Notes
Economic systems and policy
- Command economies (the state plans production) vs market economies (supply and demand). Most states are mixed.
- Neoliberal reforms: privatization, deregulation, lower trade barriers and cuts to subsidies, often encouraged by the IMF and World Bank through structural adjustment.
- Examples: Mexico joined NAFTA (1994; now the USMCA) and privatized state industries; China's Deng Xiaoping began market reforms in 1978 (special economic zones) while keeping one-party rule; Russia's rapid privatization in the 1990s created powerful oligarchs; Nigeria privatized some industries and struggles with dependence on oil.
Globalization
- Trade, investment, migration and technology connect economies. Benefits: growth, foreign investment, jobs. Costs: inequality, loss of some industries, environmental damage.
- Supranational organizations like the EU, WTO and UN affect sovereignty. The UK's Brexit (2020) reclaimed sovereignty from the EU.
- Sanctions affect economies, like those on Iran (over its nuclear program) and Russia (after it invaded Ukraine).
Natural resources
- Resource curse: countries rich in oil (Nigeria, Russia, Iran) often have more corruption, less economic diversity, and authoritarian tendencies because rulers don't depend on taxpayers.
- Mexico nationalized oil (Pemex) in 1938 and later opened some of it to private investment.
Social and environmental change
- Urbanization and migration (rural to urban in China, Mexico and Nigeria; emigration from Mexico to the U.S.).
- Population policies: China's one-child policy (1980–2015), later replaced by two- and three-child policies.
- Environmental policies: the UK's climate targets; China's air pollution and push into renewable energy; Mexico and Nigeria's efforts under the Paris Agreement.
- Religion and policy: Iran's laws on dress and family; debates over secularism.
Practice
Deng Xiaoping mixed markets with party control.
A few insiders gained control of major industries.
Rulers can rely on oil money instead of citizens' taxes.
They're neoliberal reforms tied to loans.
The UK left the European Union in 2020.
It lowered trade barriers with the U.S. and Canada.
China moved to two- and then three-child policies.
Sanctions aimed to pressure Iran's government.
Free response
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Free-response question
Answer (a), (b) and (c).
(a) Define neoliberalism.
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An economic approach that favors free markets, privatization, deregulation and free trade, with a smaller role for the state.
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(b) Explain ONE neoliberal reform in Mexico.
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Mexico privatized many state-owned companies and joined NAFTA in 1994, lowering trade barriers with the U.S. and Canada.
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(c) Explain ONE political effect of economic reform in Mexico or China.
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In Mexico, economic problems and reforms weakened the PRI's support, helping opposition parties win in 2000. In China, growth from reforms boosted the Communist Party's performance legitimacy.
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