This document summarizes key theories and concepts in international political economy, including economic nationalism, internationalism, and structuralism. It discusses patterns of global trade, investment, and monetary relations. It also analyzes economic competition between the global North and South and how countries use economic policies and tools like sanctions to achieve political and economic goals.
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This document summarizes key theories and concepts in international political economy, including economic nationalism, internationalism, and structuralism. It discusses patterns of global trade, investment, and monetary relations. It also analyzes economic competition between the global North and South and how countries use economic policies and tools like sanctions to achieve political and economic goals.
This document summarizes key theories and concepts in international political economy, including economic nationalism, internationalism, and structuralism. It discusses patterns of global trade, investment, and monetary relations. It also analyzes economic competition between the global North and South and how countries use economic policies and tools like sanctions to achieve political and economic goals.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
This document summarizes key theories and concepts in international political economy, including economic nationalism, internationalism, and structuralism. It discusses patterns of global trade, investment, and monetary relations. It also analyzes economic competition between the global North and South and how countries use economic policies and tools like sanctions to achieve political and economic goals.
Copyright:
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Chapter 12 National Economic Competition
Ps 130 World Politics Michael R. Baysdell Saginaw Valley State University
Theories of International Political Economy
Economic nationalism
Economic internationalism Economic structuralism
Economic Nationalism: Economic Statecraft or Mercantilism
Realist approach Alexander Hamilton IPE is a zero-sum game Emphasis on political goals
Practices or Strategies Imperialism/neoimperialism (mercantilist theory) Economic incentives and disincentives Protectionism and domestic economic support 3
Economic Internationalism Liberal approach Free economic interchange, laissez-faire, capitalism Non-zero-sum game
Practices
Early capitalist theory (Adam Smith, The Wealth of Nations) Mixed Economy approachmodify the worst abuses of capitalism National competition, but cooperation is increasing Limited role of politics in economics Keynesian economics Use IGOs and national governments to regulate international economic interchange and ensure the spread of capitalism and free trade IMF, GATT, and other organizations to promote trade and ease 4 inequities
Economic Structuralism Marxism, neoimperialism, neocolonialism Karl Marx, The Communist Manifesto (1848): Bourgeoisie exploits proletariat. Dependency theory: Colonialism hampered the long-term development of LDCs World systems theory: Western dominated capitalist system pits CORE against PERIPHERY. Structure determines politics and structure is based on the haves (EDCs) exploiting the have-nots (LDCs) 5
The World Economy: Globalization and Interdependence
Trade International investment
Monetary relations 6
Trade General pattern of expanding trade Merchandise trade Primary goods Manufactured goods
Services trade Includes services from insurance to education
International Investment Foreign direct investment (FDI) Stake in foreign companies or real estate, with the aim of gaining controlling interest
Foreign portfolio investment
Does not involve control of companies
International Investment and Multinational Corporations (MNCs)
Private enterprises Subsidiaries operating in more than one state Ownership of plants and/or resource extraction in other countries Most based in North Immense wealth gives influence (United Fruit, Royal Dutch Shell 10
Monetary Relations Globalization of money Four main banking centers: Germany, Japan, United Kingdom, United States Globalization of financial services North-South patterns of money and banking International regulation of money dominated by North Exchange ratesthere are advantages and disadvantages to weak currency (good for exports, but consumers lose with more expensive imports) Balance of payments ultimately affected by interest rates Higher U.S. interest rates=stronger dollar=more imports 11
The World Economy: Diverse Circumstances
All economic theories recognize that the world is divided into two spheres: North America and Europe (North) Africa, Asia, and Central and South America (South) But, there are exceptionsdivisions are based more on economic and political factors than on geographic location 12
Problems with Classifications
Not a clear dichotomy Newly industrializing countries (NICs) Countries in transition (CITs) Inaccurate statisticsdifficulty of measuring and reporting Questionable relevance of data (GNP vs. GNP-PPP)
Poor is a relative term Poor in EDCs much
better off than poor in LDCs.
