Public Policy 429 FOUNDATIONS OF INTERNATIONAL POLITICAL ECONOMY

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1 Public Policy 429 FOUNDATIONS OF INTERNATIONAL POLITICAL ECONOMY Harris School of Public Policy Studies The University of Chicago Winter 2006 Tuesdays 3:30-6:20pm (Room 140A) Professor Lloyd Gruber Office: Harris School Phone: (773) Office Hours: Thursdays 3:00-4:00 p.m. or by appointment Course Objectives: This graduate seminar is designed to acquaint students with some of the major theoretical perspectives and controversies in the international political economy literature. The course is organized around four different two- or three-week modules: (1) what is political economy? (2) why do nations cooperate? (3) how do nations cooperate? and (4) special topics. While the seminar does examine a number of empirical applications e.g., the politics of European monetary unification our primary focus will be on basic logical questions, lines of reasoning, and analytical frameworks. Students interested in the policy implications of recent IPE. research should consider taking one (or all!) of the other courses I will be offering this year. These include U.S. Foreign Economic Policy (Public Policy 428), which meets this term on Tuesday and Thursday afternoons from 1:30-2:50pm; Managing Globalization (Public Policy 427, spring term), and Analyzing International Policy (Public Policy 434, spring term). The first of these provides an analytical foundation for understanding a range of foreign economic policy issues now confronting the United States. The second course, Managing Globalization, asks whether, when, and how government intervention might be used to ease the dislocations created by the continuing spread of market forces. Analyzing International Policy is designed to help aspiring policymakers improve their ability to analyze concrete questions of international economic and national security policy. Format: All students are expected to read the assigned materials for each class and to contribute actively to seminar discussion. In addition, two students will introduce discussion by critically examining the week s readings. Presentations should not last longer than 15 minutes. Assessment: Each students is required to write three papers of no more than 2,000 words each (about seven pages). Papers should critically evaluate a week s readings, pointing to shortcomings of the works analyzed and suggesting how these might be improved upon; papers should not merely re-state the arguments made in the readings. Students are strongly urged to write one of their papers on the readings discussed in the first part of the course. All papers are due at the beginning of the class to which they pertain; late papers will not be graded. Upon special petition, students may opt to write a single research paper of at least 7,000 words (about 25 pages). Written assignments will count as 75% of the final grade; seminar participation will count for the remaining 25%.

2 PP429: Foundations of International Political Economy, Prof. Gruber (Winter 06) Page 2 Prerequisites: This course presumes some background in international relations and international political economy. Permission for enrollment will be given before the second class session. Readings: All of the books listed below have been ordered at the Seminary Coop Bookstore. I ve also asked the Regenstein Library to put their copies on reserve. The readings not included in these books are marked by an asterisk (*) and can be downloaded directly from the Course Documents folder at the course website. 1. James E. Alt and Kenneth A. Shepsle, eds., Perspectives on Positive Political Economy (Cambridge, 1990). 2. Robert Axelrod, The Evolution of Cooperation (Basic Books, 1984). 3. David A. Baldwin, ed., Neorealism and Neoliberalism: The Contemporary Debate (Columbia, 1993). 4. Anthony Downs, An Economic Theory of Democracy (Harper & Row, 1957). 5. Robert Gilpin, Global Political Economy: Understanding the International Economic Order (Princeton, 2001). 6. Judith Goldstein and Robert O. Keohane, eds., Ideas and Foreign Policy: Beliefs, Institutions, and Political Change (Cornell, 1993). 7. Joanne Gowa, Allies, Adversaries, and International Trade (Princeton, 1994). 8. Donald P. Green and Ian Shapiro, Pathologies of Rational Choice Theory: A Critique of Applications in Political Science (Yale, 1994). 9. Lloyd Gruber, Ruling the World: Power Politics and the Rise of Supranational Institutions (Princeton, 2000). 10. Robert O. Keohane and Helen V. Milner, eds., Internationalization and Domestic Politics (Cambridge, 1996). 11. Lisa Martin, Coercive Cooperation: Explaining Multilateral Economic Sanctions (Princton, 1992). 12. Helen Milner, Interests, Institutions, and Information: Domestic Politics and International Relations (Princeton, 1997). 13. Mancur Olson, The Logic of Collective Action (Harvard, 1965). 14. Ronald Rogowski, Commerce and Coalitions: How Trade Affects Domestic Political Alignments (Princeton, 1989). 15. Thomas Schelling, The Strategy of Conflict, 2nd ed. (Harvard, 1960/1980).

