International Political Economy (IPE) as a discipline and field of enquiry has An over over-riding question about the inter-relationship between politics and. Liberal IPE has always maintained a special relationship with its absentee Liberal international political economy (IPE) is the offspring of a marriage between. International Political Economy (IPE) is a social science that attempts to Although it originally developed as a sub-field of International Relations, it has in recent of the continuing breakdown of boundaries between economics, politics, and.
Yet scholars and policy-makers often think about International Economics without much attention to International Politics and vice versa. Economists often assume away state interests while political scientists sometimes fail to look beyond the nation-state.
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Two noteworthy Cold War era exceptions to this rule stand out: Dramatic events in the s made plain how tightly international economics and politics were intertwined. The oil embargoes of the s and the breakdown of the Bretton Woods monetary system were key events in IPE's development as a field of study. Moreover, subsequent events such as the Third World debt crisis, the fall of communist regimes, the rise of the Newly Industrialized Countries NICSthe expansion of the European Union, and the financial crises in Mexico, Russia, and East Asia made showed that simple divisions between state and market, domestic and international, and politics and economics were no longer tenable.
An increasingly complex world required a complex approach to analysis, which IPE provided. A sixth concern — globalization — was added to the list in the s. Since the s, IPE has devoted significant attention to global threats and crises, including climate change and worldwide financial instability.
International Trade Politics and Economics approach international trade from different points of view using completely different analytical frameworks. The problem is that states think in terms of geography and population, which are the relatively stable factors that define its domain, while markets are defined by exchange and the extent of the forward and backward linkages that derive therefrom. The borders of markets are dynamic, transparent, and porous; they rarely coincide exactly with the more rigid borders of states.
A few markets today are even global in their reach.
When trade within a market involves buyers and sellers in different nation-states, it becomes international trade and the object of political scrutiny. International trade has always been at the center of IPE analysis and is likely to remain so in the future.
It is a mirror that reflects each era's most important state-market tensions. In the Cold War, for example, international trade was simultaneously a structure of US hegemony and a tool of East-West strategy. In the s and s, trade through regional economic integration was a tool to consolidate regional interests. With the advent of globalization and the creative economy powered by information technologies, trade in intellectual property rights became me a controversial IPE issue.
International Finance International Finance presents the second set of problems that have traditionally defined International Political Economy. The IPE of International Finance includes analysis of exchange rate policies, foreign exchange systems, international capital movements, and international financial institutions such as the World Bank and the International Monetary Fund. Seemingly technical aspects of international finance often hide profound political implications, a fact that has attracted scholars such as Susan Strange and Benjamin J.
Cohen to this field. Political scholars may hesitate to engage in this analysis because of the necessity to master difficult theories and arcane terminology, but there is no riper area for IPE analysis. Some issues of current importance in IPE studies of finance include: Hegemony The theory of hegemonic stability was arguably IPE's most important contribution to Cold War international relations theory.
A hegemon is a powerful state that supplies public goods to the international system. These public goods include stable money, security such as freedom of the seasand a system of free trade that can be shared by all.
Providing these public goods is costly, but the hegemon gains even if it disproportionately bears the expense alone. If the world system prospers, the hegemon necessarily prospers as well.
In fact, this provision of public goods may be a strategy to secure or extend the hegemon's dominant position. The theory of hegemonic stability holds that the world system is most prosperous when a hegemon exists to organize the international political and economic system and coordinate the provision of international public goods.
Liberal Perspectives on the Global Political Economy
Periods of DutchBritishand U. When hegemony breaks down, however, the international system falls into disorder and conflict, with the resulting decline in peace and prosperity.
One can think of the theory of hegemonic stability as a theory of U. Cold War economic statecraft, with the Bretton Woods system and the Marshall Plan its clearest manifestations. Some scholars argue that hegemony is a self-defeating and therefore temporary condition. While the hegemonic state bears the burdens of organizing the international system and supplying public goods, free-rider states prosper and increase the burdens on the hegemon.
She labels approaches working in this manner, economistic. These contested definitions are of political importance, since e. De Goedep. The problem of defining politics and economics is articulated by Tooze and Murphy a, p. De Goedepp. De Goede thus chooses as she herself acknowledges a poststructuralist approach on IPE in analysing the discursivity of reality and thus, in contrast to all previously depicted approaches, does neither depict economics nor politics as ontologically prior to the other.
Consequently, in her view, economics and politics are simply not separable. According to my findings, Wolinpp. Furthermore, they share the believe, that the economic sphere most oftenly depicted as the market will work best, which means that it will produce most wealth, when it is principally left alone.
Politics as the state is depicted in antagonism to economics, whereas politics is understood as an intervention into the logics of the market. Thus, though they as well depict a primacy of economics as the process of capital accumulation over politics as the statethey in contrast to the liberal strand value it negatively. Accordingly realists, following the mercantilist concept, emphasise the primacy of politics.
In sum, these information yield the following table: He rather sees a difficulty in distinguishing normative and analytical aspects in their approaches.
However, Strange hints at another aspect the realist and liberal strands share: They usually equate politics with the state and economics with the market. But she is not alone with her criticism. Ac- cording to Bielingp. Though today economics and politics are no longer seen as completely indepen- dent spheres, many orthodox approaches seem insufficient insofar as they do not enable a questioning of important features of the economic or political as e.
No such distinction exists beyond history.
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Thus through accepting the separation, its inherent political struggles are taken as unproblematic and the political character of the currently accepted boundaries to con- temporary disciplines are veiled. Furthermore, the problem arises, that economics and politics can be taken as un- problematic, or as Strangepp. This can probably be seen as a result of different processes: First, as we have seen, many scholars copy from older traditions.
In this case it at- tracts attention that political economy seems to have laid the ontological foundations of many approaches of IR and IPE scholars regarding the separation and relationship of politics and economics. Secondly, following Strange or Bieling respectively these paradigms can be understood as ideological schools across the disciplines or at least as partly normative traditions, which compete with each other, and also define themselves in distinguishing themselves from the others.
In this case through different understand- ings of the relationship. And third, it might be due to — in the words of Strangep. We can state that these strands all share the conception of politics and economics most oftenly as referring to the state and the market as a duality or antagonism.
The origin of this perception seems to be the writings of Adam Smith.Currency Politics: The Political Economy of Exchange Rate Policy
This seperation is, as I have depicted, finally based on the emergence of the idea of an economic materi- ality, where there should be no interfering authority and thus on the conception of the idealism-materialism and state-economy duality. From then on it has been ever repro- duced and has been placed as a central concept to many approaches in all these here depicted disciplines.
In the last section we have seen that the separation poses serious analytical problems to the field of IPE. Problems which have already been addressed by so called heterodox authors. The materialism-idealism separation underlying the politics-economics separation is — according to Hansenp.
It would be interesting to see whether other philosophies can prove useful for building IPE approaches not relying on the politics-economics separation. Three Modes of Economism. International Studies Quarterly, 27— Beyond the objectivist and the subjectivist: Learning to read accounting as text.
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Accounting, Organizations and Society, 14— Beyond economism in international political economy. Review of International Studies, 2979— The Politics of Transnational Economic Relations.
International Organization, 25—