The process that has come to be called "globalization" is exposing a deep fault line between groups who have the skills and mobility to flourish in global markets and those who either don't have these advantages or perceive the expansion of unregulated markets as inimical to social stability and deeply held norms. The result is severe tension between the market and social groups such as workers, pensioners, and environmentalists, with governments stuck in the middle. The most serious challenge for the world economy in the years ahead lies in making globalization compatible with domestic social and political stability—or to put it even more directly, in ensuring that international economic integration does not contribute to domestic social disintegration.

Has Globalization Gone Too Far

The main task of this paper is to discuss ways in which production financed by foreign direct investment, that is, that undertaken by multinational enterprises (MNEs), has affected our thinking about the international allocation of resources and the exchange of goods and services between countries. The analysis takes, as its starting point, the growing convergence between the theories of international trade and production, and argues the case for an integrated approach to international economic involvement, based both on the location-specific endowments of countries and the ownership-specific endowments of enterprises. In pursuing this approach, the paper sets out a systemic explanation of the foreign activities of enterprises, in terms of their ability to internalise markets to their advantage. It concludes with a brief examination of some of the effects which the MNE is allegedly having on the spatial allocation of resources, and on the patterns of trade between countries.

Trade, Location of Economic Activity and the MNE: A Search for an Eclectic Approach

Human security is the latest in a long line of neologisms—including common security, global security, cooperative security, and comprehensive security—that encourage policymakers and scholars to think about international security as something more than the military defense of state interests and territory. Although deanitions of human security vary, most formulations emphasize the welfare of ordinary people. Among the most vocal promoters of human security are the governments of Canada and Norway, which have taken the lead in establishing a “human security network” of states and nongovernmental organizations (NGOs) that endorse the concept.1 The term has also begun to appear in academic works,2 and is the subject of new research projects at several major universities.3 Human Security Roland Paris

Human Security: Paradigm Shift or Hot Air?

In 1989, peaceful change, which a leading realist theorist had declared a very low-probability event in international politics less than a decade before, accommodated the most fundamental geopolitical shift of the postwar era and perhaps of the entire twentieth century: the collapse of the Soviet East European empire and the attendant end of the cold war. Many factors were responsible for that shift. But there seems little doubt that multilateral norms and institutions have helped stabilize their international consequences. Indeed, such norms and institutions appear to be playing a significant role in the management of a broad array of regional and global changes in the world system today.

https://www.cambridge.org/core/services/aop-cambridge-core/content/view/S0020818300027831

Multilateralism: the anatomy of an institution

Does increased democracy promote or jeopardize foreign direct investment (FDI) inflows to less-developed countries? We argue that democratic institutions have conflicting effects on FDI inflows. On the one hand, democratic institutions hinder FDI inflows by limiting the oligopolistic or monopolistic behaviors of multinational enterprises, facilitating indigenous businesses' pursuit of protection from foreign capital, and constraining host governments' ability to offer generous financial and fiscal incentives to foreign investors. On the other hand, democratic institutions promote FDI inflows because they tend to ensure more credible property rights protection, reducing risks and transaction costs for foreign investors. Hence, the net effect of democracy on FDI inflows is contingent on the relative strength of these two competing forces. Our argument reconciles conflicting theoretical expectations in the existing literature. Empirical analyses of fifty-three developing countries from 1982 to 1995 substantiate our claims. We find that both property rights protection and democracy-related property rights protection encourage FDI inflows; after controlling for their positive effect through property rights protection, democratic institutions reduce FDI inflows. These results are robust against alternative model specifications, statistical estimators, and variable measurements.

http://people.tamu.edu/~quanli/papers/IO_2003_fdidem.pdf

Reversal of Fortunes: Democratic Institutions and Foreign Direct Investment Inflows to Developing Countries

The Peterson Institute for International Economics (PIIE) is the only think tank in the United States devoted to global economic policy issues. Its staff of 50 includes two dozen Senior Fellows who address the entire range of international trade and financial topics as well as all key countries and regions. The first comprehensive survey of the world’s 5,465 think tanks recently ranked the PIIE as tied for “Top Think Tank in the World” (with the Brookings Institution, whose budget is eight times as large). Another survey indicated that the Institute has recently been quoted more widely in the quality media than any other economics think tank and that its Director, C. Fred Bergsten, has been the most quoted think-tank economist in the world since 1997.

The Peterson Institute for International Economics

American Multinationals and American Interests

China has emerged as an economic powerhouse (projected to have the largest economy in the world in a little over a decade) and is taking an ever-increasing role on the world stage. "China's Rise: Challenges and Opportunities" will help the United States and the rest of the world better comprehend the facts and dynamics underpinning China's rise - an understanding that becomes more and more important with each passing day. Additionally, the authors suggest actions both China and the US can take that will not only maximize the opportunities for China's constructive integration into the international community but also help form a domestic consensus that will provide a stable foundation for such policies. Filled with facts for policymakers, this much anticipated book's narrative-driven, accessible style will appeal to the general reader. This book is unique in that it analyzes the authoritative data on China's economy, foreign and domestic policy, and national security.The expert judgments in this book paint a picture of a China confronting domestic challenges that are in many ways side effects of its economic successes, while simultaneously trying to take advantage of the foreign policy benefits of those same successes. "China's Rise: Challenges and Opportunities" from The China Balance Sheet Project, a joint, multiyear project of the Center for Strategic and International Studies and the Peterson Institute, discusses China's military modernization, China's increasing soft power influence in Asia and around the world, China's policy toward Taiwan, domestic political development, Beijing's political relations with China's provincial and municipal authorities, corruption and social unrest, rebalancing China's economic growth, the exchange rate controversy, energy and the environment, industrial policy, trade disputes, and investment issues.The book's introduction, by noted China expert Bates Gill, and conclusion address additional issues, such as key trends in China's political decision making and its impact on US interests.

China's Rise: Challenges and Opportunities

Exchange Rate Policy

The creation of a single European currency will be the most important development in the international monetary system since the adoption of flexible exchange rates in the early 1970s. The dollar will have its first real competitor since it surpassed the pound sterling as the world's dominant currency during the interwar period. As much as $1 trillion of international investment may shift from dollars to euros. Volatility between the world's key currencies will increase substantially, requiring new forms of international cooperation if severe costs for the global economy are to be avoided. The political impact of the euro will be at least as great. A bipolar currency regime dominated by Europe and the United States, with Japan as a junior partner, will replace the dollar-centered system that has prevailed for most of this century. A quantum leap in transatlantic cooperation will be required to handle both the transition to the new regime and its long-term effects. The global economic roles of the European Union and the United States are nearly identical. The eu accounts for about 31 percent of world output and 20 percent of world trade. The United States pro vides about 27 percent of global production and 18 percent of world trade. The dollar's 40 to 60 percent share of world finance far exceeds the economic weight of the United States. This total also exceeds the share of 10 to 40 percent for the European national currencies

C. Fred Bergsten

Papers

The Peterson Institute for International Economics

American Multinationals and American Interests

China's Rise: Challenges and Opportunities

Exchange Rate Policy

The Dollar and the Euro