Transcript - Session 1: Introduction to IPE

European Governance,
Global Governance
Introduction to International Political
Economy
Kalypso Nicolaidis
Vincent Wright Chair, Sciences Po (2005)
Oxford University
European Governance
=> Global governance
Our EU-topia?
 The EU as an actor in its own right : economic
giant? Political actor? What kind of power

1)
2)
The EU as a possible model of integration
between states in the rest of the world
At the global level
 Discourse/reality
 neo-colonial vs post-colonial?
International Political
Economy
Questions:
 How to govern a world which is multipolar
economically and unipolar militarily? (eg can we
live with the US?)
 Can an international system which is a product
of US hegemony, and more broadly of western
hegemony, be made to serve the interests of
developing countries? (eg whose interests?!)
 Are regionalism and multilateralism contradictory
or complementary? (eg. Is the EU hypocritical?)
Questions (cd)…
 Should trade be used as an instrument to change
domestic governance arrangements, including for
instance human and labor rights? (eg is this not
economic imperialism?)
 What is the score-sheet of global governance
through public-private partnerships? (should we
like Bill Gates Global fund?)
 Has globalisation gone too far? (eg. A nos pavés!)
Questions (cd)
Check out the website: “making poverty
history”!
In what ways is the year 2005 - “the year of
development”- likely to make a difference ?
How can trade be used to combat global
poverty?
Questions (cd)…
Yahoo 1, 2, 3: Can state sovereignty survive
the era of the internet?
Can the WTO, IMF and World Bank really be
made more democratic? !
“alter-globalization” : good questions…good
solutions?
International Political Economy
Definitions:
Yesterday:
• John Stuart Mill “Political Economy teaches a
nation how to become rich” : The Wealth of Nations
Today:
David Lake: “IPE is the study of the interplay of
economics and politics in the world arena”
Economy: system of producing, distributing and
using wealth
Politics: set of institutions/rules governing social
and economic interactions
IPE - definitions
 • Robert Gilpin: “IPE is the study of the Problems
and Questions arising from the Parallel Existence
and Dynamic Interaction of State and Market.”
 • Both: Separation politics (states) and economics
(markets) and mutual influence
-> IS THIS ASSUMPTION FRUITFUL?
 The IPE as fundamental tension between state
power, competing ideas and transnational
economic exchange.
IPE theories and their limits
• Liberalism : IPE cooperative
Limits : markets as political institutions
• Marxism: IPE conflictual
Limits: modes of accomodation
• Realism: IPE conflictual
Limits: Prism of the state
• Institutionalism: IPE cooperative
Limits: socio-economic order of the CW
International Political Economy
Some History:
• The legacy: Adam Smith, John Stuart Mill, Karl Marx
• The Interwar divergence:
Professionalisation; micro-economics vs politics of war and
peace
• The Post-War II incipient debate:
- Cold War: Security at the Core -- Economics at the margin;
International Economic Rules as given
-Understanding the collapse of interwar (ec) order
- Politics of IOs: Analysis of the UN and desillusion
- post WWII trend towards policy analysis and
methodological emphasis; behavioralism
Some History (cd)
• The 1970s: The emergence of IPE as a distinct field of study
The Study of the EC and other regions: Integration theory, nefunctionalism (Mitrany, Haas)
-> how to account for such high levels of cooperation , voluntary
agreements and role of non-state actors
-> transnational communities, identity formation, communication
(Deutsch)
-> The fallacy of pessimistic induction
2) The end of US led global growth: economy is political
-> collapse of BW; OPEC: the politics of economic choices
-> The NIEO: the politics of the global economic order
-> GATT, Japan and the new protectionism: the political economy
of trade
-> Détente and the political function of ‘low politics’
• The 1970s (cd)
Some History
3) Economic Interdependence and transnational relations :
- Disaggregating “the state” (not a unified rational actors): ->
Pluralism and bureaucratic politics (Dahl)
- Ties across borders not controlled by the state
- MNEs (Vernon; Cooper)
- Cost and benefit of interdepence for state autonomy (Keohane
and Nye)
4) Realists address the challenge
- Defense of state-centred paradigm (Gilpin and Krasner)
- Hegemonic Stability: Power and liberalism
- English school of IPE (Susan Strange)
- SUM: IPE through the lenses of liberalism vs realism
Some History (cd)
• The 1980s: IPE takes central stage
1) -> The coming of age of Multinational Corporations
–FDI- Enters globalisation
-> Explosion of financial sphere; the rise of trade in services
-> The Reagan revolution on the neo-liberal ideology
-> The advent of structural conditionality; WTO round
-> The deepening of economic integration: state policies and
regulations in question
2) The new liberal challenge: Regime theory and neo-liberal
institutionalism
-> role of ideas and shared understandings, expectations
- > analogies from economic theory (transaction costs; market
failure); game theory as a euristic (Axelrod; Oye)
-> Anarchy yes/absence of rules no: commitments and reciprocity
-> Rationalist explanations of institutions (Keohane)
Some History (cd)
• The 1990s: PCW meets WWW
1) The end of the CW: Economics trumps security;
- change in the character of American leadership (contested); - the
use of sanctions as a political tool; The rise of regionalism
2) Globalization and its critics
- NGOs and two level games
- Technological change and IPE (communication studies)
- from state-dominated to market dominated world economy?
- Growing linkages between issue areas (trade and aid; environment;
trade and health; labor; human rights)
- IPE and international law
3) IPE meets political theory
- a) The Global Justice agenda
- b) the Global democracy and legitimacy agenda
- c) From politics of interests to the politics of identity
IPE themes
conflict/cooperation replaces war and peace
International institutions are norms not
places
 domestic politics/comparative politics
matter
IPE: Framing horizontal questions
• WHY? What is the driving force in the global economy?
In this case?
Market competition - Collective search for efficiency
 national ambitions and interstate rivalries
technology …OR Ideas and values
•WHO? Who adjusts?
Importer/ exporters
My constituency / your constituency
Low skill labor in the North/in the South
EU / candidate countries
•FOR WHOM? In Whose Interest? Great power; Collective;
those in need
International Political Economy
Caveat emptor (Ce que je crois)
-> An actor-centred “good story”
-> liberal assumptions: opportunity to cut deals;
positive sum game; shared stake in a stable
international economic order; governance issues
-> realist assumptions: state centric but not
always relative gains
-> outside liberal framework: issues of global
justice, issues of identity and norms
-> Structure and agency
-> Role of narratives: “Europe as a model”