1. Globalization Process that results in the economic and political interconnectedness of the world. Neoclassical Liberal Economic Theory – Reduce tariffs and trade barriers – Easier for free movement of goods and capital – Lifts wealth of all countries – Increased employment and income for LDCs.

2. FDI – Foreign Direct Investment – Invest in developing countries MNC – Multinational Corporations – Most important source of FDI

3. Unequal Development in LDCs “Haves” and “Have-Nots” among LDCs. “Race to the Bottom” – MNCs seek out cheapest place to do business. Few workers’ rights Little anti-pollution regulation Rapid urbanization Regional inequality within a country Gender inequalities

4. Globalization Market Failure – Those who produce and consume don’t bear full cost of their actions (i.e., pollution).

5. Sacrificing Sovereignty Sovereignty – Independent legal authority over a population. – State controlling its own territory.

6. Globalization Human Capital – Attributes gained by a worker through education and experience. International Non-Governmental Organization – Usually referred to as an NGO.

7. Costs of Globalization Costs Erosion of state sovereignty. Problems spread more easily over borders. – Crime, drugs, economic crises, disease. Labor is exploited by MNCs. Race to the Bottom Costs of rapid urbanization Gender inequality Backlash against “Americanization.” Brain Drain Market Failure Benefits Reduction of barriers makes economic transactions easier. Rapid economic growth. Global array of products at cheaper prices. Better access to information, technology, and capital. Spread democracy and human rights. Empower non-state actors.