Introduction to International Political Economy
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Introduction to International Political Economy

David N. Balaam, Bradford Dillman

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eBook - ePub

Introduction to International Political Economy

David N. Balaam, Bradford Dillman

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About This Book

In a revolutionary revision of this best-selling text, David Balaam and Bradford Dillman show how the postwar world order is at once under threat and yet resilient. This classic text surveys the theories, institutions, and relationships that characterize IPE and highlights them in the context of a diverse range of regional and transnational issues. Introduction to International Political Economy positions students to critically evaluate the global economy and to appreciate the personal impact of political, economic, and social forces.

New to the Seventh Edition

  • Streamlined yet comprehensive coverage—reducing the text from 20 to 17 chapters. There is also one unified chapter on global finance and a single chapter on energy and the environment.
  • A new chapter on Constructivism shows sociological and ideational forces at work.
  • A new chapter on Global Production encompasses transnational corporations and labor.
  • A new chapter on Global Health incorporates food and refugee issues.
  • Substantial revisions to 10 chapters, including new material on Brexit, the EU debt and refugee crises, populist-nationalist movements, inequality, trade conflicts and negotiations, cyber weapons, the rise of China, Middle East conflicts, and international responses to climate change.
  • Significant focus throughout on President Trump's impact on U.S. foreign policy, international order, and global security.
  • Extensive new graphs and tables of data, plus 27 fascinating new text boxes throughout.
  • An author-written Instructor's Manual and Test Bank are provided along with additional online resources.
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Information

Publisher
Routledge
Year
2018
ISBN
9781315463438

CHAPTER
1
What Is International Political Economy?

fig1_2_1.tif
Standing on the Precipice.

Source: Shutterstock
The fate of our times is characterized by rationalization and intellectualization and, above all, by the “disenchantment of the world.”
Max Weber1
In the last few years, a number of global problems and conditions have caused many people of different political stripes to become anxious, frustrated, and even angry. Consider some of the dramatic and distressing upheavals in the world recently:
The unexpected election of Donald Trump as president of the United States;
The retreat of democracy, political freedoms, and civil liberties in a number of countries;
War and war crimes in the Middle East, particularly in Syria, Iraq, and Yemen;
North Korea’s development and testing of nuclear weapons and long-range missiles to carry nuclear warheads;
The worst global refugee crisis since World War II; and finally
The withdrawal of the United States from the Paris accord on global climate change.

IS THE POSTWAR WORLD ORDER OVER?

As writers and editors of this textbook, we believe that these issues are indeed legitimate reasons to feel anxious, if not greatly concerned or even frightened. Although many of these sorts of conditions have occurred before in the global political economy, what is different now is the growing feeling that rapid change is causing political, economic, and social instability. One way to try to make sense of things in the “age of anxiety” is to reflect on the extent to which these developments point to the breakdown of the “postwar world order.” This term refers to a global management structure that began in 1944 when the allies met during World War II in Yalta to discuss the future of Europe.
For the past three-quarters of a century the world’s “Great Powers” have avoided a nuclear war and another conventional war like World War II. At times the two superpowers—the United States and the Soviet Union—fought “proxy wars” indirectly against one another via surrogate states in order to limit the possibility of engaging one another directly. The postwar order has also promoted development in former colonies and conditioned the actions of international organizations and businesses by gradually expanding liberal international trade and monetary policies. Still another objective of the world order was to allow a space for nongovernmental organizations (NGOs) and civil society to affect issues such as political rights and liberties, education, the environment, and labor.
We may think of the postwar order as a global regime made up of rules, norms, and decision-making procedures. Regimes tend to sustain themselves over a period of time because states and other actors agree to behave in a certain manner, which becomes ingrained in policy ideas and processes. At the same time, we know that structures are not static but are transformed over time. A central issue this text addresses is the extent to which the third phase of the postwar order is ending and transitioning into a new order.
We argue that the upheavals mentioned above contribute to and reflect the unraveling of the international configuration of political and economic power that has been in place since 1944. We divide the postwar order into three distinct phases: 1944–1973, 1974–1991, and 1992–2017. A gradual redistribution of wealth and power within the postwar order shifted the values and goals of different actors within it. None of these phases has an abrupt beginning or end; some characteristics from one phase will persist into the next. However, we contend that there is a distinct zeitgeist and set of features in each phase.
We use an analytical approach that describes, explains and offers some solutions to the problems mentioned above. What follows is a discussion of key analytical tools and frameworks of analysis in IPE that can help students describe and explain issues mentioned throughout the textbook.

