GM4000 GLOBAL POLITICAL ECONOMY Dr. Roy Nelson, Spring 2011

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1 Dr. Roy Nelson Thunderbird School of Global Management N. 59th Avenue Glendale, Arizona Tel Fax Office Hours: M/W 4:30-5:30 PM Arizona time. GM4000 GLOBAL POLITICAL ECONOMY Dr. Roy Nelson, Spring 2011 Required Readings David Balaam and Bradford Dillman, Introduction to Political Economy (Longman, 2010, 5 th edition - paperback version). Roy Nelson, GM 4000 GPE Spring 2011 coursepack. Financial Times newspaper (available free via IBIC databases). On-line readings on Thunderbird Learning Environment (TLE): These are designated in the syllabus and session pages with a + (plus sign). Grading Midterm Exam 35% Final Exam 40% Group Presentation 10% Four Brief Quizzes 10% (each quiz is worth 2.5%) 5% Your final grade is based upon your class standing (the sum of the case quizzes, midterm, final exam, group presentation, and class participation scores) relative to other class members. The quizzes will be based primarily on the cases to be discussed in the course, although they will also cover some material from other readings/class discussion. The midterm and final will consist of both multiple choice and essay questions. The group presentation will be a PowerPoint presentation on a specific GPE-related topic. I will distribute a review sheet for both exams.. Office Hours and Contact Information My office hours are Monday/Wednesday 4:30 5:30 PM, and by appointment. My office is in Room 10 in the Garvin Center Building (just east of the lecture halls). roy.nelson@thunderbird.edu. Telephone:

2 COURSE DESRIPTION AND OBJECTIVES Global managers operate in an international economy that presents tremendous opportunities as well as risks. Globalization has dramatically expanded opportunities for international trade, investment, and economic development. At the same time, global managers have to deal with the prospect of trade wars, international financial crises, environmental regulations, ethical dilemmas, and intensified competition over markets and resources. In addition, international organizations such as the International Monetary Fund, World Trade Organization and World Bank Group have a direct impact on international business operations. The overall objective of this course is to develop analytical tools for understanding the rapidly changing and dynamic global political economy. With these tools, managers will be better prepared to anticipate the risks and take advantage of the opportunities they will encounter in the global business environment. The specific objectives of this course are the following: To develop tools of analysis for understanding trends and developments in the global political economy To develop students abilities to use these tools to assess international economic institutions such as the International Monetary Fund, World Trade Organization, and World Bank Group To develop analytical tools for assessing a country s foreign economic policy To develop an understanding of environmental and ethical issues that affect the strategy of global corporations To introduce students to analytical frameworks for country risk analysis TEACHING METHODS This course will use a variety of teaching methods including PowerPoint presentations, case studies, online lecture videos, quizzes, and classroom discussion. The course is demanding and requires that you stay on top of the material. Should you have any questions at any time, please feel free to contact me directly via at roy.nelson@thunderbird.edu or by telephone at

3 COURSE SCHEDULE Week 1 (January 24-26; ALSO: Friday, January 28 Make-Up Session 1-3 PM LOCATION TBD) Thriving in a Global Economy: Three Views of the World (Theories of International Political Economy): These sessions will explain three major analytical perspectives (and recent variations on these perspectives) for assessing trends and developments in the global political economy. Although they may be called by different names analytical perspectives, frameworks, ideologies, worldviews, or, in German, Weltanschauung everyone holds them, to one degree or another, and we will use them in evaluating the IMF, World Bank, and WTO from different perspectives. David Balaam & Bradford Dillman, Introduction to Political Economy, Chapters 2-4. Week 2 (January 31; No GPE class on February 2) VIDEO CASE: Wal-Mart, Globalization, and China (Monday, January 31) No reading Week 3 (February 7-9) Week 4 (February 14-16) Quiz #1 on Monday, February 14 Group Presentations on Global Financial Crises on Wednesday, February 16 Politics and the Management of International Monetary and Financial Relations: In order to set the context for understanding the International Monetary Fund, we will use the frameworks to analyze the evolution of international monetary relations. We will discuss the emergence and decline of the Bretton Woods system, the evolution of the IMF, different perspectives on the nature of IMF operations, and IMF conditionality. We will also discuss the role of the London and Paris Clubs. Balaam and Dillman, Chapters "IMF at a Glance" (from the IMF website) + What is the International Monetary Fund? (from the IMF website) +Barry Eichengreen, The Dollar Dilemma: The World s Top Currency Faces Competition, Foreign Affairs, September/October 2009, pp Joseph Stiglitz, The Insider: What I Learned at the World Economic Crisis, New Republic, April 17, 2000, pp The Fund Bites Back, The Economist, 2002, p Barry Eichengreen, The Globalization Wars, (review of Stiglitz s book), Foreign Affairs, July/August 2002, pp Roy C. Nelson, Causes and Consequences of Brazil s 1999 Devaluation. Christine A. Kearney, The Creditor Clubs: Paris and London (GPE courspack). CASE: Gregory P. Corning, Managing the Asian Meltdown: The IMF and South Korea, 2000 (GPE coursepack). 3

