Social Institutions. How do the institutions in society affect you?. Social Institutions. Structures to provide stability to social life as well as mechanisms to assert authority, power, and control. Family Education Criminal Justice Religion Government Economy. Things to think about.
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Social Institutions How do the institutions in society affect you?
Social Institutions • Structures to provide stability to social life as well as mechanisms to assert authority, power, and control. • Family • Education • Criminal Justice • Religion • Government • Economy
Things to think about • Be able to tell the difference between the World Bank, International Monetary Fund and World Trade Organization. • What were the policies of the IMF, and how did they affect Argentina? • How have the goals of the World Bank and IMF affected Nicaragua?
Global Political and Economic Institutions • World Bank (International Bank for Reconstruction and Development) • International Monetary Fund (IMF) • World Trade Organization (WTO)
Origins of the World Bank, IMF and WTO • These institutions arose out of the plans by the US to avoid financial crisis after WWII. • World Bank was to give loans to reconstruct Europe, but gave loans to poor countries instead. • IMF gives loans and advice for dealing with short term financial crisis. • Global Agreement on Tariffs and Trade (GATT) became World Trade Organization (WTO) in 1996.
Global Political and Economic Institutions • International Bank for Reconstruction and Development (World Bank) • Loans for “development” projects to encourage economic growth. • http://www.worldbank.org/ • International Monetary Fund (IMF) • Deals with short-term economic crisis through loans and restructuring a nation’s economy. • http://www.imf.org/external/index.htm • World Trade Organization (WTO) • Oversees trade between nations to encourage the free flow of goods and growth of economies • http://www.wto.org/
Goals of WB, IMF, WTO and Neoliberalism • Encourage economic growth through the removal of barriers to trade. • Reduce expenses on social and governmental expenditures • Sell off (privatize) state property such as natural resources, electricity and water to private companies • Cut social services and education (in some cases) • Cut health care expenditures and begin fees for care • Eliminate subsidies for basic foods • Encourage competition with global companies to “get prices right” • Focus your economy on “comparative advantage” • Produce one, or a few, products for export • Reduce tariffs and price subsidies on goods • Discourage unions
IMF Suggestions for Argentina • Cut Government Services • Privatized State Industries (electricity, etc.) • Reduced Social Services (unemployment etc.) • Cut Government Employees • Less Government Control and Regulation of Economy • Welcomed Global Corporations • Borrowed Billions from Foreign Banks • Encouraged Exports (Milk, Soy, Wheat) • Replaced Local Manufacturers • Purchase Daily Needs from Global Market
Results of IMF Policies • No More Government Properties to Sell Off • Defaulted on Debt and Economy Crashed • Relative Size of Argentina’s Economy (GDP) • Compared to the rest of the nations in the world • 1970 = 19th • 1980 = 25th • 1990 = 23rd • 2001 = 17th • 2006 = 31st
Nicaragua • Debt incurred by the dictators of Nicaragua still had to be repaid. • Country devastated by war with “contras” who were illegally supported by US. • Economic crisis arose from falling coffee prices and a bank scandal like US S&L crisis. • IMF imposed conditions that forced the country to focus on repaying debt to the wealthy in Nicaragua and eliminated pay increases for teachers and public employees.
Nicaragua • Nicaragua is now the poorest country in Latin America with the highest rate of debt per person. • It spends 2 and a half times more on debt repayment than on health and education combined. • Over half of the population live below the poverty line • Two fifths of poor children are malnourished • Three quarters of the poor live in rural areas, and half of these are extremely poor, unable to meet their daily food needs
Example of a Social Institution World Trade Organization
Goals of the WTO • Remove any barriers to trade to allow goods and money to flow more freely between countries • The WTO not only rules on trade barriers, but also "non-tariff" barriers to trade such as environmental regulations, food standards and intellectual property rights. • Countries must use the "least trade restrictive rule" when developing laws or standards according to the WTO.
Rulings of the WTO and GATT • Dolphin-safe tuna • Asbestos ban in France • Labeling of genetically engineered food