13
North-South Economic Patterns
Trade differences Dominated by North LDCs dependent on EDCs for export earnings LDCs rely on primary products
Investment differences
14
North-South Societal Differences
Disparities LLDCs (least developed countries) Lower life expectancy Lower literacy rate Poor health Less access to food, water, and sanitation services
Declining conditions in some LLDCs
Vicious circle of extreme poverty and deprivation 15
Evaluating the North-South Gap
Mixed data on development Uneven patterns of development Disparity among countries Disparity within countries Negative by-products of development Explosive population growth Rapid urbanization
16
National Economic Power
Financial position Involves net trade, deficit spending, foreign debts, and so on
Natural resources
Industrial output
Possession or lack of energy, mineral, or other natural resources influences levels of self-sufficiency, trade, or dependency Industry is highly concentrated in a few countries Power of food production (self-sufficiency) 17
Agricultural output
North-North Economic Competition
Changes in Norths economic climate Slowed growth rate More competition from NICs of the South and between regional trading blocks of nations
Shifts in labor force
Development of high technology and e-commerce means fewer workers and increases in productivity Exporting the service sector of economies Downsizing and outsourcing 18
North-North Economic Competition
Changes in Norths political climate Shifting postCold War alliances Concern over safety of Chinese products and enormous trade deficits with China places strains on China's political relations with US and EU Differences between US and EU nations over Iraq and Middle East policy and development of LDCs threaten to spill over into disputes over bilateral economic and 19 trade issues
North-South Economic Competition
Increased tension LDCs are now asserting with mounting intensity their claim that they have a right to a much greater share of the worlds economic wealth North has generally rejected LDC demands for economic concessions Some LDCs have become major exporters of manufactured goods and, to a lesser degree, services that directly compete with the EDCs products and services, thus undermining EDC dominance in those economic areas LDCs compete for resources ($2200 Tata car will be a problem, price of pork and beef last 5 years) 20 Widespread piracy of Norths intellectual property by South
The Souths Reform Agenda
New International Economic Order (NIEO) Trade reforms Monetary reforms Institutional reforms Economic modernization Greater labor migration Elimination of economic coercion Economic aid Debt relief and cancellation Control of human and natural resources
Norths response: limited, barriers to 21 development are internal, not our fault
Applied Economic Nationalism
Using economic means to achieve economic ends Trade and investment barriers Quotas, tariffs, domestic content regulations, labor laws, and health and safety regulations Trade and investment supports Agricultural & industrial subsidies, price supports, and loans to domestic producers
22
Trade and Investment Barriers
Tariffs Nontariff barriers Quotas Pricing limits Health and safety standards (S. Korea Mad Cow) Administrative requirements Japanese culture (segregating foreign products)
Monetary barriers Investment barriers
23
Trade and Investment Supports
Ways in which governments intervene in free trade to gain an unfair advantage in the international marketplace: Providing domestic subsidies Encouraging dumping products onto foreign markets Forming cartels All violate international trade agreements 24
Using Economic Means to Achieve Noneconomic Political Ends
National security restrictions
Economic incentives Economic sanctions
25
History of Sanctions Date back to the city-states of Athens and the use of trade embargoes Use of economic instruments to promote policy is ancient Increased use of sanctions in 20th century Used by both international organizations and individual countries
26
Effectiveness of Economic Sanctions
Limited success rate, but they remain a regularly used tool When do they accomplish their goals? Goal is modest Target is politically unstable and weak Sender and target are friendly and trade with each other Imposed quickly and decisively Sender avoids high cost to itself Effectively enforced with minimal evasion or 27 cheating
Drawbacks of Sanctions There may be unintended victims Country imposing sanctions can be hurt They may be used by EDCs to maintain dominance over LDCs They can harm relations with countries not supporting sanctions They can harm those whom they seek to assist
28
The Future of Economic Nationalist Policy
Capitalism has triumphed over other competing economic models, particularly Marxism and socialism Greater economic interdependence Yet, powerful arguments against and forces opposed to globalization still exist 29
In Conclusion Economic nationalism still remains the dominant approach to global economic affairs even though the trend toward international economic liberalization has grown in importance. 30
Chapter Objectives After reading this chapter, students should be able to: 1. Explain why politics and economics are intertwined aspects of international relations. 2. Analyze international political economy (IPE). 3. Discuss the economic nationalist doctrine. 4. Discuss the economic internationalist approaches to IPE. 5. Discuss the economic structuralist approaches to IPE. 6. Discuss how trade, international investment, and monetary relations affect the world economy. 7. Analyze the economic patterns of the North and the South. 8. Analyze global economic competition in terms of the North/South divide. 9. Understand how economic means can be used to achieve both economic and noneconomic ends. 10. Analyze the future of economic nationalist policy.
