During the late1990’s, International co-operation contributed widely to new ideas concerning world trade and economic development. Currently, many countries are growing economically and improving their relations with other nations because of further international co-operation. In this essay, international co-operation is defined as the sharing willingly of ideas and work tasks between the bureaucrats of different nations for their own benefit and interest. Damages refer to spoiling something which reduces its importance. Finally, economic growth means an improvement in the economy of a particular country because of an increase in the number of goods and services. This essay argues that International co-operation does not damage economic growth. …show more content…
This is because trade openness plays a crucial role in the development of economic growth. Firstly, world economies integrate through the import and export industries which boost the per capita income of countries. According to Rahman and Mamun (2016, p. 807), the GDP (gross domestic product) per capita in Australia was 27% in 1990 which increases and reached up to 41% in 2013 because of trade openness. This evidence shows that the import and export of goods and services lead to an increase in the GDP of Australia which further helps in strengthening economic development by increasing the per capita income of the country. Due to an increase in the per capita income of the country, people become more stable financially and these financial situations help in the overall economic development of a country. This can be possible only with free trade that occurs due to international co-operation. Moreover, research conducted by Noguer and Siscart (2005, cited in Newfarmer & Sztajerowska 2012, p. 9) examined that 1% increase in export and import of goods and services leads to 1% improvement in the per capita income. This evidence shows that trade openness is directly linked with an increase in the per capita income which further facilitates the economic growth of a country because people have more money due to the increase in per capita income. This solves the financial …show more content…
This is because FDI plays a key role in the fiscal development of countries. Firstly, inward FDI flows into the country leads to increase in the GDP (Gross Domestic Product) per capita in developing countries. According to Boghean (2015, p. 59), the FDI flow in developing countries was nearly 280 million US dollars in 2000 while GDP per capita was about 1.5 dollars, whereas in 2013 the FDI inflows expand up to 780 million US dollars which further expand the GDP per capita approximately 4.6 dollars. This evidence shows that FDI may be required for those countries who want financial development because there is a direct relationship between the FDI inflows into the country and the GDP per capita of the country. Because of the rise in inflow of FDI in developing countries, GDP per capita increases which further aid in the economic growth of these underdeveloped nations. This can happen because international co-operation permits the inflow of FDI into countries which promote economic development. Secondly, FDI also facilitates the transfer of technology and business for economic development of nations. A study by Gigov (2016, p. 348) indicates that FDI plays a vital role in advancing the knowledge and technology, and the transfer of technology and business through FDI makes the countries closer that have a direct positive impact on the economic growth of
In conclusion, economic integration and economic globalization help reduce the probability of interstate belligerency because war negatively impacts the markets and investments, post World War reconstruction helps build stronger economies and lastly, countries would rather focus on specialization than war. In addition, economic integration and economic globalization help the economy grow and expand. These points show that war and conflict is decreasing because countries that are economically integrated prefer to free trade without any restrictions. As a result, markets increase since countries have more access to trade and that leads to an increase in globalization, whereas war would put the countries’ economies at risk.
“Institutions are essential; they facilitate cooperation by building on common interests, hence maximizing the gains for all parties. Institutions provide a guaranteed framework of interactions; they suggest that there will be an expectation of future encounters. They facilitate cooperation by building on common interest, thus maximizing the gain for all parties.” (Mingst, 2011) This theory supports the idea that if one cooperates with the other they both will gain, but once the established trust is lost between the cooperating countries, one should do whatever is in their own economic i...
Few governments will argue that the exchange of goods and services across international borders is a bad thing. However, the degree to which an international trading system is open may come into contest with a state’s ability to protect its interests. Free trade is often portrayed in a good light, with focus placed on the material benefits. Theoretically, free trade enables a distribution of resources across state lines. A country’s workforce may become more productive as it specializes in products that it has a comparative advantage. Free trade minimizes the chance that a market will have a surplus of one product and not enough of another. Arguably, comparative specialization leads to efficiency and growth.
These types of treaties seek not only to promote growth in the economy between countries, there are different levels of integration although stimulate trade is the main, it is also important to make an exchange in factors of production, seeks to take advantage of what is known As comparative advantages between each participating region or country which would result in a more efficient development in its different markets and an improvement in the economic
Since foreign aid programs are here to stay, it is important to focus on the enormous potential for foreign aid to be effective. One such way is through augmenting a state’s ability to attract foreign direct investment (FDI). FDI is a good option because it has the potential to be a more long-term solution than pub...
Haddad, M., Shepherd, B., & World Bank. (2011). Managing openness: Trade and outward-oriented growth after the crisis. Washington, D.C: World Bank.
