Theories of International Political Economy II: Marxism and Constructivism

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1 Theories of International Political Economy II: Marxism and Constructivism Min Shu Waseda University 17 April 2017 International Political Economy 1

2 An outline of the lecture The basics of Marxism Marxist IPE theories Constructivism at a glance Constructivist IPE theories Feminist approaches to IPE 17 April 2017 International Political Economy 2

3 The basics of Marxism Class struggles The relationship to the means of production defines one s (initial) membership of a class Ruling class vs. working class (e.g., bourgeoisie vs. proletariat) Historical materialism Economic structure, legal and political superstructure, and social consciousness Primitive communism ancient (slave) society feudalism capitalism ( socialism communism) Cultural hegemony Marxist interpretations of capitalism The exploitation of labor Chronical economic crisis Capitalist world system 17 April 2017 International Political Economy 3

4 Marxist IPE theories: Imperialism The imperialism analysis of IPE Domestic conflicts between the working class and the capitalist class Overseas colonial expansion Imperialist wars over colonial territories Imperialist wars and the two world wars Small-scale regional conflicts The first world war The second world war Socialist revolution Economic production and socialist revolution Class struggles and socialist revolution 17 April 2017 International Political Economy 4

5 Marxist IPE theories: Dependency theory Time and cases Between 1960s and 1970s Failed independent economic development in Latin America Dependency theory The centre and the periphery in world economy International economic order under attack International division of labor Poor states: natural resources, cheap labor, old technologies Rich states: advanced technologies, highly value-added products, dominating the international politico-economic order Reproduction of dependency trade, finance, politics, technology, media, education, and culture 17 April 2017 International Political Economy 5

6 Marxist IPE theories: World System Wallerstein and his works Immanuel Wallerstein (1930-) The Modern World System (4 Vols: 1974, 1980, 1989, 2011) The theories of World System Rejecting the third-world argument, and claiming instead a complex network of economic exchange relationships The structure of capitalist world economy Core: the centre of business, industries and finance Semi-periphery: providing the semi-finished products Periphery: supplying raw materials, agricultural products and cheap labour Possible transition from the semi-periphery to the core 17 April 2017 International Political Economy 6

7 Three theoretical frameworks compared The interaction between politics and economy Liberalist: politics and economy as two interacting spheres Marxist: economy determines politics Realist: politics determines economy Analytical focuses and explanatory variables Liberalism: individual actors economic efficiency Realism: state actors geo-strategic considerations Marxism: unequal relationships class conflicts The overlapping of alternative theories The role of national interests: Realism, Marxism The emergence of IOs: Liberalism, Realism Explaining inter-state conflicts: Marxism, Realism 17 April 2017 International Political Economy 7

8 Constructivism at a glance Some basic assumptions of constructivism Constructivism or social constructivism The national/state interests are relative Anarchy is what states make of it (Wendt, 1992) The logic of appropriateness (March and Olsen, 1989) The social construction of IPE Ideas Identities Values Norms Knowledge 17 April 2017 International Political Economy 8

9 Constructivist IPE theories: Epistemic Community What is an epistemic community? The network of knowledge-based professionals in scientific and technological areas that have an impact on policy-making The features of epistemic community Experts who share the common knowledge and beliefs The coordination between policy-makers and policy experts A global network beyond state borders The influences of epistemic community Environmental protection Financial regulation Trade in service 17 April 2017 International Political Economy 9

10 Constructivist IPE theories: Norms and their impacts What are the norms in IPE? Norms: standards of behavior that are typical of, or accepted within, a particular group or society Norms in IPE: sets of accepted rules of appropriate practices in international political economy Examples: anti-dumping, anti-child labor, trade barriers based on health concerns Norm entrepreneurs Actors that are able to prioritize certain norms (at the expense of others) in international politico-economic interaction Politicians, diplomats and experts State or a group of states (G7, G20, etc.) International organizations Network of international NGOs 17 April 2017 International Political Economy 10

11 Constructivist IPE theories: Norms and their impacts Creation and acceptance of international norms The basis of norm internationalization The internationalization of domestic politico-economic problems The contagious nature of financial, environmental and healthy issues The acceptance and internalization of norms The 'boomerang effect : five stages Negligence Resistance Strategic concession The roles of domesticized rules Domestic rules as given Norm diffusion 17 April 2017 International Political Economy 11

