GS IP Gobalization and Development Military tends not to understand economics and development Where has conflict occurred in last

thirty years? - Middle East, Africa, ...the periphery? -- where the resource base is negative - conflict at edge of Christian world...Serbia -- intersection of religion and poverty? -- inequality? Underdevelopment? - causal models may go through religious conflict, but actually the more relevant variables are not religious in nature - in the most direly affected places, people have given up home...nothing to fight over - expectations increasing in developing countries but drought or war.... -- expectations become the locus of conflicts Integrating individual wealth and responsibility (inclusion) only goes so far and then expectations start to build and the well to do start questioning the redistribution; Interrelations of economic and social development - pure economic development will produce/accentuate social inequality Dutch Disease - Colombia...two variable prediction: real effective exchange rate and composition of exports (percentage) -- be very careful...is Colombia catching the Dutch disease? - more complicate model: add tax revenue from natural resources and foreign direct investment....but need to know domestic investment -- Venezuela looks more susceptible...but they manipulate currency - Evidence of the Dutch Disease...Ghana (primary export cocoa) Rent can be derived from any resource....including labor/people - rentier state...(allocative) Taxation - in a democracy, a form of accountability - very low taxes (Saudi, Kuwait)...oil revenue ...rentier...no accountability, doesn't matter...gov spends how they want - tribal society...shortage of resources prevents democratic solution...there must be winners and losers and someone must make these decisions.... ---------------Reaction to the so called Washington Consensus - viewed as Washington's replacement where socialism failed - advocating return to great power politics and an economic battlefield For globalization to occur, there has to be inequality...otherwise you would stay home - nationalism and protectionism vs export-based economy...danger? There are more than one road to development...some don't take the right road...wrong assumptions about how You don't want to seek equilibrium...

- want dynamic model...define my series of derivatives (rates of change) We (US) failed to see return of manufacturing, energy resources, .... - caused us to turn to services. - this is dynamic model...industry goes to other countries, US economy benefits and grows, foreign growth occurs, competitive advantage forms for US, industry returns to US...cyclical Financial globalization vs corporate globalization - governments are designed to provide the common good...fight against accumulation of power - corporations are legally beholden to shareholders to grow profits/value Summary: It is essential to understand global economic models for global security Multiple lenses Models of development all have costs and benefits... Washington Cnsenus--nobody calculated the costs and everyone assumed Gobalization wrote the state out of the equation