International Political Economy Final
Classical Era (Pre-WWI) correct answers -Mercantilism to Liberalism
- Pax Britanica: British econ & polt dominance
- relied on gold standard (fixed exch rate)
- Emergence of free trade
- Corn Laws Repealed
- Cobden-Chevalier Treaty (MFN clause)
- U.S. = protectionist
- Trade= mainly with colonies (similar to mercantilism)
Interwar Collapse correct answers - gold standard abandoned, and UK hegemony
ended
- 1920's: collapse of globalization
- Great Depression--- world trade declined by 2/3, international capital flows ceased,
currency wars (competitive devaluations), regional blocs
- emergence of MNCs
- mass production (assembly lines)
- vertical integration, mass markets, new industries
Bretton Woods & Postwar Liberal Order correct answers -U.S. hegemony
-embedded liberalism: free market w/ safeguards
- LDC= ISI
- Bretton Woods Conference (1944)- U.S. leadership, creation of IMF and World Bank,
BW monetary system (fixed exch rate, based on dollar)
- GATT (1947): reciprocity, non-discrimination, flexibility (safeguard mechanisms)
- POSTWAR BOOM
Re-Globalization (1973-2008) correct answers - ^ financial crises
-washington consensus (neoliberalism resurgent)
- Emergence of global capital
- end of BW (floating exchange rates, free movement of capital)
- 1970s-80s: stagnation (oil crises)
Causes of Globalization correct answers technology, econ, polt
Globalization after 2008 correct answers - significant decrease in trade and financial
flows
- political backlash
- economic stagnation
- no real increase in trade
,- capital flows have decreased by 2/3
Secular Stagnation correct answers - idea that very low growth is the new normal
- may be a demand problem, and is exacerbated by increasing inequality
- lack of investment= slow growth
International Liberal Order correct answers - current: based on U.S. leadership & liberal
values
- Western creation but extended to the rest of the world after the cold war
- Threats: rise of the rest, ^ iliberal powers, leadership vaccum, relative decline of W,
Globalization backlash
- China: so far has benefitted but will want to shape its future, starting to exercise a
leadership role, new insts. where China is the leader (BRICS)
Mercantilism (1500-1750) correct answers -"wealth is power and power is wealth"
- control of markets and resources
- monopolistic colonial empires
- favorable balance of trade (exports-good, imports bad)
- main actor= state, there are conflicts of interest, close link b/t state po;wer and
economic activity
- main objective: maximize state power (max. wealth)
- trade= a way to acquire wealth from abroad
Neomercantilism correct answers -idea: industry = essential to state power, security
and self sufficiency (tech= good, ag= bad)
- free trade isn't going to automatically lead to industry expansion (locks in CA and
countries can't catch up)
- industry policy: promote winding industries, including state investment and ownership
- infant industry arguement: "temporary" protectionsism
- strategic resources policies (energy mercantilism)
Mercantilism and Realism correct answers - both emphasize state power, anarchy, and
national interest
- zero sum nature of economics (relative gains)
- economy is subordinate to the state
- hegemonic stability theory: one dominant national causes an increase in stability in the
international system
Liberalism correct answers - critique of Mercantilism
- Adam Smith
- market equilibrium idea
- favored free trade
- Ricardo and CA ---- trade is always good
- unilateral free trade is okay because most of the gains from trade come from imports
,- assumptions: main actors= individuals, harmony of interests, decrease gov't
intervention in markets, primary objective: enhance aggregate welfare (not amass state
power), gov't should enforce property rights and provide public goods
Keynesianism correct answers - critique of classic liberalism: overestimated how much
self-interest and public interest coincide
- embedded liberalism: ^ priority given to providing full employment and social security
- macroeconomic management to stimulate econ
- welfare state, reflected in Bretton Woods
Neoliberalism correct answers -resurgence of orthodox liberalism
- Friedrich Hayek: gov't intervention= ineffiency and threat to indv freedoms
- Milton Friedman: econ freedom = polt freedom
- 1980s-2000s: Thatcher & Reagan, deregulation, privatization, supply-side econ
- Washington Consensus (IMF, World Bank)
- Post 2008 = Keynesiasm Resurgence
Marxism and Neo-Marxism correct answers -Current capital system = exploitative by
nature (workers get less than what they produce)
- class struggle: labor vs. capitalists
- state policy = controlled by capitalists
- alientated labor
- once labor "woke", they'd revolt
- neo marxist versions focus on neo imperialism and North/South exploitation
Neo Marxist and IPE correct answers -Lenin Theory of imperialism: capitalism leads to
colonial exploitation and imperialist conflicts
- world system theory: division of labor b/t a core, periphery and semi periphery
Dependency theory: South suffers from decreasing terms of trade, Prebish-Singer
hypothesis- this leads to ISI
Constructivism correct answers -criticism of rationalism and materialism, no national
fixed interests, actors= product of societal interactions
- role of norms, beliefs, ideas, ideologies on actors, preferences and behavior
Feminism correct answers - unequal political economic system (hierarchy)
- gender divided labor
Open Economic Policies correct answers - Dominant approach; theoretical pardigm
- Focuses on interests, institutions, and interactions
- Narrow framework
- Integrate domestic and int'l politics: IPE research had ignored the domestic realm
- issues: neglects roles of norms/rules narrow materialistic conception of interests;
reductionist - too focused on the mirco-level (individual) incentives (doesn't explain
international contagion or knowledge diffusion), not enough focus on systems; fails to
, account for macro-level changes (rise/fall of econ powers, world changing events);
linearity from dom. pol. to FP - neglects important feedback affects (role of IOs)
-
Rational Choice Theory correct answers - model of reality, actors are rational
(purposive and strategic)
Actors correct answers - Societal groups
- Owners of Factors of Production
- Individuals
-States
Interests and Preferences correct answers - What are the actors interests
- Preferences: how do diff. policies affect them
Intensity and Organization of Interests correct answers - Pol. org. of interests - org. is
costly, intensities shape how much actors are willing to lobby
- Preference intensities - size of stakes, specificity of assets (single skilled - more likely
to desire to keep jobs, have a harder time switching jobs)
Domestic Institutions correct answers - Key mediating role of dom. ints - determine how
interests are aggregated into the policy
- Interests --- Institutions --- Policy
Electoral Institutions correct answers - Democratic vs. authoritarian regimes (demo =
more responsive, less insulated)
- Election rules, district size, Do the rules represent the mass public/median voter as
opposed to localized/special interests
Legislative and Bureaucratic Institutions correct answers - Legislative: rules shown in
constitution
-Bureaucracies: Insulate politicians from unwise/unmotivated policies
International Strategic Interactions correct answers - domestic political process sets
national policy
- OPE often stops here
- Interactions within global pol. economy also matters
Strategic Environments correct answers How do states preferences combine to
produce outcomes?
o Dependent on nature of strategic environment
• Temptation to free ride (Prisoner's Dilemma) - Trade liberalization
• Inhibiting Fear (Assurance Game - Stag Hunt) - financial integration
• Where to meet (Coordination - Battle of the Sexes) - multinational negotiations
• Bargaining and cooperation
• Bargaining: zero-sum, redistributive - one actor made better off at expense of the other