3 PP429: Foundations of International Political Economy, Prof. Gruber (Winter 06) Page 3 COURSE OUTLINE AND READING LIST WEEK 1: OVERVIEW AND LOGISTICS (January 3) -- Useful background for introductory session: Kenneth N. Waltz, Theory of International Politics (Addison-Wesley, 1979). Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy (Princeton, 1984) esp. chs Robert O. Keohane, ed., Neorealism and Its Critics (Columbia, 1986) esp. intro, selections by Ruggie, Keohane, and Gilpin, and Waltz s response in chapter 11. Robert Gilpin, Global Political Economy: Understanding the International Economic Order (Princeton, 2001). Note: The Gilpin text is available for purchase at the Seminary Coop Bookstore, and all four of these volumes have been placed on reserve at the Reg. PART I. WHAT IS POLITICAL ECONOMY? WEEK 2: THREE MODERN CLASSICS (January 10) Mancur Olson, The Logic of Collective Action, intro and chs. 1, 2, 4, 5, 6. Anthony Downs, An Economic Theory of Democracy, chs. 2, 4, 7, 8. Thomas Schelling, The Strategy of Conflict, chs. 2 & 3. WEEK 3: POLITICAL ECONOMY AS THE MICROECONOMICS OF POLITICS (January 17) James E. Alt and Kenneth A. Shepsle, eds. Perspectives on Positive Political Economy, chs. by Ordeshook, Bates, Riker. * Armen A. Alchian, Uncertainty, Evolution, and Economic Theory, Journal of Political Economy, 58 (June 1950), pp Donald P. Green and Ian Shapiro, Pathologies of Rational Choice Theory, chs. 1 & 2. Lisa Martin, Coercive Cooperation, chs. 1, 2, 3, 4-skim, 6. Jeffrey Friedman, ed. The Rational Choice Controversy: Economic Models of Politics Reconsidered (Yale, 1996). [on reserve at Regenstein]

4 PP429: Foundations of International Political Economy, Prof. Gruber (Winter 06) Page 4 PART II. WHY DO NATIONS COOPERATE? WEEK 4: THE HAZARDS OF GLOBAL INTERDEPENDENCE (January 24) * Peter Gourevitch, The Second Image Reversed: The International Sources of Domestic Politics, International Organization, 32 (Autumn 1978), pp Ronald Rogowski, Commerce and Coalitions, preface & chs. 1, 3, 4, 6-optional. Jeffry A. Frieden and Ronald Rogowski, The Impact of the International Economy on National Policies: An Analytical Overview, in Keohane/Milner volume. Geoffrey Garrett and Peter Lange, Internationalization, Institutions and Political Change, in Keohane/Milner. Michael J. Hiscox, International Trade and Political Conflict (Princeton, 2002). [on reserve at Regenstein] WEEK 5: THE PROBLEM OF COOPERATION: THEORETICAL INNOVATIONS SINCE OLSON (Jan. 31) Arthur Stein, Coordination and Collaboration: Regimes in an Anarchic World, International Organization, 36 (Spring 1982), pp [reprinted in Baldwin volume -- read this selection before reading Axelrod] Robert Axelrod, Evolution of Cooperation, chs. 1, 2, 3, 4-optional, 9. Baldwin volume, selections by Grieco (5), Snidal (7), Powell (8), Keohane (11), and Grieco (12). Joanne Gowa, Allies, Adversaries, and International Trade, chs. 3 & 4 (skim ch. 5). John J. Mearsheimer, The False Promise of International Institutions, International Security, 19, no. 3 (Winter 1994/95), pp WEEK 6: THE IL-LOGIC OF COLLECTIVE ACTION THEORY: A SAMPLING OF ALTERNATIVE APPROACHES (February 7) Green and Shapiro, Pathologies of Rational Choice Theory, chs. 3, 5, 8. Judith Goldstein and Robert O. Keohane, eds., Ideas and Foreign Policy, ch. 1. * Peter M. Haas, Introduction: Epistemic Communities and International Policy Coordination and Banning Chlorofluorocarbons: Epistemic Community Efforts to Protect Stratospheric Ozone, International Organization, 46, no. 1 (Winter 1992), pp & * Alexander Wendt, Social Theory of International Politics (Cambridge, 1999), chapter 6. * Michael Barnett and Bud Duvall, Power in Global Governance, in Barnett and Duvall, eds., Power and Global Governance (Cambridge: Cambridge University Press, 2005). Martha Finnemore, National Interests in International Society (Cornell, 1996). [on reserve at Regenstein]

