AP Comparative Government Unit 5 Review: Political & Economic Change in Development

Economic globalization means growing interconnected networks, a worldwide market that crosses political borders, and reduced state control over economies. International organizations push liberalization, MNCs reshape local economies, and social media accelerates cultural and political change. These forces can expand middle classes but also deepen inequality and fuel nationalist or populist backlash.

• IMF, World Bank, WTO: Membership in these organizations promotes economic liberalization policies; China and Nigeria have both enacted such policies under their influence.
• Multinational corporations (MNCs): MNCs operate across borders, can challenge a host government's economic principles, and sometimes provoke cultural backlash against Western influence.
• Middle-class growth in Mexico: Economic liberalization policies, including NAFTA/USMCA, contributed to middle-class expansion in Mexico, a concrete AP example of liberalization's benefits.
• Social media and political mobilization: Technological forces enable citizen organizing and protest but also prompt governments to restrict digital access to maintain control.
• Nationalist and populist responses: Globalization's disruptions, including job displacement and cultural change, have strengthened nationalist and populist movements across course countries.

Governments choose how much private or state control to allow over industry and natural resources. These choices reflect both economic goals and regime priorities. The AP exam expects you to compare specific policy choices across course countries and explain why governments made them.

• China's special economic zones (SEZs): Coastal zones like Shenzhen attract FDI with tax incentives and relaxed regulations while the state retains overall economic control.
• Mexico's Pemex privatization: The 2013 energy reform opened Mexico's oil industry to private and foreign competition, reversing decades of state monopoly.
• Nigeria's NNPC joint ventures: Nigeria's state oil company collaborates with Shell, Chevron, and others through joint ventures rather than full privatization.
• Russia's re-nationalization: Putin reversed post-Soviet privatization by re-nationalizing oil and gas industries and limiting foreign investment, exemplified by the Yukos affair.
• Private control spectrum: The UK allows the most private control of natural resources among course countries; China allows the least, with others falling between these poles.

Globalization challenges regime sovereignty through FDI pressures, cultural backlash, environmental degradation, and international sanctions. Economic liberalization, the reduction of state economic roles through privatization, tariff cuts, and subsidy removal, is the main policy response, but it produces mixed results including growth alongside inequality and corruption.

• Sovereignty challenges from FDI and MNCs: Foreign investment can conflict with a government's economic principles; cultural imports accompanying trade can provoke domestic backlash.
• Economic sanctions: Foreign governments use sanctions, UN condemnation, and treaty pressure against countries whose actions, including human rights violations, offend them; Iran and Russia are key examples.
• Economic liberalization defined: A state reduces its economic role by eliminating subsidies and tariffs, privatizing state-owned industries, and opening to FDI.
• Neoliberal policy trade-offs: Liberalization can reduce inflation and raise national income but also increases wealth inequality, fuels corruption, and exacerbates social tensions.
• Structural adjustment programs (SAPs): IMF loan conditions requiring privatization, tariff reduction, and subsidy cuts; Nigeria accepted SAPs in the 1980s with mixed economic results.

International organizations like the IMF and World Bank influence policy through loan conditionality. Supranational organizations like the EU, WTO, and ECOWAS hold actual sovereign powers over member states and can compel policy changes. The key distinction is that supranational bodies override national law; international bodies only attach conditions to assistance.

• IMF conditionality: Countries receiving IMF assistance must agree to structural adjustment programs: privatize state companies, reduce tariffs, and cut domestic subsidies.
• Import substitution industrialization (ISI): A development strategy that raises tariffs and encourages domestic production to reduce foreign dependency; conflicts with WTO free-trade rules.
• EU supremacy: EU law takes precedence over member-state law; the EU can pressure governments on trade, regulation, and human rights through the Court of Justice.
• ECOWAS: A supranational organization of West African states with sovereign powers over members; can pressure policymakers to liberalize trade.
• WTO dispute settlement: The WTO can rule against member-state trade barriers and compel compliance, directly limiting national economic sovereignty.

Governments adapt social policies on gender equity, health care, and education both to improve citizens' lives and to maintain political legitimacy. The AP exam uses Iran, Mexico, and Nigeria as the primary country examples for this topic. Social welfare programs also serve as tools of legitimacy when economic liberalization creates new inequalities.

