Final POLI 381 Flashcards
International Political Economy
- Complex interplay between economics and politics on an international level.
- Relationships between private and public power as well as states and markets
- Economics: pursuit of wealth and Politics: pursuit of power
- Isolated from each other initially but the distinction was questioned in the 70’s because of the Bretton Woods System Crisis and Decolonization.
Examples of Politics Impacting the International Economy
#1) Bretton Woods System Crisis: 1944 Us abandoned convertibility of the US dollar in to gold (Gold Standard) Exchange rates became free flowing and the US dollar became the standard. #2) Decolonization: New groups of politically and economically weak states. New international order, collapse of communist order in East and Central Europe, want economic and political equality and opportunity.
Traditional Approaches to International Economics
-Mercantilism, Economic Liberalism, Marxism
Mercantilism
14th-17th Century
- Guiding prevailing approach as the state system emerged through the Treaties of Westphalia.
- Views of political elites drove building of the modern state. Economic activity should be subordinated to primary goal of building a strong state. Economic activity as a tool of politics and a basis for political power.
- Economic rivalry ——> benign mercantilism. Should look after their national economic interest (national security reasons) but do so in a way that does not have negative effects on the state.
- Malevolent or Aggressive: states exploit international economy through expansionary policy vis a vis other states Imperialism and colonialism.
- In either case, economic gain or activity is because of an increase in power. ***relative gains.
- Similar to realism in that it is concerned with power and transactional maximization.
- Politics dictate economic relations
- Main Actor: the state
- Nature of Economic Relations: conflictual and zero sum
- Economic goals: state power
Economic Liberalism
-Response to mercantilism.
-Bretton Woods
-Adam Smith in the Wealth of Nations: markets tend to expand spontaneously to satisfy human needs/desires- absent government interference. Invisible Hand to dictate market forces.
-Markets most efficient way of allocating resources, states should have a minimal role.
-Concept of rational individual actor and belief in progress.
-Economics is autonomous. Laissez-Faire freedom of markets from all kinds of political interference. State politics do need to set minimum underpinnings for them market to function properly (regulations).
-Keynesian (John Maynard Keynes) Still based on market economy but with a considerable degree of state interference and direction.
-Main Actors: individuals and private firms, rational, self-seeking, human prosperity thus depends on unfettered expansion of a free market economy across international boundaries.
Nature: cooperative, positive sum game. Ricardo’s Comparative Advantage
Goals: Maximize individual and social well being
Marxism in IPE
-Economic production is the basis for all other human activities, including politics.
-Basis consists of forces of production (technical level of economic activity) and the relations of production (social ownership)
-Bourgeoisie dominate capitalist economy through control of the means of production, also tend to dominate in the political sphere because economics is the basis of politics.
-States driven by ruling-class interests of respective bourgeoisie and capitalism as a system is never-ending in its search for new markets and more profit.
-Robert Cox: focus on materialism through the inclusion of ideas and institutions. Social forces, forms of state and world orders.
Social forces: shorthand for the process of capitalist production. An analysis of this aspect will inform us about the present state of development on the capitalist economy on a global scale.
-Forms of state: point to the ways in which states change in the interplay with the social forces of capitalist development.
-World Orders: current organization of IR, including those between major states and groups of states, international law an d international institutions
-Antonio Gramsci: World Systems Theory Core and Periphery
-Economics decisive
-Main Actors: classes
-Nature: conflict and zero-sum
-Goals: class interests
Rational Choice in IPE
-Explains outcomes in IPE as a result of actors’ choices which are assumed always to be rationally power or utility maximizing within incentive and institutional restraints.
Institutionalists in IPE
-Apply rational choice to states in interactions with other states to explain international cooperation in economic affairs.
Constructivism in IPE
-Pay attention to how governments, states and other actors construct their preferences, highlight the role of identity, belief, traditions and values.
Feminist IPE
- Ideas and structures and interests of IPE are gendered. For example the gendered division of labour
- More than trilogy of ideologies
- Common set of theoretical and conceptual pillars. Studies political economy through material capabilities, institutions and ideas.
Distribution of Wealth and Power in IPE
- Ideological underpinnings
- Interests and institutions that drive globalization: political interests controlled by corporations financial or otherwise. The rise of multinational corporations, TNC’s have enormous power.
- Tech revolution helping set the conditions for globalization as territory and distance are no obstacles.
