Readings Flashcards
1
Q
Krasner 1976
State Power and the Structure of International Trade
A
- The degree of openness in international trade is determined by the state’s actions to maximize national goals, such as aggregate national income, political power, social stability, and economic growth.
- The hegemonic state will have a preference for an open structure because it will increase its aggregate national income, social stability, economic growth and political power
- The state remains the primary actor in shaping international trade, despite the growing influence of non-state actors such as multinational corporations.
- system of many small developed states -> open trading structure bc aggregate income and and economic growth increase
- system of few large but unequally developed states -> likely closed trading structure as open structure can created vulnerabilities and social instability
2
Q
Chang 2003
Kicking away the Ladder: Infant Industry Promotion in Historical Perspective
A
- currently developed countries used protectionism and interventionist policies to grow their economies, and are now promoting free trade and deregulation for developing countries.
- This is hypocritical and denies developing countries the same opportunities that developed countries had.
- Free trade and deregulation are not universally applicable policies and may not be appropriate for all countries at all times.
- State intervention is necessary to promote economic development and protect infant industries.
- Developing countries should be allowed to use protectionist measures and state intervention to promote their own economic development.
- Historical evidence supports the effectiveness of state intervention and protectionist policies in promoting economic development.
3
Q
Watson
Historicizing Ricardo’s comparative advantage theory
A
- the theory was developed in a specific historical context and was influenced by Ricardo’s own experiences as a wealthy British landowner and investor in the textile industry.
- Ricardo’s theory assumes that factors of production (such as labor and capital) are immobile and cannot move between countries, which is not an accurate representation of modern economic reality.
- The theory also assumes that trade is purely voluntary and mutually beneficial, which may not be the case when one country has more bargaining power than another.
- Critics of the theory argue that it is used to justify unequal trade relationships, with developing countries exporting raw materials and importing manufactured goods from developed countries.
- By historicizing the theory of comparative advantage, Watson aims to show that it is not a timeless or universal principle, but rather a product of a specific historical context and economic system.
4
Q
Rogowski 1987
“Political Cleavages and Changing Exposure to Trade”
A
- the relative power of interest groups + the degree of overlap between their interests and those of the broader society, can determine whether a country adopts an open or closed trade policy
- increased exposure to trade can create winners and losers within society, potentially shifting the balance of power between different groups and altering the political landscape.
Eg: he suggests that an increase in trade may benefit export-oriented industries and their workers, while harming import-competing industries and their employees.
Urban-Rural vs Class cleavage
Factor-based model
- Advanced economy with labor scarcity: only labor-intensive industries will seek protectionism
- Advanced economy with land scarcity: rural areas will seek protectionism
- Backward economy with labor + capital scarcity: capitalists and workers seek protectionism
- Backward economy with land + capital scarcity: landowners and capitalists will seek protectionism
5
Q
Frieden 1988
“Sectoral Conflict and Foreign Policy”
A
- sectoral conflicts can create domestic political pressure that influences foreign policy decisions eg: US interwar period
-> 1930s crisis/depression and destruction of overseas competitors led to internationalist and victory that allowed for American-led intl. political economy
- strength of sectoral interests can vary depending on the level of economic integration with the rest of the world.
- In countries with a high degree of trade openness, sectoral interests are more likely to be aligned with broader national interests - Power of Collective Action
- In more closed economies, sectoral interests can be more powerful and potentially disruptive to foreign policy decision-making -> Autocracies
6
Q
Katzenstein 1985
Small States in World Markets
A
- Small states face unique challenges in the global economy due to their limited resources and lack of bargaining power.
- Small states adopt different strategies to survive and thrive in the global economy, such as specialization in niche markets or diversification of their economies.
- Small states often rely on alliances and regional integration to increase their bargaining power and access to markets.
- Small states can also use non-economic factors such as their political stability, social welfare programs, and environmental policies as competitive advantages.
- Globalization and the increasing power of transnational corporations pose significant challenges to small states, as they may undermine local industries and exacerbate economic inequality.
- Small states should engage in active diplomacy and build strategic partnerships to navigate the changing global economic landscape.
7
Q
Bhagwati et al 2003
Trade and Poverty in poor countries
A
- trade liberalization and increased international trade are key factors in reducing poverty in developing countries.
- trade openness leads to increased economic growth and job creation, which in turn reduces poverty by providing people with greater opportunities for employment and income.
- criticize the view that trade liberalization harms poor countries by exposing them to competition from more advanced economies, arguing that this competition is necessary to promote economic growth and technological progress.
