IR206 Revision Guide - Summary International Political Economy PDF

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MT Week 1: Contemporary IPE LandscapeCohen’s (2007)MT Week 2: Realism, Liberalism and Marxism Economic liberalism Nationalism MarxismMT Week 3: IPE in ‘the Rest’ Modernisation theory Dependency theory World systems theory Developmental statesMT Week 4: Feminist IPE Influences on feminist IPE Types o...

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MT Week 1: Contemporary IPE Landscape Cohen’s (2007) MT Week 2: Realism, Liberalism and Marxism Economic liberalism Nationalism Marxism MT Week 3: IPE in ‘the Rest’ Modernisation theory Dependency theory World systems theory Developmental states MT Week 4: Feminist IPE Influences on feminist IPE Types of feminist IPE The productive and reproductive economies Case study: women in global value chains Peterson, ‘How (the meaning of) gender matters in political economy’ MT Week 5: Subnational level theories: interests, institutions, ideas Open Economy Politics (OEP) Domestic Interests Domestic Institutions Ideas International bargaining MT Week 7: Systemic level theories: hegemony and regimes Historical Context - 1970s Hegemony Regimes MT Week 8: International Organisations and Global Economic Governance International Organisations (IO) Global economic governance MT Week 9: Globalisation Theories of globalisation The new globalisation (Baldwin) Economic globalisation - Evidence? Impact of economic globalisation

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MT Week 10: Varieties of Capitalism Varieties of Capitalism (VoC) approach VoC framework - Liberal Market Economies (LME) v Coordinated Market Economies (CME) VoC and globalisation Extensions to developing countries MT Week 11: Neoliberalism Brief history What is neoliberalism? Neoliberalism under threat? The 2008 crisis and post-neoliberalism. LT Week 1: Global Value Chains GVCs as a second ‘unbundling’ GVC governance (Gereffi et al) Implications Future of GVCs LT Week 2: Multinational Companies and Business Power Key concepts: Types of FDI Potential advantages and disadvantages of FDI Corporate power LT Week 3: Rising Powers What explains the ‘rise of the rest’? Consequences of the ‘rise’: Shift in economic power? Case study: China Developing countries representation and power in international organisations - New multilateral era of governance? (Woods) Implications for less developed countries: South-South cooperation or sub-imperialism? LT Week 4: Investment Protection History of international investment law Why do states sign BITs? Do BITs attract investment/FDI inflows? Impact on host states LT Week 5: Tax International tax relations Why does the tax haven problem persist? LT Week 7: Trade ITO to GATT

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Global Agreement on Tariffs and Trade (GATT) From the GATT to the WTO The Doha Round New powers in old clubs - challenges and problems (Narlikar) Alternatives to the WTO LT Week 8: Development and Flows between North and South Flows to and from developing countries History of development thought and practice Foreign aid LT Week 9: Environment Globalisation and the environment - Different views History of global environmental cooperation Case study: Climate negotiations ‘The paradox of global environmentalism’ (Guha) LT Week 10: The ‘Global’ Financial Crisis Background and chronology Causes: Private market actors Causes: Government and the public sector An intellectual failure? IPE scholarship and the crisis LT Week 11: The Rise of Economic Nationalism. Trump & Brexit Rise of Populism Realism, Liberalism and Marxism Open Economy Politics (Owen & Walter) Neoliberal Ideas Employment Globalisation Polanyian Explanations Gender

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MT Week 1: Contemporary IPE Landscape Cohen’s (2007) ❏ Summary: The two ‘schools’ of IPE ❏ American

British

Ontology

States

Various agents

Orientation

Public policy

Injustice

Epistemology

Positivist

Interpretive

Theory

Mid-level

Systematic

American

British

State-centric, with sovereign states above other units of interest. A subset of IR

States as merely one unit of interest among others; more inclusive.

Core object of study

State behaviour and system governance

Range of social and ethical issues

Purpose of theory

Explanation/identifying causality

Judgement

Driving ambition

Problem solving

Amelioration/bettering

❏ Ontology ❏

❏ Epistemology ❏ American

British

Principles of positivism and empiricism. Deduction. Formal research methods.

Approaches are more interpretive, and methods are less formal.

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Mid-level theorising, relationships within large and stable structures.

Grander theories of systemic transformation and social development.

‘Normal’ science

Critical theory

❏ Two schools complement each other; strength of one balances the weaknesses of the other. Room to compromise for their mutual benefit.

