Role-playing game Giovanni Marin Department of Economics, Society, - PowerPoint PPT Presentation

Role-playing game Giovanni Marin Department of Economics, Society, Politics Università degli Studi di Urbino ‘Carlo Bo’

Disclaimer: this is an ‘ experiment ’ (and you are my ‘ guinea-pigs ’) Spring 2017 Global Political Economy 2

Aim of the role-playing game • Demonstrate your understanding of the economic mechanisms behind economic globalization • Evaluate the possible implications of globalization on different ‘ interest groups ’ Spring 2017 Global Political Economy 3

Structure of the game • In the first place, I will present you a real ‘case’ of globalization by means of material retrieved on newspapers and magazines • Then, the class will be split in six groups , each representing an ‘ interest group ’ • Each group has to evaluate the case in the following dimensions – Why the ‘ globalization event ’ occurred – Which are the implications for your interest group – General judgement of the event Spring 2017 Global Political Economy 4

Structure of the game • Each group needs to draft a short press release to summarize their position about the ‘ globalization event ’ and present it to the other groups ( 2-3 minutes for each group) • After the first round of press releases, each group will comment on o ther groups ’ positions ( 2-3 minutes for each group) Spring 2017 Global Political Economy 5

Create the six groups! Spring 2017 Global Political Economy 6

Interest groups A. Management in the headquater of the multinational firm B. Central government (of the host country) C. Local government (of the host region) D. Trade unions (of the host country) E. Employers ’ federation (of the host country) F. Trade unions (of the home country) Spring 2017 Global Political Economy 7

8 http://www.reuters.com/article/us-ge-italy-idUSKCN0V90XX

Spring 2017 Global Political Economy 9

GE in Italy • GE is present in Italy since 1912 • The Italian GE branch ‘ Nuovo Pignone ’, near Florence , was acquired from ENI (the Italian oil company founded by Enrico Mattei after WWII) in 1993 – Privatization of ENI – At the time, commentors were worried for the possibility that GE just wanted to ‘ destroy ’ its Italian competitor in the development and production of machinery for the Oil&Gas sector – Other commentors were just worried that ENI was underselling one of its strategic assets • Now, Nuovo Pignone is the world ‘ headquarter ’ of GE for the division ‘ Oil&Gas ’  this is the only case of non-US headquarter for GE divisions Spring 2017 Global Political Economy 10

A. Management in the headquarter of GE • Describe the objective of the investment and the short and medium term expectations about the development of the business • Explain why GE decided to increase its presence in Italy and why exactly in the Oil&Gas sector Spring 2017 Global Political Economy 11

B. Central government (Italy) • Motivate why the government invested as much as 200mln euro on this private project • Explain why this investment is going to bring substantial net benefit for Italy as a whole Spring 2017 Global Political Economy 12

C. Local government (Region Toscana) • Discuss which are the reasons why GE choose Toscana as the destination of the investment • Discuss the expected gains from the investment for the local economy Spring 2017 Global Political Economy 13

D. Trade unions (in Italy) • Discuss which are the expected gains for Italian workers (and which types of workers) • Identify the possible risks of this investment (hint: competition with ‘100% Italian ’ companies that would re-invest their profits in Italy) Spring 2017 Global Political Economy 14

E. Employers ’ federation in Italy • Discuss which are the opportunities for Italian firms coming from this FDI • Motivate a critique to the central and local governments for investing taxpayers ’ money for facilitating investments of non-Italian companies Spring 2017 Global Political Economy 15

F. Trade unions (in the US) • Motivate a critique to GE for not investing in the home country and to the US government for not offering the same conditions as the Italian government • Try to find some positive returns for US workers from the GE’s investment in Italy Spring 2017 Global Political Economy 16