- protectionist policies, such as import tariffs and subsidies, are harmful to developing countries by distorting market incentives and discouraging competition.
- acknowledge that trade liberalization can have some negative effects on specific sectors or groups within a country, but argue that these effects can be mitigated through appropriate policies such as investment in education and infrastructure.
8
Q
Sen et al 2009
The Political Economy of Trade Policy
A
- Trade policy is inherently political, involving complex negotiations between various interest groups, and is shaped by domestic political institutions and international bargaining power.
- The distributional effects of trade policy are often overlooked, with winners and losers in society affected differently by changes in trade policy.
- The optimal trade policy for a country depends on its political economy, including the interests of various groups such as consumers, producers, and labor.
- The role of international organizations such as the World Trade Organization (WTO) in shaping trade policy has increased over time, but this has also led to concerns about the erosion of national sovereignty and democracy.
- Trade policy can have both economic and political objectives, with governments using trade policy as a tool to pursue foreign policy goals and to signal their domestic policy priorities.
- The effectiveness of trade policy in achieving its objectives depends on various factors, including the level of trade openness, the structure of the domestic economy, and the global economic environment.
9
Q
Narlikar 2022
How not to negotiate
A
- critiques the current state of international negotiations, particularly in the area of trade, arguing that negotiations have become increasingly complex and opaque, making them difficult for many actors to engage with.
- argues that this complexity is largely due to the rise of interest-based negotiations, which prioritize the interests of powerful actors and leave smaller actors with little room for maneuver.
- proposes a return to more rule-based negotiations, which are grounded in clear principles and allow for greater transparency and participation from all actors.
- also argues that negotiators should be more willing to walk away from negotiations if they are not achieving their goals, rather than simply accepting a bad deal.
- calls for greater accountability and transparency in negotiations, including the establishment of clear rules for reporting on negotiations and for evaluating their outcomes.
10
Q
Linsi 2021
Slowbalization
A
- COVID-19 has led to a shift in global production towards a “slowbalization” model, characterized by greater regionalization and localization of production.
- The political economy of global production has changed due to the pandemic, with governments playing a greater role in regulating and coordinating production.
- the more important change in response to the pandemic is a commitment to diversify (and, for Western MNCs at least, especially to diversify away from China) rather than to reshore (bring back home) production
- the pandemic crisis may even end up generating more, not less, cross-border integration of production, even if within increasingly bifur- cated economic spheres
11
Q
Newman et al 2022
Weak links
A
- Weak links in finance and supply chains are vulnerable to disruption and exploitation, making them an attractive target for state and non-state actors seeking to achieve geopolitical goals.
- The increasing interconnectedness of the global economy has made it easier for these actors to exploit these vulnerabilities, using tactics such as sanctions, tariffs, and cyber attacks.
- Addressing these vulnerabilities requires greater attention to supply chain resilience, diversification, and redundancy, as well as improved coordination and regulation at the national and international levels.
12
Q
Foroohar 2022
After Neoliberalism
A
- The failures of neoliberalism have led to a renewed focus on local economic development, as policymakers and businesses seek to address inequality and promote sustainable growth.
- The COVID-19 pandemic has accelerated this trend, highlighting the importance of local production, resilience, and self-sufficiency.
- The shift towards local economic development has implications for global trade and investment, as well as for the relationship between the state and the market.
13
Q
Rajan 2023
The Gospel of Deglobalization
A
- The costs of globalization have led to a backlash against it, with some advocating for deglobalization as a way to address inequality, environmental degradation, and other challenges.
- While there are benefits to deglobalization, such as increased resilience and self-sufficiency, there are also costs, including reduced economic growth and increased geopolitical tensions.
- Policymakers need to carefully balance the costs and benefits of deglobalization, taking into account the complex interactions between the global economy and other social, political, and environmental systems.
14
Q
Rodrik + Walt 2022
How to build a better Order
A
- argues that the current global order is facing several challenges and that building a better order is necessary for addressing these challenges.
- main challenges facing the current order: rising nationalism, great power competition, the erosion of democratic norms, and the need to address global issues like climate change and pandemic response.
- building a better order requires a set of guiding principles, including recognizing the limits of power, embracing multilateralism, and promoting inclusivity and fairness.
- United States has a critical role to play in building a better order but that it cannot do so alone. Rather, the United States must work with other countries, especially rising powers like China, to create a new order that reflects the interests and perspectives of all nations.
- concludes that building a better order will be a difficult and long-term project, but it is necessary for ensuring a more peaceful and prosperous world.