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MT Week 2: Realism, Liberalism and Marxism ❏ The 3 historical traditions ❏ American IPE: Realism and Liberalism ❏ British IPE: Marxism

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Economic liberalism ❏ Originates with Adam Smith, Wealth of Nations (1776) ❏ Reacting to Mercantilism ❏ Liberalism: Doctrine and set of principles for organising a market economy to ensure maximum efficiency, economic growth and individual welfare ❏ Assumes politics and economics exist in separate spheres. Markets should be free from political interference. ❏ Core concepts ❏ Free market ❏ Price mechanism/‘Invisible hand’ ❏ Rationalism ❏ Absolute gains ❏ Trade balance ❏ Comparative advantage ❏ Liberalism in the present day ❏ ‘Embedded liberalism’ ❏ Liberal institutionalism ❏ Neoliberalism - The ‘Washington consensus’

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Nationalism ❏ Primacy of politics over economics. Markets should be subordinate to the pursuit of state interest. Political factors should determine economic relations. ❏ Economic resources are necessary for national power, so conflict between states for economic resources are both economic and political in nature; complementary relationship between wealth and power. ❏ Objective: Industralisation. Why? ❏ Externalities. ❏ Economic self-sufficiency and political autonomy. ❏ Basis of military power, central to national security. ❏ Arises from the tendency of markets to concentrate wealth and establish dependency/power relations. Relative gains over mutual gains as relations are conflictual. ❏ Mercantilism ❏ Originates in the C17th/18th as a foil by liberals. Revived in the late C19th/20th. ❏ Combination of power and national security with economic prosperity ❏ Core concepts ❏ Power ❏ Gold and silver ❏ Trade surplus ❏ Relative gains ❏ Public and private collaborate ❏ Economic nationalism ❏ Core concepts ❏ National politics ❏ State-centric ❏ Protectionism ❏ Industrialisation ❏ Relative gains ❏ Friedrich List’s reaction to Smith ❏ ‘Beggar-thy-neighbour’ of interwar years (EH Carr) ❏ Export-oriented industralisation post-independence ❏ The Trump/Brexit moment ❏ Nationalism in the present day ❏ Neostatism ❏ Arose in post-independence developing countries ❏ Export-oriented industrialisation - Protectionism for infant industries ❏ Neomercantilism - China, Germany, US? ❏ A new nationalist turn? Eg Trump, Brexit, Bolsonaro

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Marxism ❏ Key concepts ❏ Class conflict ❏ Relations of production ❏ Crisis ❏ Imperialism ❏ Marx ❏ Dialectical and historical materialist view of history ❏ Structural crises inherent to capitalist mode of production ❏ Economics drives politics; political conflict is a result of a struggle between classes over wealth distribution ❏ Lenin/Trotsky ❏ Capitalism was successful and Marx’s proletariat revolution did not occur so Lenin transformed Marxism from a theory of domestic economics to a theory on international political relations ❏ Capitalism had escaped its three laws of motion through overseas imperialism which has led to uneven development, an unstable capitalist international system and the struggle of nations ❏ Marxism in the 20th century ❏ Critical IPE ❏ Central object of enquiry is neoliberalism ❏ Debates whether capitalism is in crisis ❏ Neo - Gramscianism ❏ Adds a sociological perspective ❏ Focus on hegemony ❏ Cox (1983) applied Gramsci to the international level ❏ Dependency ❏ Marxist feminism

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MT Week 3: IPE in ‘the Rest’ Modernisation theory ❏ Reaction to Marxism ❏ Deterministic ❏ Development as Westernisation ❏ Everyone going through the same stages ❏ Economic, social and cultural modernisation ❏ Critique: Countries are not in the same position within the capitalist system

Dependency theory Reaction to modernisation theory Marxism influenced Focuses on developing countries’ position within the global economic system Prebisch-Singer hypothesis: Declining terms of trade between primary and manufactured goods. Price of manufactured goods increases relative to prices of primary goods, and so will develop more over time. ❏ Frank (1966) ❏ “Contemporary underdevelopment is in large part the historical product of past and continuing economic and other relations between the satellite underdeveloped and the now-developed  metropolitan countries. Furthermore, these relations are an essential part of the structure and development of the capitalist system on a world scale as a whole.” ❏ Developing countries did not start from point one but following centuries of colonisation. The now-developed countries may have been und  eveloped in the past, but not under d  eveloped. ❏ Underdevelopment in the periphery is the corollary of development in the metropolitan core. Development in the periphery coincided with recession in the core. ❏ Policy prescription: Import-substitution industrialisation (ISI) ❏ Imports: Nationalisation, subsidisation and protectionism ❏ Three components: ❏ State intervention to stimulate and consolidate industrialization ❏ Integration of the new and expanding working classes through social reform and employment generation. Create a workforce. ❏ Achieving some autonomy vis-à-vis international economy ❏ ❏ ❏ ❏