5 PP429: Foundations of International Political Economy, Prof. Gruber (Winter 06) Page 5 PART III. HOW DO NATIONS COOPERATE? WEEK 7: POWER, BARGAINING, AND ECONOMIC DIPLOMACY (February 14) * Albert O. Hirschman, National Power and the Structure of Foreign Trade (Berkeley, 1945/1980), pp. v- xii, 13-40, * Stephen D. Krasner, State Power and the Structure of International Trade, World Politics, 28 (April 1976), pp * Daniel W. Drezner, Conflict Expectations and the Paradox of Economic Coercion, International Studies Quarterly, 42 (1998), pp * Stephen D. Krasner, Global Communications and National Power: Life on the Pareto Frontier, World Politics, 43 (April 1991), pp [an abridged version is reprinted in Baldwin volume] Lloyd Gruber, Ruling the World, preface and chs. 1, 2, 3, and 7. Robert Powell, In the Shadow of Power: States and Strategies in International Politics (Princeton, 1999). [on reserve at Regenstein] WEEK 8: FROM ANARCHY TO ORGANIZATION: THE EFFICIENCY RATIONALE FOR SUPRANATIONAL GOVERNANCE (February 21) * Terry M. Moe, The New Economics of Organization, American Journal of Political Science, 28 (November 1984), pp Alt and Shepsle, eds. Perspectives on Positive Political Economy, ch. by Milgrom/Roberts. * Keohane, After Hegemony, chs. 6 & 7. * Paul R. Milgrom, Douglass C. North, and Barry R. Weingast, The Role of Institutions in the Revival of Trade: The Medieval Law Merchant, Private Judges, and the Champagne Fairs, Economics and Politics, 2 (March 1990), pp * Geoffrey Garrett and Barry R. Weingast, Ideas, Interests and Institutions: Constructing the EC s Internal Market, in Goldstein/Keohane volume, pp * Stephen D. Krasner, Sovereignty: Organized Hypocrisy (Princeton, 1999), ch. 1. * G. John Ikenberry, After Victory: Institutions, Strategic Restraint, and the Rebuilding of Order After Major Wars (Princeton, N.J.: Princeton University Press, 2001), ch. 3. David A. Lake, Entangling Relations: American Foreign Policy in Its Century (Princeton, 1999). [on reserve at Regenstein]

6 PP429: Foundations of International Political Economy, Prof. Gruber (Winter 06) Page 6 WEEK 9: THE INTERNATIONAL CONSEQUENCES OF DOMESTIC UNCERTAINTY (Feb. 28) * Robert Putnam, Diplomacy and Domestic Politics: The Logic of Two-Level Games, International Organization, vol. 42 (Summer 1988), pp Helen Milner, Interests, Institutions, and Information, chs. 1 & 3. * George W. Downs and David M. Rocke, Optimal Imperfection? Domestic Uncertainty and Institutions in International Relations (Princeton, 1995), chs. 1 & 4. Lloyd Gruber, Ruling the World, chs. 4, 5, and 6. * Judith Goldstein, International Law and Domestic Institutions: Reconciling North American Unfair Trade Laws, International Organization, 50, no. 4 (Autumn 1996), pp Mancur Olson, Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships (Basic, 1999). [on reserve at Regenstein] PART IV. SPECIAL TOPICS WEEK 10: THE POLITICAL ECONOMY OF EUROPEAN MONETARY UNIFICATION (Mar. 7) * Barry Eichengreen and Jeffry Frieden, The Political Economy of European Monetary Unification: An Analytical Introduction, in Eichengreen and Frieden, eds., The Political Economy of European Monetary Unification (Westview 1994), * Jeffry Frieden, Making Commitments: France and Italy in the European Monetary System, , in Eichengreen/Frieden, eds., The Political Economy of European Monetary Unification, pp Lloyd Gruber, Ruling the World: Power Politics and the Rise of Supranational Institutions (Princeton, 2000), ch. 8. * Geoffrey Garrett, The Politics of Maastricht, in Eichengreen and Frieden, eds., The Political Economy of European Monetary Unification, pp * Andrew Moravcsik, A New Statecraft? Supranational Entrepreneurs and International Cooperation, International Organization, 53, no. 2 (Spring 1999), pp * Joseph M. Grieco, State Interests and Institutional Rule Trajectories: A Neorealist Interpretation of the Maastricht Treaty and European Economic and Monetary Union, Security Studies, 5 (Spring 1996), pp Helen Milner, Interests, Institutions, and Information, pp and ch. 8. Andrew Moravcsik, The Choice for Europe: Social Purpose and State Power from Messina to Maastricht (Cornell, 1998). [on reserve at Regenstein]

7 PP429: Foundations of International Political Economy, Prof. Gruber (Winter 06) Page 7 WEEK 10½: LOOKING TO THE FUTURE NB: Our final meeting will take place at a date, time, and location to be determined. Come prepared to discuss the topic: What is the most critical theoretical issue in IPE. research today? A (very) informal dinner will be served following our discussion. * Peter J. Katzenstein, Robert O. Keohane, and Stephen D. Krasner, International Organization and the Study of World Politics, International Organization, 52, no. 4 (Autumn 1998), * Geoffrey Garrett, Global Markets and National Politics: Collision Course or Virtuous Circle? International Organization, 52, no. 4 (Autumn 1998), Lloyd Gruber, Ruling the World, ch. 10. * Arthur A. Stein, The Limits of Strategic Choice: Constrained Rationality and Incomplete Explanation, in David A. Lake and Robert Powell, eds., Strategic Choice and International Relations (Princeton, 1999), pp