12 Constructivist IPE theories: Identity Identity in international political economy How does one identify herself, her job, her daily life, her country and her region? How does one identify other people, their jobs, their lives, their religions, their countries and their regions? The multi-layered structure of identity Overlapping identities Possible conflicts between multiple identities The dominant identity and its impact The formation and transformation of identity Identity formation education, socialisation, emulation Identity transformation International political or economic crisis: incentives for change External pressures: reward, coercion, persuasion 17 April 2017 International Political Economy 12

13 Constructivist IPE theories: Identity Self-identification Race, nation, culture, and ethnicity Self-identification and interest calculation in IPE Self-identification and policy formation in IPE Spatial Identities in IPE Small vs. big Local vs. global Domestic vs. international Everyday life, and identity consolidation and transformation in IPE: a grassroots perspective 17 April 2017 International Political Economy 13

14 Feminist approaches to IPE What is feminism? Three waves of feminist thoughts Pursuing gender equality (in public life) Opposing gender discrimination (in personal domain) Opposing essentialist definitions of femininity (in cross-cultural context) The roles of female in international political economy Reforming the masculinized international relations The masculinity of IPE: power, interest, conflict The femininity of IPE: coordination, compromise, consensus 17 April 2017 International Political Economy 14

15 Analytical Approaches: Global Governance and Domestic Politics Min Shu Waseda University 17 May 2017 International Political Economy 1

16 An outline of the lecture Group Presentation in Thematic Classes The Theory and Reality of IPE Global governance International politics International economy International institutions International norms Domestic political economy The formation of domestic preferences The roles of domestic institutions 17 May 2017 International Political Economy 2

17 Group Presentation in Thematic Classes Contents of the group presentation Relevant chapter in the Global Political Economy Pre-assigned current issues Current issues for the first two presentation groups International Trade: Trade Liberalization in East Asia: TPP: RCEP or FTAAP? International Finance: Internationalization of JPY and RMB Group members Radom selection based on the roll book 17 May 2017 International Political Economy 3

18 The theory and reality of IPE Four major IPE theories Realism: state/national interests Liberalism: state interdependence Marxism: inequality between developed and developing countries Constructivism: ideas (knowledge), values, norms and identities The reality of international political economy Different aspects of the same phenomenon Different stages of the same process The possibility of multiple theoretical explanations It does not matter who holds which opinion, but it does matter which opinion is worth holding. 17 May 2017 International Political Economy 4

19 Structure and agency in IPE The relationship between structure and agency The structure constrains the behaviour of agency Active agency reshapes, and even creates, the structure The structure of international political economy Anarchy or hierarchy; unipolarity, bipolarity or multipolarity International/regional institutions The agency of international political economy State Multinational corporations International organizations (International) NGOs 17 May 2017 International Political Economy 5

20 The global and the domestic in IPE The global and the domestic The (nation) state: a middle ground between the two The global in international political economy International political structure International economic order International institutional settings International law/norms The domestic in international political economy Domestic politico-economic preferences/interests Conflict and coordination between local groups Domestic institutions Public opinion 17 May 2017 International Political Economy 6

21 Global governance International political economy and globalization International trade and international finance Closed domestic economy: unrealistic Global governance Global governance in trade, finance, health, etc. The roles of international norms (to be explained) Participating in global governance The actors of global governance International institutions (e.g., WTO, IMF, WHO) International NGOs (e.g., Greenpeace, Human Rights Watch) Economic and political powers 17 May 2017 International Political Economy 7

22 International politics The perspective of international politics War and peace, geopolitical context International economic order and its impacts The structure of international economic order Path-dependence and its implications The state as an actor in international economy The preferences of the state: survival and political power, economic growth and national wealth, and social stability The state as rational actor based on its capability The state and the international economic order Shaping and being shaped 17 May 2017 International Political Economy 8

23 International economy The perspective of international economy Technological development and economic potentials Global macro-economic factors The state constrained by globalization Transnational flow of capitals Cross-border dissemination of technologies Transportation and communication cost A new IPE actor: MNCs Intra-enterprise trade and capital flows The IPE of foreign/external pressures International trade negotiation and domestic deregulation East Asian financial crisis ( ) 17 May 2017 International Political Economy 9