In “Anarchy is What States Make of It” Alexander Wendt describes two opposing state systems—competitive and cooperative. In competition, “states identify negatively with each other’s security so that ego’s gain is seen as alter’s loss.” In cooperation, “the security of each [state] is perceived as the responsibility of all.” Currently, there are problems such as the spread of nuclear weapons, terrorism, poverty in developing countries, international financial instability, and climate change that confront the entire global community. Ideally states could cooperate in order to solve all of these dilemmas in the next twenty years. Realistically, they will only solve problems with specific and easily stated solutions. Cooperation tends to trip over every possible stumbling block, and simple solutions are necessary in order to clearly define a problem, evaluate the costs and benefits, and allow states to reach a consensus. Simplicity may require fewer actors; some problems would be better off solved within a state or bilaterally.
In order for international trade to work well, governments must allow the world market to determine how goods are sold, manufactured and traded for all to economically prosper. While all nations may have the capability to produce any goods or services needed by their population, it is not possible for all nations to have a comparative advantage for producing a good due to natural resources of the country or other available resources needed to produce a good or service. The example of trading among states comprising the United States is an example of how free trade works best without the interve...
Trade is more than the exchange of goods and services; it sows the seeds for growth, development and provides the knowledge and experience that makes development possible (Cho, 1995). Trade is considered one of the main driving forces behind economic growth and poverty reduction, especially in Africa (Fosu and Mold, 2008). Adam Smith’s 1776 theory of absolute advantage states that a trading nation can gain by specialising in the production of the commodity of its absolute advantage and exchanging part of this output with other trading partners for the commodities of its absolute disadvantage (Llorah, 2008). This process enables countries to extend beyond their borders, allowing greater specialisation in production, enhanced effectiveness in use of thin resources, the growth of national income, the capacity to accumulate independent wealth and enhances the growth of the economy (Cho, 1995). According to DFID’s report, Trade Matters, other positive derivatives include raised employment, increased household income and the chance for people to earn their way out of poverty, independent of aid (DFID, 2005). The role of trade, while strongly advocated, is still highly debated (Collins and Graham, 2004; Madeley, 2000) and many recent studies question the positive role of economic growth on open trade (Bene, 2009). The extensive arguments surrounding this controversial discussion empirically highlight the difficulty in isolating the effect of trade liberalisation on economic growth, although it is clear that it does, and will continue to have, an important role in poverty alleviation.
The global economy needs free trade. Countries need free trade. Trade with other countries occurs at some level in every country globally. There may be some indigenous tribes within some countries that can lay the claim that they are self-sufficient, however, there is not a single country that can say the same. Proponents of an open trading system contend that international trade results in higher levels of consumption and investment, lower prices of commodities, and a wider range of product choices for consumers (Carbaugh, 2009, p26). Free trade is necessary. How do countries decide what to import and what to export?
Sukar, A., Ahmed, S., & Hassan, S. (n.d.). THE EFFECTS OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH. Southwestern Economic Review.
This paper concerns the two main paradigms in international relations, realism and liberalism. It will first define the terms separately, then discuss the origins of each theory, then examine the strengths and weaknesses of each theory and demonstrate how the theories work on their own. At the same time, this essay will investigate the most convincing theory of the both as it incorporates the presumptions into the case study of the United Sates’ invasion of Iraq in regards to realism and liberalism. This essay will conclude by elaborating on why realism is the most convincing theory in international relations.
States cooperate to create international institutions with the goal of avoiding market failures and creating trust. The peaceful drive by self-interested economic behavior permeates international relations. The International Political Economy, stems from the neoliberal alternative of International Relations theory which emerged in the 1980’s through the writings of Keohane (1984) who emphasised the economic sphere and fused politics and economics in order to go beyond the limiting security obsession.
Today's world is full of problems present on an international scale. Yet, differences amongst states compel them to eschew cooperation. The division between the global North and South is the greatest challenge to global governance. The contrast in economic welfare, political stability, and culture among states creates many dilemmas for the international community. The economic differences between highly developed economies and the rest of the world deters cooperation.
International trade is an economic practice where countries can import and export goods with no concerns to government intervention which includes tariffs and import/export bans or limitations. International trade has several advantages on developing countries; who are nations with low levels of economic resources or low standard of living. Developing countries can advance their economy through strategic free trade agreements. Free trade generally improves the quality of life of poor nations. Nations can import goods that are not easily available within their borders; importing goods may be cheaper for than trying to produce consumer goods. Many developing nations do not have the production procedures available for translating raw materials into valuable goods.