- Control over tech is a key part of material capabilities
Hegemonic Stability
- Theory of hegemonic stability, must expect international markets to be dependent on the existence of a liberal dominant power where the hegemon is the dominant military and economic state. Necessary to create and develop liberal world market economy. No enforcement if no hegemon
- In order to perform its role, a hegemon must control raw materials, capital markets, competitive advantage and military power
Internationalization
- Increase in transactions among states reflected in forms of trade, investment and capital facilitated by inter-state agreementsb and domestic policies permitting private sector to transact abroad.
- Globalization has increased the speed of these transactions
Aspects of Globalization
1) internationalization
2) tech revolutions
3) deterritorialization
4) liberalization
Technology Revolutions
-Modern communications shrink distance. Location is less important for government (both local and regional) but also for other actors such as firms and social movements
Deterritorialization
-accelerated by a decrease in the influence of territorial places, boundaries and distances in the way people collectively identify themselves or seek political recognition. Permits transnational political and economic activity
Liberalization
-describes government policies that reduce the role of the state in the economy by dismantling trade tariffs, barriers and deregulating the financial secret to foreign investment and privatization.
Why is a Hegemon Required Liberal World Economy
- Public or collective good. Once supplied, benefits for everybody. Characterized by non-excludibility.
- Neo-liberal institutionalists: hegemon needed to establish economic world order but once set up staying power of their own, operate on their own and promote further cooperation even in circumstances of hegemonic decline.
Why is a Hegemon Required Marxist
- Agree you need a hegemon. Robert Cox: stable order based on shared values and understandings derived from dominant social strata of dominant state.
- US Economic hegemony based on material and values (soft power). Have a model of society that other countries find attractive.
- Also point to elements of inequality and hierarchy inherent in US hegemony.
- US hegemony as a vehicle of control over weaker states by the bourgeoisie. Liberal world economy is a misnomer for control of the world by western capitalist elite for own benefit.
Discontents with Globalization
- Outsourcing, loss of jobs
- Labour exploitation and conditions of forced labour
- Transnational migration can strip workers of rights and entitlements
Traditional Approaches to IPE True and False
Mercantilism
-true: political regulation is the framework for economic activity
-false: politics controls the economy
Liberalism
-true: market is an economic dynamic of its own
-false:the autonomous sphere of economy
Marxism
-true: economics affects and influences politics
-false: economics determines politics
Globalization of Trade and Finance
- enhanced national market integration since the crisis of the 1970’s
- pattern of interdependent economic flows.
- all countries not incorporated equally.
- intensity: degree of flow across economic borders. decrease or increase in volume
- extensity: geographical dispersal of contemporary trade. most obvious flow being foreign direct investment.
- speeding up and spreading out of global trade and global finance = globalization
- balance of power in global trade and finance is clearly a political process
International Trade
International Finance
- when one country’s citizens produce a good that another country’s consume. goods travel at least one border to connect site of production to site of consumption.
- activity on financial markets through advanced information technology networks. financial product flow is very complex. dwarfs global trade.
- speculation: represents bets placed on power of private financial institutions to force the movement in relative currency prices they most desire and bets placed against the governments ability to maintain a truly autonomy policy course in the face of disciplinary power of financial institutions.
Regulation of Global Trade
- Bretton Woods Conference and the Keynesian Economic Theory. Output not prices adjusted to global imbalances in trade resulting in cycle of reduced production and job losses.
- Priority: multilateral institution that would facilitate continual expansion of global trade.
- Experts not political communities decide regulations and objectives determined by countries financing the maintenance of the regulatory system.
- Politicized by conditionalities are requisites for loans. Western free market capitalism, ideological endorsement.
- Undermining interests and priorities that traditionally ascribed to governments under representative democracy.
WTO
- World Trade Organization: designed to embed free trade norms in international law. now it also oversees regulation of imports and exports and supposedly serves all members equally.
- Source of political tension. Advantage to industrialized countries. Not advantageous to textile and agricultural industries which is the main output of the majority of the developing world.
- Developing countries need to show foreign investors hat rule of law is established and investment success will be purely market drive. A way to do that is to join the WTO, ensures free trade rules internalized and a market based mindset. Lots of conditions to join, imposed by powerful members of WTO.
Transnational Actors
-Since 1970’s the number of non-state actors has increased but the international system is still largely state centric.
-Increase in individual and join participation in conflict and cooperation or other interaction with state actors.