4 Week 5 (February 21-23) Monday, February 21: IMF Case Video (Mandatory Attendance) Wednesday, February 23: Lecture Videos on World Bank (Mandatory Attendance) Economic Development and the World Bank: These sessions will discuss the evolution of the International Bank for Reconstruction and Development (IBRD); the International Development Association, International Finance Corporation, MIGA, and the emerging World Bank Group; organization and structure of the World Bank organization; lending policies of the World Bank Group; evolution of the organization; addressing the debt problem; project and structural adjustment lending +"World Bank Group at a Glance" (from WBG website) +"World Development Report 2002: Building Institutions for Markets" (summary; from WBG website). +Steven Pearlstein, "World Bank Rethinks Poverty," The Washington Post, September 13, 2000, p. E1. + World Development Reports Homepage (from the WBG website) +Jessica Einhorn, Reforming the World Bank, Foreign Affairs, January February 2006, pp Week 6 (February 28-March 2) QUIZ #2 on Monday, February 28 The World Bank s Role in the Chad-Cameroon Petroleum Development and Pipeline Project (Monday, February 28) CASE: Benjamin C. Esty and Carrie Ferman, The Chad-Cameroon Petroleum Development and Pipeline Project 2005 (GPE Coursepack) International Trade Relations and the Role of the WTO/GATT (Wednesday, March 2): GATT/WTO as an organization; international trade relations and the Rounds of the multilateral trade negotiations; regional economic integration and the state of current trade relations. Balaam and Dillman, Chapter 6. + What is the World Trade Organization?" + Principles of the Trading System + Settling Disputes: The WTO s Most Original Contribution + The Panel Process: Flow Chart +Walden Bello, "Serving the Wealthy, Not the Poor," The Ecologist, September Peter Sutherland, Transforming Nations: How the WTO Boosts Economies and Opens Societies, Foreign Affairs, March/April

5 Week 7 (March 7-9) Relations Between the Developed and Developing World (North-South Relations): role of the South in the international division of labor; structuralism and Raul Prebisch; central tenets of structuralism thought at the national, regional, and international levels; import substitution industrialization; commodity groups and cartels; New International Economic Order (NIEO) Balaam and Dillman, Chapter 15 Week 8 (March 14-16) Group Presentations on Global Trade Disputes on Monday, March 14 IN-CLASS MIDTERM EXAM ON WEDNESDAY, MARCH 16 Week 9 (March 21-23) QUIZ #3 on Wednesday, March 23 U.S. Foreign Economic Policy: Predicting/Explaining U.S. Foreign Economic Policy: approaches to explaining U.S. foreign economic policy; the role of the USTR. CASE: Standing Up for Steel: The U.S. Government Response to Steel Industry and Union Efforts to Win Protection from Imports (GPE coursepack). + Lessons of Steel, The Wall Street Journal, December 2, 2003, A18. Week 10 (March 28-30) The Transnational Enterprise and the Ethical Dimension of Global Business (TNEs and Global Business Ethics): motivations for international expansion of TNEs; changing patterns of foreign direct investment (FDI); relations between TNEs and host states; corporate and managerial ethics. Balaam and Dillman, Chapter 17 CASE: Values in Tension: Ethics Away From Home (GPE coursepack). OPTIONAL: Roy Nelson, Intel s Site Selection Decision in Latin America (GPE coursepack) Week 11 (April 4-6) QUIZ #4 on Wednesday, April 6 Developing a Competitive Advantage: Managing Global Environmental Issues: five paradigms for analyzing environmental policies - frontier economics, environmental protection, resource management, eco-development, and deep ecology; also, the international environmental policy system as a framework for assessing international environmental agreements. Balaam and Dillman, Chapter 20 CASE: Mark Reedy and Richard M. Stiens, Clean Technology, Cummins Engine, and Pollution Regulation as Competitive Advantage (GPE coursepack). 5

6 Week 12 (April 11-13) QUIZ #5 on April 13 Managing Political Risk: analytical tools and concepts for country analysis. We will also discuss a capstone case to summarize key issues from the course as well as to introduce students to the practical aspects of analysis/evaluation of individual countries. Llewellyn D. Howell, Dealing With Political Risk: A Manager's Toolkit, pp in Political Risk Assessment: Concept, Method, and Management, The PRS Group, Inc., (GPE coursepack) CASE: Roy C. Nelson, Dell s Dilemma in Brazil: Negotiating at the State Level, Thunderbird Case Series, (GPE coursepack) Week 13 (April 18-20): Wrap-Up and Review Wrap-Up and Review No Assigned Reading FINAL EXAMINATION (during the regularly scheduled final exam week) 6

7 Course Alignment Matrix for GM GLOBAL POLITICAL ECONOMY Course Objectives Learning Outcomes Assessments To develop tools of analysis for understanding trends and developments in the global political economy Group Presentation To develop students abilities to use these tools to assess international economic institutions such as the International Monetary Fund, World Trade Organization, and World Bank Group Knowledge of the issues that affect the creation of sustainable economic and social prosperity worldwide (i.e., Global Citizenship) Group Presentation To develop analytical tools for assessing a country s foreign economic policy To introduce students to analytical frameworks for country risk analysis To develop an understanding of environmental and ethical issues that affect the strategy of global corporations Knowledge of the issues that affect the creation of sustainable economic and social prosperity worldwide (i.e., Global Citizenship) 7