Rodrik on Globalization Intro and Chapter 1 Flashcards | Quizlet 1/6/20, 9)27 PM

Rodrik on Globalization Intro and Chapter 1

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Terms in this set (8)

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Rodrik on Globalization Intro and Chapter 1 Flashcards | Quizlet 1/6/20, 9)27 PM

Global Markets - Global markets suffer from weak

governance so they are prone to
instability, inefficiency, inefficiency, and
illegitimacy
MARKETS AND GOVERNMENTS ARE
COMPLEMENTS, NOT SUBSTITUTES

Chapter 1: - The first 2 pages just told the story of

the Hudson Bay Company (the fur
company that started in Canada)
- Where there is globalization, there are
rules (the real question is what are they?
Who imposes them? And how?)
- Markets require non-market institutions
in order to function

Trade - There are gains to be made from trade,

but laws and regulations (backed up by
force if needed) are required for it to
happen

In the Hudson Bay - Canada bore this expense of being

Company example: responsible for peace, security, and laws
to keep trade efficient
- When private companies no longer
want this burden, it typically gets passed
off to the state

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Rodrik on Globalization Intro and Chapter 1 Flashcards | Quizlet 1/6/20, 9)27 PM

Institutions that support - long term relationships based on

markets, are designed reciprocity and trust, belief systems, and
to reduce these third-party enforcement
transaction costs - Belief Systems
- Third-Party Enforcement

Government in Trade - Governments are needed to preserve

the legitimacy of markets by protecting
people from the risks and insecurities
markets bring with them
- If you want markets to expand, you
need governments to do the same

International Trade Risk - Therefore, international trade and

vs. Domestic Trade Risk finance entail inherently higher
transaction costs than domestic
exchanges

Markets are: - not self-creating, self-regulating, self-

stabilizing, or self-legitimizing
- Every well-functioning market blends
state and market, laissez-faire and
intervention
Every country has placed substantial
responsibilities on their public sector

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Rodrik on Globalization Intro and Chapter 1 Flashcards | Quizlet 1/6/20, 9)27 PM

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