Have influence in a state-centric world.
Non-State Actor
- Any and all entities that are not states.
- Individuals or organization that have significant political influence but are not allied to any particular country or state.
- But there is significant political influence
NGO’s
INGO’s
- Non Governmental Organizations operate within a single state. But non-state organizations operate across borders within the international system hence transnational non-state actors INGO’s
- NGO’s work for common good rather than for profit.
Types of Transnational Non-State Actors
- TNC’s
- INGO’s
- Religious groups
- Transnational Diaspora Communities
- TCO’s
- International Terrorist Organizations
TNC’s
- internationalization of economy. Today, difficult to see each state having its own separate economy.
- Financial flows and loss of sovereignty
- Regulatory Arbitrage and Loss of Sovereignty: a company transnational willing to become transnational can threaten to go someplace elsewhere tax structure, environment and regulations is more favorable. Reduces the state’s ability to control economic destiny.
- Companies leverage to get advantages from states results in competition between states.
- Extraterritoriality and sovereignty, different jurisdictions, different regulations. Who has legal authority
- Triangulation means that individual government’s can’t control their international trade.
INGO’s
- Have two forms: operational or advocacy based
- Operational: faster community based organizations within each country via different projects and operations
- Advocacy Based: primary purpose is to influence policy making of different countries’ governments regarding certain issues or to promote awareness.
- Many have both components
- Represent civil society vis-a-vis the state and the market. Moral rather than legal authority.
- Concern for global commons with valuable expertise, closer to the people meaning more acceptance and trust and respond in a more timely and effective manner.
- Institutionalized forms of transnational social movements
- Granted consultative status by the UN
Ways that INGO’s are Combined
- International
- Advocacy Networks
- Caucuses- brought into IR system itself
- Governance networks- resources that states provide
TCO’s
- Transnational Criminal Organizations
- Engaged in illicit economic activities such as drugs, arms or slavery
- Some resort to force (violence) to sustain economic activities.
- Impact of TCO’s: criminal financial flows are so massive that it threatens banks and other financial institutions. Trade is so diversified through triangulation that no government can claim their country isn’t a transit route. Police action may displace organized gangs to another country and illicit drugs and money laundering involve questions of extra territorial jurisdiction.
Terrorist Groups and Insurgents
- No universally accepted definition but a working definition: threat or actual use of violence to coerce an audience other than the immediate victims in furtherance of political goals. inspire fear by attacking civilians or symbolic groups.
- Spectrum of roles outside the violent act. Passive or hidden support, community activism, financing, leadership, technology, logistics and direct aid
- Communicative rather than attritional, draw attention to grievances.
- Not a single political force. Groups who resort to violence are often called terrorists to express disapproval or insurgents by those who are neutral and national liberation movements by their supporters.
- political violence more likely considered legitimate when there is widespread support, diplomatic/political channels closed to them, target government is exceptionally oppressive, violence is limited to military targets. Usually don’t achieve legitimacy.
Terrorism in History
4 Waves
- Anarchist (1870-1910)
- Nationalist (1920-1960)
- New Left/Marxist (1960-1980)
- Religious (1970-2020)
- Categories based on motivation imply cause this is not the case. Can be Anti-colonial, nationalist-separatist, revolutionary or counter revolutionary or religious.
- 1968-2001 emergence of transnational terrorism, expansion of commercial air travel, availability of televised news coverage, broad political and ideological interests among extremists intersect with common causes
Terrorist Profiling
- No correlation with mental illness despite the perception of people who engage in terrorist violence as crazy.
- Predictions from very limited data about the past. Small dataset without knowing, can’t predict anything
Responses to Terrorism
- Wilkinson’s 3 Choices for Democracies
1) Criminal Justice: minimum force, evidence based and the presumption of innocence
2) Military: maximum force, intelligence based, overt or covert
3) Political Exit: pseudo diplomatic negotiations, compromise
Challenges for Response to Terrorism
- Criminal v.s Military styles of response, not necessarily uniforms involved. Role of intelligence services. Military more circumstantial.
- Rely on military and drones
- Difficult to de-legitimatize what incites terrorists
- Most responses are unilateral and on an ad hoc basis.
- Categories are not rigid or exclusive, underlying assumptions may be contradictory. Differing standards for proof and guilt.
- Political exit is not a unilateral choice, all parties must want to negotiate
