Beruflich Dokumente
Kultur Dokumente
I. Introduction (contd)
1. Levels of analysis: international (structural, systemic) vs. domestic 2. State (government, public sector) vs. society (markets, private sector)
I. Introduction (contd)
B. System Governance. Formulation, implementation, and enforcement of rules; promotion of cooperation; management of conflict
1. Governance without government; governance mechanisms (regimes) 2. Organizing principles: automaticity, supranationality, hegemony, pluralism (negotiation, cooperation)
I. Introduction (contd)
1. Liberalism 2. Realism (statism, economic nationalism, mercantilism) 3. Marxism (structuralism, historical materialism)
A. Focus: individuals, households, enterprises B. Nature of economic relations: harmonious; interests reconcilable C. Relationship between economics and politics: economics drives politics
A. Focus: states B. Nature of economic relations: conflictual (zero-sum game) C. Relationship between economics and politics: politics drives economics
A. Focus: classes, social forces B. Nature of economic relations: conflictual (zero-sum game) Relationship between economics and politics: economics drives politics
1. Definition: a broadening, deepening, and acceleration of interconnectedness of states and markets; networks of connections at intercontinental distances 2. Alternative views: from hyperglobalists to skeptics 3. Why do we care? By creating a dissonance between the jurisdiction of states and the domains of markets, globalization problematizes governance: who is in charge?
A. Liberalism: triumph of markets; good for economic welfare B. Realism: product of state policy; bad for power of states C. Marxism: triumph of markets; bad for poorer states and disadvantaged classes
A. Gold standard: What accounts for its stability and relatively smooth operation? B. Trade: What accounts for the free trade movement in the 1860s-70s? What accounts for the subsequent return to protectionism? C. Core-periphery relations: What accounts for the new imperialism?
A. No single (mono-causal) explanations; need to sift the evidence. B. No single rule for all regimes; different governance mechanisms can exist side by side
1. Major developments
A. Breakdown during World War I B. Attempted reconstruction during 1920s C. Renewed breakdown (Great Depression) during 1930s
2. Political economy issue: What explains the failure of the attempted reconstruction?
A. Liberalism: markets failed because of wrong-headed government policies B. Marxism: internal contradictions of capitalism C. Realism: absence of effective governance (theory of hegemonic stability)
1. Major developments
A. Creation of new international institutions: IMF, World Bank, GATT B. Cold War, leading to two separate blocs (EastWest) and the rest (Third World) C. Unprecedented economic growth D. Rise of Europe, Japan; East Asia; China E. Globalization F. Increased instability after 1971-73
A. What explains the origins of the postwar system? B. What accounts for the relative success of the system before the 1970s? C. What accounts for the increased instability after 1971-73? D. What can be done to manage the system in the future?
a. b. c. d.
1. Basic issue: as with trade, a tension between desire for the material benefits of an open system and pressure to promote/defend state and/or particularist interests
2. Basic concepts
a. Balance of payments; deficits b. Financing: reserves, borrowing, liquidity c. Adjustment: the Three Ds, Unholy Trinity
3. Postwar experience
a. IMF, Bretton Woods system b. Financing/liquidity: US dollar, SDRS, capital markets c. Adjustment: breakdown of pegged exchange-rate system d. Debt problems; financial crises
IX. Regionalism
1. Basic issue: between the national and global levels, regionalism can complicate the issue of system governance
2. Trade Regionalism (regional trade agreements)
i. For individual countries ii. For overall system (trade creation, trade diversion) i. First wave: 1950s-60s ii. Second wave since 1980s
c. Postwar experience
a. Types of monetary regionalism: horizontal, vertical b. Advantages and disadvantages c. Recent experience
i. Precedent of the euro ii. Rise of currency competition iii. Currency regime choices today
X. Economic Development
1. The developing world: differentiated, difficult to generalize 2. Postwar rules: based on principle of non-discrimination; trade was to function as an engine of growth 3. Postwar experience: mixed some success stories, many disappointments
X. Development (contd)
a. Liberalism: market failures -- weak demand, weak linkages, weak adaptive capacity b. Marxism: natural result of capitalism exploitation c. Realism: result of power politics
i. Role of great powers in writing the rules ii. Attempts at collective action by LDCs iii. Outcomes: partial success
X. Development (contd)
a. Export promotion
i. Traditional exports Problems: inelastic demand, protectionism Cartels? Three conditions necessary for success: control largest part of supply; no close substitutes; agreement on the sharing of benefits ii. Non-traditional exports: manufacturing, services
1. Basic problem: the environment is a collective good, shared by all and owned by none (tragedy of the commons); core issue is externalities, which can cross borders 2. Economic functions of the environment
a. A consumption good b. A supplier of resources c. A receptacle of wastes d. The problem: not always mutually consistent, hence a collective action problem a system governance issue
3. Practical dimensions
a. b. c. d.
XII. Energy
1. Importance: the worlds single most widely traded product 2. First regime: the Seven Sisters a classic cartel, successful because it met all three key conditions necessary for success: control of supply; no close substitutes; agreement on sharing of benefits 3. Second regime: OPEC
a. Dramatic emergence in 1973 b. Ups and downs of OPEC power since 1973
4. Reasons for variations of OPEC power over time back to the three key conditions for a successful cartel 5. OPECs biggest challenge: agreement on benefits (limiting free riding)
6. Prospects
a. Demand side (conservation) b. Supply side: exploration, technology, alternative forms of energy
a. Until 20th century, mostly extractive (farming, mining, etc.) b. Real growth began in 1950s, for 2 reasons
i. European Common Market (trade diversion) ii. Decolonization (ISI development strategies)
i. Increasing share of FDI from developing world ii. Most FDI goes to Europe and North America, not LDCs
i. Advantages: capital, technology, management expertise, market access ii. Disadvantage: loss of control
a. Distribution of power between states b. Distribution of power between states and markets c. Global security environment a. b. c. d. e. f. World economic government (supranationality) Renewed hegemony (US? Europe? Japan? China?) Cooperative regimes (automaticity + pluralism) Governance by MNCs Collapse and economic warfare A mosaic (all of the above)
2. Future scenarios