Professional Documents
Culture Documents
Section: 03
Fall 2013
September 29, 2013
L5&6
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Topics
Property Rights (Cont. from last lecture)
World Development Report 2005 - Ch 4 pp. 79-84
Globalization
Defining characteristics
Potentials and
Dangers
Property Rights
Secure property rights link efforts with reward
Assure firms that they will be able to reap the fruits of their
investment
Property Rights
Land titling is a form of land reform in which private individuals and
families are given formal property rights for land which they have
previously occupied informally or used on the basis of customary land
tenure
Titling increased the value of rural lands anywhere from 43 to 81% in
Brazil, Indonesia, Thailand and Philippines
In case of urban lands, it increased the value by 14% in Manila
Secure property rights and environmental stewardship (Box 4.3)
Property Rights
Rights to land
Improved access to credit, titled land as ready collateral, land ownership as
indicator of creditworthiness
Maintain an effective titling program
Initial cost, multiple claims, inertia to reform
Globalization
Globalization and you
Everything you consume in a day and their country of origin
What is globalization?
Globalization
Main aspects of globalization
International trade and the creation of the global market
place
Globally organized products and investment flows
Globalization
Mini case: The world in your coffee cup
2.5b cups of coffee consumed in a day
Produced far from where it is consumed
Ethiopia where coffee was believed to be discovered
Choche, Ethopia was studied
Individual farmers sell to the local trader
Shipped to Addis Ababa 250 miles away
Globalization
Growth over time
The first wave late 19th century
The Age of Empire inputs from colonies, export back finished
products. Big expansion of world trade
The second retreat wave between WWI (1914) & WWII (1939)
Instability, economic problem, trade barrier requested by the
domestic firms; USA erected tariffs and the trading partners followed
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Globalization
Views on globalization
Classical and neoclassical view globalization is good
The notion of absolute advantage Smiths argument
Ricardian model and comparative advantage
2.
Question: what benefit does a developing country get from opening its border to
trade
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Globalization
Views on globalization
Radical/Marxist views: globalization is bad the dependency
tradition
Karl Marx agreed that it led to growth, argued that there was
a fatal flaw in capitalism
Imperialism capitalism works differently in different parts of
the world
Imperial rivalry among nations derived from rivalry among firms
Expansion among colonies even with military might
Dependency tradition post colonial societies continued to suffer
exploitation thoughts? Reasons? Examples?
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Globalization
Views on globalization
Structurist writers globalization is good if
Success of globalization depends on various conditions
Industrialization and late industrialization economies
cannot utilize the same recipes
The system is different there are developed economies
above
Globalization
International business strategy considerations
Possible objectives
Management challenges
Cross cultural management
Globals marketing
Global finance
Exchange rate risk
Risk of financial contagion
Need to adapt to different financial procedures
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Globalization
Ethical considerations
Global CSR
ethical consumerism, i.e., fair trade, fair sourcing
Global citizenship
Employment practices
Exploitation, fair pay, benefits
Human rights
Allegations around sweatshops
Environment
Abuse market power
Attitude to graft and corruption
Padma bridge and SNC Lavalin
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