• Iran gender policy: Women can vote and serve in the Majles and cabinet, but face restrictions on university degree programs and attendance at sporting events; the Guardian Council limits women's candidacies.
• Mexico gender quotas: Mexico requires gender parity in political party candidate lists; abortion policy varies by state, with Mexico City legalizing abortion in 2007.
• Nigeria education inequality: Access to education is unequal between northern and southern Nigeria, with the north showing lower female enrollment rates.
• Social welfare and legitimacy: Programs like Mexico's Prospera conditional cash transfer reduce poverty and build regime legitimacy, especially when economic liberalization increases inequality.
• Health care policy adaptation: Governments implement health care reforms to respond to economic and demographic pressures; Mexico's Seguro Popular expanded coverage to uninsured populations.

Rapid industrialization creates pollution, public health crises, and political pressure to regulate. Governments respond by relocating factories, subsidizing green technology, mandating cleaner vehicles, and building infrastructure. Trade liberalization affects domestic business growth, FDI levels, exchange rates, and population movement, often requiring austerity measures as a condition of international support.

• Factory relocation and green subsidies: Governments physically move polluting factories and subsidize green technology adoption to address air quality and public health problems from industrial emissions.
• Vehicle emissions mandates: Laws requiring conversion to hybrid or battery-powered vehicles address urban air pollution from auto and industrial emissions, a policy relevant to China's major cities.
• Trade liberalization effects: Opening trade affects domestic business growth, FDI inflows, exchange rates, and internal population movement as workers follow economic opportunity.
• Austerity measures: Governments cut public spending and raise taxes to address deficits, often as a condition of IMF assistance; austerity can reduce services and increase social tension.
• Environmental degradation and legitimacy: Pollution and health crises from industrialization alienate citizens and challenge regime legitimacy, forcing governments to respond with regulation or infrastructure investment.

Population movements, including rural-to-urban migration, brain drain, and cross-border migration, are driven by economic opportunity, government policy, and land-use changes. These shifts deepen regional inequality, strain government resources, and create political tensions. Each course country has a distinct demographic story the AP exam expects you to know.

• China's rural-to-urban migration: China's shift from agriculture to industry and the creation of SEZs drove massive migration from rural interior regions to coastal cities, creating a large floating population.
• Hukou system: China's household registration system restricts rural migrants' access to urban services and employment, regulating urbanization but deepening inequality between registered and unregistered residents.
• Brain drain: Skilled and educated workers emigrate from countries like Iran and Nigeria to seek better opportunities abroad, reducing human capital and weakening domestic institutions.
• NAFTA-driven migration in Mexico: Removal of agricultural subsidies under NAFTA displaced rural Mexican farmers, driving internal migration toward maquiladora zones and northward migration toward the US border.
• UK immigration and political tension: Positive net migration into the UK created social and political tensions that contributed to the rise of anti-immigrant parties and ultimately to Brexit.

Rentier states derive a large share of government revenue from oil and gas exports rather than citizen taxation. This reduces accountability to citizens and creates the resource curse: lack of diversification, revenue volatility, currency overvaluation, rising inequality, and corruption. Iran, Nigeria, and Russia are the core AP examples.

• Rentier state: A state that funds government programs primarily from natural resource exports or leasing rather than taxing citizens; Iran, Nigeria, and Russia are the course examples.
• Resource curse: Oil wealth leads to lack of diversification, revenue swings tied to world prices, currency overvaluation, inequality, corruption, and reduced incentive to modernize or cooperate with international bodies.
• Dutch disease: Resource wealth causes currency appreciation and inflation, making non-resource sectors like agriculture and manufacturing uncompetitive and reducing economic diversification.
• Reduced governmental accountability: Because rentier states do not rely on citizen taxation, governments face less pressure to be accountable to citizens, weakening democratic institutions and transparency.
• Nationalization vs. privatization of oil: Course countries differ: Russia re-nationalized under Putin, Nigeria uses NNPC joint ventures, Mexico opened Pemex to private competition, and Iran maintains state control of oil.