9 ❏ Use of trade measures to create a domestic industry which would not otherwise have been able to compete if there were imports. Partly resolves the terms of trade issue. ❏ Implemented in Africa, South Asia and especially Latin America ❏ Drawbacks: ❏ Led to a reliance on foreign capital ❏ Protecting inefficient and expensive industries ❏ Dependence in decline? ❏ ‘Dependence’ is arguably coming to an end, at least in Latin America where the theory was birthed. The ‘crisis of the 1970s’ meant that politicians and academics castigated the multinationals as agents of American imperialism, but the new economic and political reality sees them as potential allies of foreign exchange, needed for development (Frank; Strange)

World systems theory ❏ Subsequent development of dependency theory ❏ Marxist analysis to the world economy with less emphasis on the nation state ❏ Wallerstein ❏ Thus far there have only been two varieties of world systems: ❏ World economies - Large axial division of labor with multiple political centers and multiple cultures ❏ World empires - Large bureaucratic structures with a single political center and an axial division of labor, but multiple cultures ❏ Assumes a global capitalist system

❏ ❏ Separate the world into 3 parts, rather than 2. ❏ Semi-periphery. Somewhat developed. Exploit the periphery whilst being exploited by the core. ❏ Makki ❏ Focus on post-colonial Africa ❏ Colonisation.

10 ❏ Colonial legacy - At independence, what states could achieve depended on the political, social and economic institutions they inherited. Challenged by the limits of national sovereignty in a world still structured by colonial divisions of labour and an interstate hierarchy. ❏ World system - Africa is hostage to global economic cycles and events, more so after the neoliberal era. ❏ Uneven and combined development.

Developmental states ❏ Pursued by the Newly Industrialising Economies/ East Asian tigers (Hong Kong, South Korea, Singapore, Taiwan) from the 1960s ❏ Policy prescription: Export-oriented industrialisation (EOI) ❏ Imports: High tariffs on import competitors. Low tariffs on inputs. ❏ Exports: Subsidisation. Currency devaluation. Government intervention. ❏ Infant industry protection to develop exports ❏ Strongly nationalistic ❏ Both neo-statism (developmental states) and neoliberalism claim the success ❏ Neo-statism ❏ “Developmental state” shapes, directs and promotes development ❏ Investment in key industries, infrastructure, human capital ❏ Infant industry protection and export-oriented trade policy ❏ Markets should be governed, not free ❏ Like neoliberalism and dependency theory: ❏ Development is conceived as a national process ❏ Development is understood to be economic growth ❏ Neoliberalism ❏ Development achieved through participation in the global market (increased competition), rather than the ISI approach of the dependency theory which advocates withdrawing  f protectionist policies ❏ Developed in spite o ❏ Has some currency due to the 1997 Asian Financial Crisis. Crony capitalism or volatile capital flows? ❏ Development fails because of: ❏ “incorrect” government policies ❏ institutional underdevelopment ❏ corruption/’crony capitalism’ ❏ excessive state intervention leads to inefficiency

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MT Week 4: Feminist IPE ❏ A critical theory entailing a normative commitment

Influences on feminist IPE ❏ History of feminist thought and action ❏ 1st wave: Late C19th and early C20th. Political and economic rights. Women's right to vote. ❏ 2nd wave: 1960s-1980s. ‘The personal is the political’. ❏ 3rd wave: 1990s-2000s. Intersectionality. ❏ 4th wave: Present day. ❏ Development studies - Gender equality as means and ends of development ❏ Feminist economics ❏ Challenges the use of homo economicus ❏ Broader conception of ‘the economy’ beyond the ‘formal economy’. ❏ Focus on attaining gender equality

Types of feminist IPE ❏ Liberal - Gender as a variable. Affects and is affected by the international political economy. ❏ Constructivist/Critical - The meaning of gender produces and is produced by the international political economy. ❏ Marxist

The productive and reproductive economies ❏ Productive economy ❏ Women’s participation in the labour market has increased globally, but wages and working conditions in feminised industry tend to be worse. ❏ Gendered consumption ❏ Reproductive economy ❏ Not included in measures of economic productivity ❏ Social reproduction (Bakker): ❏ Biological reproduction ❏ Reproduction of the labour force

12 ❏ Reproduction and provision of caring needs ❏ Seeing the economy holistically

❏ ❏ Double burden - Work in both the formal and informal economy. ❏ Privatisation of reproductive labour - Shift from the reproductive economy to productive economy. Does not mean it has simply come into being, merely that it has changed in status.

