactly is state capitalism and how is it decreasing importance of the WB? How are China and to a lesser degree ME oil countries replacing the WB

HOW DO THE IMF AND WORLD BANK MAKE DECISIONS? Who gets to rule the world? Europe (IMF) and the US (WB) Voting shares: 3% of the membership casts 39% of the votes (although this is changing) Developed countries=55% of the votes Supermajorities are required 2008 “reforms”: The developing world gained 2.9% additional voting power, with most of it going to the world’s largest economy: China How is the WTO different?

WHAT DOES THE WORLD TRADE ORGANIZATION DO? Why do economists think countries should trade? (What is comparative advantage?) So, why don’t we trade as much as we should? Why do bilateral agreements get in the way? How do domestic politics play into trade? Why does the world need an international organization to coordinate trade? Why did the GATT form more slowly than the IMF and the WB? What are trade “rounds”? And why are they so difficult to negotiate? How are the decision-making processes and the political structures of the WTO different from that of the IMF or the World Bank? What is the Doha Round? Why is it having such problems? How can we use it to make the world better for almost everyone?