THE FIELD OF INTERNATIONAL POLITICAL ECONOMY

When defining IPE, we make a distinction between the term “international political economy” and the acronym “IPE.” The former refers to what we study—a field of inquiry that focuses on actors and issues that are either “international” (between nation-states) or “transnational” (across the national borders of two or more states). Many analysts use the term “global political economy” instead of “international political economy” to label the study of problems such as climate change, hunger, and illicit markets that have spread over the entire world. More often than not, the two terms are used interchangeably.
In addition to the field of study just described, the acronym “IPE” also connotes a multidisciplinary method of inquiry. The primary objective of this textbook is to help you understand the interconnections between political, economic, and social topics that are not accounted for in separate disciplines. IPE combines and synthesizes a number of concepts, methods, and insights derived from economics, political science, and sociology. While drawing on history and philosophical ideas, it offers a more comprehensive and compelling explanation of global processes managed by governments, businesses, and social forces in different geographical areas. The four dominant IPE “perspectives” are discussed in detail below and outlined in Table 1.1.
IPE today also represents an effort to return to the kind of analysis done by political theorists and philosophers before the study of human social behavior became fragmented into discrete fields in the social sciences. Both Adam Smith and Karl Marx, for example, considered themselves to be political-economists in the broadest sense of the term. Although disciplinary specialization enhances analytical efficiency, a single discipline offers an incomplete explanation of global events. The tendency of disciplines is to “cram” data, ideas, and conditions into restricted intellectual and analytical boundaries. In some cases this results in a narrow- mindedness in which explanations lack complexity and factors that do not fit comfortably within a discipline’s dominant framework are dismissed.
What are some of the central elements of the antecedent fields of study that contribute to IPE? First, IPE includes a political dimension that accounts for the use of power by individuals, domestic groups, states (acting as single units), international organizations, NGOs, and transnational corporations (TNCs). All these actors make decisions about the distribution of tangible things in the world such as money and products or intangible things such as security and innovation. In almost all cases, politics involves the making of rules pertaining to how states and societies achieve their goals. Another aspect of politics is the kind of public and private institutions that have the authority to pursue different goals.
Second, IPE involves an economic dimension that deals with how scarce resources are distributed in markets among individuals, groups, and nation-states. Today, markets are not just places where people go to buy or exchange things face-to-face; markets also exist online. The market can also be thought of as a driving force that shapes human behavior. When consumers buy things, when investors purchase stocks, and when banks lend money, their depersonalized transactions constitute a vast, sophisticated web of relationships that coordinate economic activities all over the world. The political scientist Charles Lindblom makes an interesting case that the economy is actually nothing more than a system for coordinating social behavior. Agricultural markets shape what people eat, labor markets shape people’s occupations and living standards, and relaxation markets even organize what people do when they are not working. In effect, markets often perform a social function of “coordination without a coordinator.”2
Third, the works of such notables as Lindblom along with economists Robert Heilbroner and Lester Thurow help us realize that IPE needs to reflect on the societal dimension of different international problems.3 Many IPE scholars argue that states and markets do not exist in a social vacuum. There are usually many different social groups within a state who share identities, norms, and associations based on tribal ties, ethnicity, religion, or gender. Likewise, a variety of transnational groups (referred to as global civil society) have interests that cut across national boundaries. A host of NGOs have attempted to pressure national and international organizations on such issues as climate change, refugees, migrant workers, and gender-based exploitation. All of these groups are purveyors of ideas that potentially generate tensions between them and other groups but play a major role in shaping global behavior.
Rather than using a single political, economic, or sociological approach, IPE employs a variety of theories and analytical tools that help us gain a more sophisticated understanding of the complex interrelationships between the state, market, and society in different nations. While this statement might sound a bit formal and confusing, keep in mind that we do not think you need to be an economics major or a finance specialist to understand the basic parameters of major IPE issues such as the global financial crisis and trade policy. In fact, this book is written for students who have limited background in political science, economics, and sociology, as well as for those who want to review IPE topics in preparation for graduate school. Those who study IPE are, in essence, breaking down the analytical and conceptual boundaries between politics, economics, and sociology to produce a unique explanatory framework.

Different Perspectives and Methodologies in IPE

The late political economist Susan Strange, a major force in the development of the field of IPE, suggests that we focus on a number of common conceptual issues and tools that cut across disciplinary boundaries. Her starting point for studying the relationships between states, markets, and society in the international political economy is to focus on the question of cui bono? (Who benefits?).4 We then apply her framework to four dominant perspectives in IPE: economic liberalism, mercantilism, structuralism, and constructivism. A strict distinction between these perspectives is quite arbitrary and has been imposed by disciplinary tradition, at times making it difficult to appreciate their connections to one another. Each focuses on the relationships between a variety of actors and institutions. Each perspective emphasizes specific values, actors, and solutions to policy problems but also overlooks some important elements highlighted by the other three perspectives (see Table 1.1).
Economic liberalism (particularly neoliberalism—see Chapter 2) is most closely associated with the study of markets. Later we will explain why there is an increasing gap between orthodox economic liberals, who champion free markets and free trade, and heterodox economic liberals, who support more stat...

Table of contents

Citation styles for Introduction to International Political Economy
APA 6 Citation
Balaam, D., & Dillman, B. (2018). Introduction to International Political Economy (7th ed.). Taylor and Francis. Retrieved from https://www.perlego.com/book/2193435/introduction-to-international-political-economy-pdf (Original work published 2018)
Chicago Citation
Balaam, David, and Bradford Dillman. (2018) 2018. Introduction to International Political Economy. 7th ed. Taylor and Francis. https://www.perlego.com/book/2193435/introduction-to-international-political-economy-pdf.
Harvard Citation
Balaam, D. and Dillman, B. (2018) Introduction to International Political Economy. 7th edn. Taylor and Francis. Available at: https://www.perlego.com/book/2193435/introduction-to-international-political-economy-pdf (Accessed: 15 October 2022).
MLA 7 Citation
Balaam, David, and Bradford Dillman. Introduction to International Political Economy. 7th ed. Taylor and Francis, 2018. Web. 15 Oct. 2022.