VI. International Political Economy

OVERVIEW OF THE GLOBAL ECONOMY:

• Be able to define "international political economy"
  -state
  -market
• Understand the general features of these worldviews:
  -mercantlism (sometimes called economic nationalism and neo-mercantilism)
  -liberalism (sometimes called commercial liberalism/ laissez faire/ neoliberalism)
  -dependency theory and world systems theory (sometimes called structuralism)
• Understand the differences between market and command economies
  -transitional economies

Sector	Major Actors	Regime	Debates/Controversies
MONETARY	-States -"Electronic Herd"	-floating exchange rates	-fixed/floating exchange rates -"dollarization"
FINANCE	-IMF/World Bank -States -"Electronic Herd"	-reduced capital controls -liberal finance	-capital controls v. liberal finance -state macroeconomic sovereignty -SAPs in 3w
TRADE	-WTO (GATT) -States -NGOs	-free trade	-free v. "fair" trade -economic nationalism -environment; labor rights -WTO arbitration panel -industrial policy debates
PRODUCTION	-MNCs -NGOS -States	-New International Division of Labor -intrafirm trade	-N/S inequality -Foreign investment: dev or dep? -wage/regulation arbitrage (state sov)

NORTH-SOUTH

• Be able to relate present North-South tensions to the history of colonialism, imperialism and decolonization
• Understand the controversy over defining the "Global South"
  -development
  -less-developed countries (LDCs)
  -developing countries
  -underdevelopment/ underdeveloped countries (UDCs)
  -emerging markets
• Be able to indicate ways that we define a country in the "Global South"
• Be able to explain some of the basic features of "capitalism"/ socialism/ Marxism
  -capital
  -private ownership
  -commodity
  -wage labor
  -economic class
  -bourgeoisie/proletariat
  -world-system/ core/periphery/semiperiphery
  -imperialism
  -dependency
  -neocolonialism
• Be able to clarify some of the basic concepts related to the attempt to alleviate poverty:
  -basic human needs
  -sustainable development
  -urbanization
  -land reform
  -malnutrtion
  -cash crops
  -subsistence
  -migration/refugees
  -state failure

TRADE

• distinguish mercantilism, liberalism, and structuralism (review from above)
• be able to explain the idea of comparative advantage
• be able to explain balance of trade
  -trade surplus
  -trade deficit
• Understand the origins and evolution of the GATT agreement
  -MFN concept
  -GSP concept
  -multilateralism
• Explain the basic features of the World Trade Organization
  -arbitration council
  -intellectual property rights
• Be familiar with the following concepts related to the politics of trade:
  -autarky
  -protectionism
  -infant industry protection
  -tariff
  -nontariff barriers
  -quota
  -dumping
• Be familiar with the concept of regional trading bloc and free trade areas
  -NAFTA/ EU/ Mercosur/ ASEAN, etc.
• Be prepared to defend a particular viewpoint that is most compelling to you
  -do you find support of free trade the best idea?
  -does economic nationalism make more sense?
  -do you think that dependency theorists are more realistic about the way the world really works?

MONEY/FINANCE

• Understand the basic features of international currency exchange:
  -fixed exchange rates
  -floating exchange rates/ convertible currency/ managed float system
  -gold standard
  -reserves/ hard currency
  -devaluation
• Understand the pluses and minuses of the present "floating exchange rate" regime (ie "why currencies rise and fall")
• Be able to explain how currency exchange rates affect trade and (as we'll see later) production.
• Be able to give an overview of the (now defunct) "Bretton Woods system"
• Be familiar with the following important international organizations:
  -World Bank
  -International Monetary Fund (IMF)
  (can you explain how they're different? better.. can you explain why they are so controversial?)
• Understand the basic economies of states as actors in the IPE & the following concepts:
  -balance of payments/ current account
  -foreign exchange reserves
  -external debt/ national debt/ budget deficit
  -monetary policy
  -fiscal policy
• Be familiar with the way the world economy is often divided into distinct "regions"
  -the idea of the "Triad" (North America/EU/Japan-East Asia)
  -peripheral regions: Latin America/Middle East/Subsaharan Africa/Central Asia/South Asia/Eastern Europe/Southeast Asia

PRODUCTION

• Be able to define a Multinational Corporation (MNC)
  -intrafirm trade
  -strategic corporate alliances
• What is the difference between Foreign Direct Investment (FDI) and foreign portfolio investment ?
  -host country
  -home country
  (can you explain pros and cons for FDI and portfolio investment for host and home countries?)
• Understand the tensions between MNCs and states (ie states v. markets!)
  -idea of "race to the bottom"
• Be familiar with the ways that MNCs have globalized production in many important sectors
  -thus: how does this impact conventional notions of "trade"?
  -does this help or harm host and home countries?
• Can you see how trade, money and production in fact all go together in the global economy?
• Can you understand why there were protestors against the WTO in Seattle in 1999? The IMF and World Bank in 2000? Why did they pick those places to protest -- and not somewhere else? What does this tell us about changes in the international system?