Global Publics, Trade, and International Relations Concepts
Global Publics
Global publics are non-rivalrous and inclusive. Non-rivalry means one person’s use doesn’t diminish another’s. Inclusiveness means no one can be excluded from using them. A true global public good (GPG) is virtually universal, benefiting humanity globally. Examples include world peace and environmental preservation.
Prisoner’s Dilemma
The pursuit of self-interest doesn’t always benefit everyone, sometimes leading to the worst possible outcome.
Harmony vs. Conflict
Harmony
Countries pursuing their own objectives contribute to overall global goals, either by aligning their objectives or through selfless actions.
Conflict
Countries have conflicting interests and cannot cooperate to resolve differences.
Institutions
Institutions are established social relationships.
Realism and Institutionalism
These are two approaches to international relations. Realism focuses on relative gains, seeing the world in terms of conflict. Institutionalism emphasizes absolute gains, promoting cooperation. Realists believe a country won’t cooperate if another gains more, even if both gain absolutely. Institutionalists believe cooperation occurs if both countries gain absolutely.
International Trade Concepts
International Trade
Indirect productive exchange.
Intraindustry Trade
Trade of very similar products among countries.
Interindustry Trade
Trade between developing and developed countries, often involving manufactured goods, agricultural products, raw materials, and minerals.
Comparative Advantage
Each country should specialize in producing and exporting goods and services it produces relatively efficiently and import those it produces less efficiently.
Economies of Scale
The cost per unit decreases as production increases because fixed costs are spread over more products.
Economies of Scope (or Variety)
Arises when a company can produce multiple product types more cheaply together than separately.