Case study: women in global value chains ❏ “Female labour must either be cheaper to employ than comparable male labour, or have higher productivity, or some combination of both; the net result being that unit costs of production are lower with female labour.” (Elson & Pearson) ❏ Girls have already learned to sew at home ❏ ‘Docility’ in the presence of (male) supervisors is socially conditioned ❏ Women have a ‘secondary status’ in the labour market

Peterson, ‘How (the meaning of) gender matters in political economy’ ❏ Positivist - Feminist and traditional political economy tools. How men and women affect, and are affected by, the political economy differently. ❏ Constructivist - Feminist tool of ‘analytical gener’. How masculinity and femininity produce, and are produced by, political economy. ❏ A continuum of (overlapping and ongoing) feminist knowledge-building projects

13 ❏ Men dominate the practice of economics. Orthodox models presuppose male-dominated activities (formal economy) and masculine characteristics (objective, rational, competitive). ❏ Need to address the experience of women. ‘Background’ story which underpins and enables men’s activities; interdependence. ❏ Some conceptual structure presuppose masculine experiences and are constituted as masculine (economic man, breadwinner), so women cannot simply be ‘added’. Exclusion is not coincidental but required for the analytical consistency of reigning paradigms. ❏ Feminist critique of the ‘family wage’ now legitimises ‘flexible capitalism’. ’Family wage’, the ideal of male breadwinners and women homemakers, has now been replaced with the ideal of a two-earner family. Flexible capitalism relies on women's labour, particularly in low-paid work in service and manufacturing. Overlooks the fact that this comes with decreased job security, exacerbation of the double shift, and increasing number of female-headed households.

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MT Week 5: Subnational level theories: interests, institutions, ideas Open Economy Politics (OEP) ❏ American school of IPE

❏ ❏ Units of analysis: individuals, sectors and factors of productions ❏ Derive interests from their position in the international economy ❏ Domestic institutions aggregate domestic interest into government preferences and structure the bargaining of competing social groups ❏ International bargaining between states with different preferences ❏ International bargaining can influence domestic interests and institutions

Domestic Interests ❏ Actors that seek to benefit from a policy will allocate resources in the political arena ❏ Individuals placed into groups that are assumed to share identical interests. ❏ Critique: Why do government policies change even though domestic interests have not? Why do government policies stay the same when interest group politics is unstable? Look to institutions

Domestic Institutions ❏ Definition: “Persistent and connected sets of rules (formal or informal) that prescribe behavioural roles, constrain activity, and shape expectations.’’ (Keohane) ❏ Conceptualising the role of domestic institutions in aggregating domestic interests: ❏ Party politics

15 ❏ Selectorate - Group of people that the leader needs to maintain the support of at any given time ❏ Corporate power ❏ Types of institutionalism: ❏ Rational choice - Analyse the interests of each of the individual actors and how institutions aggregate them rationally ❏ Sociological - Institutions creates the social group, which has its own logic, which may differ from the logic of the individuals whose interests they are supposed to be aggregating. ❏ Historical - Once you have formed an institution, you are locked into it. ❏ Condition the bargaining between groups ❏ ‘Embedded liberal’ compromise - social welfare policies are the cost paid by the capitalist for economic openness ❏ Critique: Why do interest groups and political actors sometimes act against their own interest? Look to ideas

Ideas ❏ What explains ‘stupidity’? How ideas might shape policy: ❏ Bounded rationality ❏ Logic of appropriateness ❏ Inter-subjective norms ❏ Emulation ❏ Constructivist IR - Conceptualises the relationship between ideas and interests

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International bargaining ❏ International organisations structure bargaining and affect outcomes. Neoliberal institutionalism: facilitate cooperation, provide information, issue linkage and a reduction in transaction costs.

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MT Week 7: Systemic level theories: hegemony and regimes Historical Context - 1970s ❏ 1945-1973: Bretton Woods. The gold standard, a fixed exchange system, pegged the US$ to gold. ❏ 1973 onwards: Shift to a floating exchange rate. Signified the loss of confidence in the US to underpin the global financial market. Why? ❏ 1973 oil shock ❏ Nixon shock - Stepped back from the liberal economic system eg, 10% tax on imports and abandoned the gold standard, which the US championed ❏ Vietnam War - US was overstretched and it undermined the idea that the US military represented its economic power due to their inability to end the war. ❏ Nixon’s resignation.

Hegemony ❏ Definition: “A single state that is much larger and relatively more advan...