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Global Political Economy summary
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A detailed summary of the course Global Political Economy covers all the lectures and relevant chapters include examples of quiz questions.
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summary of ''Global Political Economy: Evolution and Dynamics'' by Robert O'Brien
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INTRODUCTION TO INTERNATIONAL POLITICAL ECONOMY CHAPTEREmerged in the 1 0s as a subfield of International Relations
IPE deals with competing explanations of events, issues, and processes such as
- The environment/climate change
- Globalization, migration, and trade
- Economic development
- Gender
- inequality
IPE uses conflicting explanatory frameworks:
1. Liberalism
2. Economic nationalism
. Marxism
The goal is to critically analyze current events and phenomena, including, for example, the corona
pandemic, the rise of populism, the refugee crisis, and Brexit…
International political economy definitions:
- An academic field of study of the interaction of economic and political phenomena across
state borders
- An interdisciplinary social science field of study that investigates, analyzes, and proposes
changes in the process of economic flows and political governance that cross over and/or
transcend national boundaries
o Economic flows trade, capital, labor (migration), technology, ideas, natural
resources, environmental pollution
So IPE is an interdisciplinary academic field
- At the intersection of economics and political science but also international relations,
sociology, history, geography, law, cultural studies
IPE studies
- The interplay between national and international issues
- Causes of different phenomena to propose political alternatives
It offers competing theoretical perspectives (nationalism, liberalism, critical)
- Different explanations for the same
DISTINCTION BETWEEN GLOBAL POLITICAL ECONOMY GPE AND INTERNATIONAL POLITICAL
ECONOMY IPE
Gl bal Political Economy
- About the economic and political environment since the 1 0s
- i.e. states, corporations, and citizens in an increasingly globalize world
In e na i nal Political Economic
- History of economic and political activity across states until 1 0s
, - The academic field of study of the interaction of economic and political phenomena across
state borders
GPE and m ela ed di ci line
Ec n mic : choice under scarcity, comparative advantage, supply and demand, the
operation of markets. Approaches to economics:
Neo-classical economics
- Central problem: allocation of scarce resources (unlimited human desires, limited resources)
- Solution: free markets allow for mutually advantageous exchange
- Individuals: rational, free, equal, fully informed, utility-maximizing
- Governments should provide defense and the rule of law but government intervention is
inefficient and hence intervention is limited
- Involvement of politics and politicians block the operation of free markets
Keynesian economics:
- Government intervention is crucial to:
o A well-functioning economy, especially in times of depression or recession
o The provision of a wide range of public goods (healthcare, education)
Institutional economics:
- Highlights the role of formal institutions (laws, legal structures) and informal institutions
(social norms)
- Markets are the result of institutions
- Economics is embedded in and cannot be separated from the political and social system
P li ic : states and the use of power, the machinery of government
Central questions/problems:
- Use of power and politics
- Ability of actors to enforce their interests
- How societies should be governed
- Differences of governance models across countries
- Operation of the state/machinery of government
Decision-making in politics based on:
- Argument, ideology, institutional features and the threat of violence
In e na i nal ela i n : causes of war, foreign policy of states, international organizations
Key issues:
- Security and the cause of war
- Interactions between/among states (foreign policy)
- Rather than the politics of a particular state
Different approaches:
- Realism: the international system lacks an overarching power (anarchy) and states
continuously compete for power
- Liberalism: possibilities for cooperation among states (free trade, democracy, and foster
peace)
,GPE METHODS
1. Ca e die
a. Small n: h did an e ent happen the a it did
Detailed investigations of an event/issue to understand the causal factors/pathways
To apply insights learned to similar situations
Starting point for theory-building
Disadvantage: may be unrepresentative (not generalizable to other contexts)
b. Large n/statistical analysis: statistical examination of large datasets
Example: does free trade lead to prosperity?
If a positive correlation is found then try to understand whether free trade
causally improves prosperity or whether there is a third factor (openness for
example) generating both
2. Ra i nal ch ice: strategic behavior of actors
a. Explains outcomes as the result of actors’ choices (individuals, groups, or states)
Actors are utility-maximizers (minimize losses, maximize gains)
Actors calculate the costs and benefits before choosing an action
b. Collective action problems: under-provision of public goods (clean water/air),
overuse of common pool resources (oceans, air)
Not rational for each individual to bear the cost of cleanup if all others can enjoy
the benefit
Rational for each person/company to use up as much resources as possible
c. Sub-optimal outcomes such as trade protectionism
Benefit highly concentrated among groups that have resources to lobby
(industries)
Costs are diffused among many unorganized actors
d. Game theory: strategic behavior in expectation of what opponents will do
Prisoner’s dilemma: some environments can lead rational actors to make
decisions that lead to poor outcomes
Example: country A may worry that if it opens up to trade, other
countries will keep trade barriers, resulting in an economic loss for A. all
countries are better off with free trade, but any individual country can
benefit if it keeps barriers (with others open up). Result: all countries
put barriers to trade
Why do countries keep protectionist measures?
1. Although free trade may be advantageous to both, countries may
keep tariffs to avoid economic losses (problem of free-riding)
Is free trade impossible? No, games/rules change overtime
Especially if there is repeated interaction
Countries learn about the costs and benefits of cooperation
Players might create institutions such as the World Trade Organization
(WTO) that reduces the ability to cheat
. In i i nali m mostly used among liberal scholars
, a. Focuses on rules, institutions which shape individual decisions (similar to
institutional economics)
b. Example: prisoner’s dilemma solution:
Create rules and institutions; WTO
Reduce ability to cheat/free-rife
Create incentives to cooperate
c. Provides insights of country classifications
Varieties of capitalism
What explains different sorts of capitalism in Anglo-American countries
vs Germany vs Japan:
1. E.g. is labor included in decision-making?
2. E.g. what is the relationship between banks/financial institutions
and businesses?
Nature of welfare regimes
. C n ci im
a. Norms and values not only shape states’ interests but they are identities and
therefore interests themselves
b. Identities explain states’ interactions: states perceive each other as all enem
ne tral peacef l pop list comm nist…which shapes their interactions
c. Key questions:
What are actors’ beliefs and preferences, how have they been created and how
might they change?
How do dominant ideas come about?
d. Example: how is it that at one point in time, inflation is the key economic issue, and
at others, unemployment? Why does the US consider Cuba “communist” but China
“economically advantageous”?
QUIZ
The field of international political economic
a. Examines the relationship between national and international politics
b. Examines the relationship between economics and politics
c. Draws upon disciplines such as history, political science, economics, and sociology
d. All of the above
As a research method, case studies:
a. Are useful for generating theories, concepts, typologies and hypotheses
b. Provide rich empirical material for investigation
c. Help us understand how particular things happen
d. Are the only means of investigation when there is no statistical data
e. All of the above
In rational choice theory, utility maximizers are actors that:
a. Use a large amount of public services
b. Attempt to maximize their gains and minimize losses
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