Who is in Control of the International Financial System
Write a critical essay responding to one of the following large-scale questions:
• ‘What is wrong with global economic governance, and what is right with it?’ In your answer to this question draw on a variety of readings in class and provide your unique answer. Make sure to establish first in your essay just how you think the global economy is governed, before you turn to evaluating it on your own terms.
• ‘How does the operation of the global trading system help to understand how political power really works in the global economy?’
• ‘Do global markets constrain the policy options of states?’
• ‘Who is in control of the international financial system?’
• ‘Can the operation of global economic governance be changed from the activities of civil society? If so, how? If not, why not?’
• “Is it international organizations or the elites that make decisions within them that ultimately govern the global economy?”
• Your own specific research question related to the big themes of the class.
Note that, because this is a higher risk strategy for the final paper, you will have to get this approved by the instructor before you can go forward with it, at least two weeks before the deadline.
The final paper should be between 4-5 pages long, 1.5-spaced, including bibliography and footnotes. There is no particular format of bibliography/citations but please stick to one of the predominant methods/style and be consistent.
This paper is an opportunity for you to apply your new knowledge of IPE and your new analytical skills to a topic of your choice in the field of IPE. You are expected to draw primarily from the course readings but going beyond them is certainly welcomed when appropriate (though not required). The key to the essay is the strength of your argument in answering the question at hand. Focus on the argument’s clarity, your use of evidence, and your demonstrated knowledge of IPE. You are welcome to send the instructor a 1-page outline of their final paper, which is designed to ensure that their research is on track and to ensure that students receive helpful feedback at an early stage. This outline, which is usually in point form, sets out the topic the student wishes to write about, a basic outline of their argument, as well as a list of sources/bibliography. This is not a requirement of the course but you may find it helpful. If you are planning on sending an outline, please do so at least a week before the due date.
Final Paper
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Final Paper
Over the years, the international financial system (IFS) debate has grown significantly. Even though there are people who have shown interest in this debate, there are other people who do not understand what IFS is. IFS consists of interest and return-bearing assets, financial markets, and nonbank financial institutions, which usually trade and help control asset prices and non-market activities where the financial assets exchange happens. Since most people acknowledge that the IFS is critical, they are usually curious about how it is controlled. This reason prompts the individuals to ask who controls the IFS. Governments, multinational corporations, international financial institutions, central banks, and non-state players control IFS.
Government plays a critical role in controlling IFS. For example, the decision of a nation to globalize its financial capital or function within an open economy has monetary impacts evident in the balance of payments. Furthermore, the stability of the government is likely to affect international finance. In most instances, the political deterioration will likely negatively affect the international finance systems since the country will not function optimally (Gilpin, 1971). There are also other instances where political regime changes impact trade reforms (Milner & Kubota, 2005). Similarly, if various governments engage in unreasonable foreign controls, it could hurt the international finance systems. Similarly, the legal uncertainties regarding investments and property rights will hurt the global financial system. For example, weak intellectual property rights could discourage peoples' creativity since individuals would worry about losing their ideas to others. Furthermore, there are instances where there is a global financial system looking forward to attaining greater stability government has a critical role in employing policies that will help to attain regional and national needs. One of the government's policies regulating the international financial systems is controlling the financial banks. If the governments employ the wrong policies, it would likely cause global financial catastrophes, negatively affecting the IFS.
Multinational corporations also affect the IFS. Since 1950, multinational corporations have grown and prospered by a huge margin (Krasner, 1976). One important feature of multinational corporations is that they are within more than one nation. This feature usually helps these firms to be powerful and active political actors compared to most domestic firms. For example, the industry's most productive and largest firms usually favor large-scale trade, which helps the international financial systems develop. Furthermore, since these global firms have greater financial resources, there are some instances where they use these resources for political influence, which helps to make profitable investments. For example, whenever they are set up in a region, they always help to improve the transportation, communication, economics, ideas, and labor within the region. These measures usually help in boosting the economic aspects of international financial funds. There are also other instances where these corporations shape other countries' policies by applying roundabout methods. For example, there are instances where they engage in foreign direct investment, which is attained whenever the corporation gains controlling interest within a foreign company. This process would help the multinational corporation indirectly affect varying economic policies globally. Moreover, since these corporations are few and have large benefits, they usually avoid collection collective action problems.
International financial institutions also play a critical role in controlling IFS. Even though most people overlook international financial institutions' duties, these institutions play a critical role in managing the IFS. For instance, every year, th...