Glossary

Find definitions of the key terms and concepts in World Politics New Review in alphabetical order below.

Common Pool Resources
Also referred to as common property resources, are resources which are said to exhibit rivalry but not excludability. In other words, because of characteristics like their size, common pool resources can be depleted but it is difficult to exclude potential users from obtaining benefits from their use. Examples of common pool resources include fisheries, irrigation systems, forests, and the atmosphere. Fisheries, for example, contain a limited number of fish which can be depleted as a result of over-exploitation of fishing grounds. But because of the size of the oceans, restricting access to fisheries is difficult at best. Management of common pool resources often presents a collective action dilemma.

Deterrence
A strategy in which the threat of retaliation effectively precludes an attack. The theory is widely cited in the context of nuclear weapons that suggest that countries would be unlikely to use nuclear weapons in a conflict against another country with nuclear weapons because of the high cost of retaliation. During the Cold War, this was often referred to as Mutually Assured Destruction.

Eurozone
The 16 member states within the European Union that use the euro as the only legal tender. The Eurozone is comprised of:  Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain.

Exchange Rate
Also referred to as the foreign exchange rate, the forex rate, or the FX rate, the exchange rate is the value of one currency priced in another currency. For example, if £1 costs US $1.50, the exchange rate is 1:1.50. Exchange rate regimes may be fixed or floating. Until 1971, the US dollar was pegged to the value of gold and most major international currencies were pegged to the value of the US dollar. But since 1971, most major international currencies have been allowed to float. In other words, the value of currencies is determined primarily by the market (by what someone is willing to pay for that currency) rather than by being backed by tangible assets like gold.

Failed State
A state which is no longer able to provide the political goods demanded by its people and which no longer exercises sovereignty in terms of the monopoly on the legitimate use of physical force over its territory.

Foreign Direct Investment
Foreign direct investment, or FDI, is usually understood as a company in one country purchasing production facilities in another country.  FDI can be contrasted with public sector assistance (foreign aid).

Government of National Unity
An alliance which seeks to incorporate all political factions or parties into a single government in the legislature. Unity governments are most commonly used during wars (such as in the United Kingdom during World War I and II) or as a mechanism to address longstanding political, ethnic, or religious divisions (such as in Kenya in 2008 or in Lebanon regularly throughout its history).

Gross Domestic Product
The total value of goods and services produced in an economy in a given year. Gross domestic product, or GDP, is perhaps the most widely used measure of the wellbeing of an economy.

Head of Government
The individual or office that serves as the chief officer of the executive branch of government. In parliamentary systems, the office is usually (though not always) referred to as Prime Minister, while in presidential systems the office is often fused with the head of state position in to the office of the President.

Head of State
The individual or office that serves as the public face of the country. According to French President Charles de Gaulle, the position should serve as the “spirit of the nation.” In constitutional monarchies, like the United Kingdom, the reigning monarch usually serves as head of state, while the elected representative of the people (selected either by direct vote of the people or though the national legislature) serves as head of government.

Political Goods
Those intangible goods demanded by the people of the government which provide the foundation for the development of political cultures. Examples of political goods might include security, a legal system, health care, education, infrastructure, and a money and banking system.

Proportional Representation
A voting system in which seats in the legislature are distributed according to the percentage of the vote received. For example, a party which receives 25 percent of the vote would receive approximately 25 percent of the seats in the legislature.

Social Capital
The networks of trust and reciprocity between individual members of a community. These connections are often viewed as being a requirement for the maintenance of democratic political institutions.

Subsidy
A payment by a government to a producer or distributor. Many subsidies are trade distorting, encouraging over-production and effectively lowering the cost of production of a good. As a result, under the rules of the World Trade Organization, most subsidies are illegal.

Territorial Integrity
The principle in international law which suggests that secessionist movements should not, in general, change the national borders of an existing state.

Washington Consensus
The common policy prescriptions that underlie reform packages promoted by the International Monetary Fund and the World Bank. The consensus normally includes ten specific policies, including fiscal discipline, redirecting public expenditures, tax reform, liberalization, privatization, and deregulation. In recent years, the term has increasingly been used to refer to the market fundamentalism associated with such policy prescriptions.

World Economic Forum
A foundation established in 1971 and based in Davos, Switzerland, which brings together the world’s top business leaders, political leaders, and selected academics and journalists to discuss the most important issues facing the global economy.

World Trade Organization
The World Trade Organization was created out of the final round of the General Agreement on Tariffs and Trade in 1995 to oversee the liberalization of international trade. As of 2008, it had 153 member states and 30 observers, collectively accounting for more than 95 percent of all global trade.