Study smarter with Fiveable
Get study guides, practice questions, and cheatsheets for all your subjects. Join 500,000+ students with a 96% pass rate.
When you encounter questions about global governance on the AP exam, you're being tested on more than just what these institutions do—you need to understand why they exist and how they reflect different approaches to managing the international economy. These organizations embody key concepts like liberal institutionalism, collective action problems, and the tension between national sovereignty and global cooperation. Each institution represents a specific response to challenges that no single state can solve alone: financial crises, trade disputes, development gaps, and labor exploitation.
Don't just memorize acronyms and founding dates. Instead, focus on what problem each institution was designed to solve, who holds power within it, and how its structure reflects broader debates about economic governance. Ask yourself: Is this institution about stability, development, rules-based trade, or coordination among powerful states? That conceptual framing will serve you far better on FRQs than a list of facts ever could.
These institutions exist because economic crises spread across borders. When one country's currency collapses or banks fail, the contagion can destabilize entire regions. The underlying principle is that global financial interdependence requires global financial management.
Compare: IMF vs. BIS—both address financial stability, but the IMF intervenes directly with countries in crisis while the BIS coordinates among central banks to prevent crises. If an FRQ asks about responses to the 2008 financial crisis, both are relevant but played different roles.
These institutions focus on long-term economic growth in lower-income countries. The core mechanism is channeling capital and expertise from wealthy nations to fund projects that recipient countries couldn't finance alone.
Compare: World Bank vs. Regional Development Banks—both fund development projects, but regional banks offer borrowers more ownership and may better understand local contexts. The tradeoff is smaller resource pools and potentially less technical expertise.
These institutions create and enforce the rules governing international commerce. The mechanism is reducing uncertainty: when countries know the rules and trust they'll be enforced, they trade more freely.
Compare: WTO vs. UNCTAD—both address international trade, but the WTO writes binding rules while UNCTAD advocates for developing countries within (and sometimes against) those rules. This reflects the tension between trade liberalization and development priorities.
These forums bring together the world's most powerful economies to align policies. The logic is that when major economies coordinate, they can address collective action problems that formal institutions struggle to solve.
Compare: G7 vs. G20—the G7's smaller membership allows faster consensus but excludes rising powers; the G20 is more representative but harder to coordinate. The shift from G7 to G20 prominence after 2008 illustrates changing global power dynamics.
This institution addresses the human dimension of economic globalization. The mechanism is establishing international norms that pressure governments and employers to protect workers.
Compare: ILO vs. WTO—both set international standards, but the WTO can authorize trade retaliation for violations while the ILO relies on moral pressure. This reflects the ongoing debate about whether labor standards should be linked to trade agreements.
| Concept | Best Examples |
|---|---|
| Financial crisis response | IMF, BIS |
| Long-term development lending | World Bank, Regional Development Banks |
| Trade rules and enforcement | WTO |
| Developing country advocacy | UNCTAD, ILO |
| Major economy coordination | G7, G20, OECD |
| Public-private governance | WEF |
| Labor and social standards | ILO |
| Central bank cooperation | BIS |
Which two institutions both address financial stability but operate at different levels—one lending to countries, one coordinating among central banks?
How does the voting structure of the World Bank differ from UNCTAD, and what does this reveal about power dynamics in global economic governance?
Compare and contrast the WTO and ILO in terms of their enforcement mechanisms. Why might developing countries view these institutions differently?
If an FRQ asked you to explain how global economic governance has evolved to include emerging economies, which institutions and forums would you discuss, and what evidence would you cite?
A question asks about tensions between trade liberalization and other policy goals. Which pair of institutions best illustrates this tension, and what specific disagreements exist between their approaches?