24 International institutions Why international institutions? Global economic externalities (e.g., stable financial order) Achieving collaboration and coordination among states Avoiding free-riding; reducing uncertainty; promoting burdensharing Four types of goods in IPE Joint production Individual production Non-exclusive exclusive Public goods (national defence) Club goods (cinema, satellite TV) Common resources (fish stocks, pasture) Private goods (food, clothes) 17 May 2017 International Political Economy 10

25 International institutions The characteristics of international institutions Membership Scope and objectives Institutional rules Delegation of power Centralization of tasks Explaining the institutional design A functional perspective Potential participants in the institution Available information and knowledge Agenda-setting approach Other perspectives also possible E.g., (political) balance of power 17 May 2017 International Political Economy 11

26 International norms International economic norms Trade liberalization The Washington consensus International political norms International laws Human rights, religious freedom Regional (cultural) norms Sovereignty, non-interference A dynamic perspective on international norm diffusion Creation dissemination (active or passive) reforms and localization acceptance 17 May 2017 International Political Economy 12

27 The domestic dimension of IPE The importance of the domestic dimension Domestic actors and domestic structure Formation of domestic preferences/national interests The domestic influences on international negotiation Domestic politics Domestic political institutions Parliamentary, presidential, semi-presidential Domestic actors and their impacts Political parties, voters, interest groups Domestic economy Domestic economic structure import-oriented vs. export-oriented Domestic economic actors sectoral interests, trade unions, foreign investors, etc. 17 May 2017 International Political Economy 13

28 The formation of domestic preferences Domestic preferences and political structure The political context Democratic or authoritarian Pluralist political structure Multiple dimensions of domestic preferences Domestic preferences on international economy International trade International finance Immigration Global warming 17 May 2017 International Political Economy 14

29 The formation of domestic preferences: International trade Political economic theories on international trade The Stolper-Samuelson theorem Abundant factor owners vs. scarce factor owners Capital vs. labour: class struggles The specific factors model Export-oriented factor owners vs. import-competing factor owners Industry/sector-oriented interests The model of factor mobility (Hiscox, 2002) The mobility of production factors across industries and sectors Dynamic transformation of domestic trade politics New trade theories and their impacts Intra-industrial trade The economy of scale: increasing returns 17 May 2017 International Political Economy 15

30 The formation of domestic preferences: International finance The politics of exchange rate Fixed exchange rate vs floating exchange rate Fixed exchange rate favoured by those heavily involved in transborder transactions Floating (flexible) exchange rate favoured by those involved in import-competing industries and the non-trade service sectors Strong currency vs. weak currency Exporting and importing industries International investment Short-term capital flows and long-term foreign direct investment Vertical movement of capitals between developed and developing countries Horizontal movement of capitals among developed countries 17 May 2017 International Political Economy 16

31 The formation of domestic preferences: Immigration Domestic labour market and immigration Low-skilled immigration High-skilled immigration Immigration hurts domestic workers with similar skill levels and benefit other residents in the host country The problems of aging society and immigration The lack of active labour forces The lack of demand in domestic consumption The politics of immigration Identity and multiculturalism Immigration as a social and political issue 17 May 2017 International Political Economy 17

32 The roles of domestic institutions: Electoral system The extension of franchise (democratization) More voters involved in the IPE decision-making The actual policy impacts depend on the profiles of the electorate Proportional representation More emphasis on nationwide political economic concerns Often led to low levels of trade protection and other restrictions Pluralist electoral system with small districts More emphasis on local and sectoral interests Tend to produce more protectionist policies 17 May 2017 International Political Economy 18

33 The roles of domestic institutions: Policy-making process One-party or coalition government One-party government Tend to produce bold policy initiatives Coalition government Based on consensus and compromise Vote-trading in trade legislation Protectionist vote-trading in the US before the WWII E.g., The Smoot-Hawley Tariff Act of 1930 Delegating trade negotiation authority to the executive E.g., Trade Promotion Authority in the US Fast-track negotiating authority Allowing the US President to negotiate international trade deals that the Congress may only accept or reject as a whole 17 May 2017 International Political Economy 19

34 The roles of domestic institutions: Bureaucratic agencies The desirability of bureaucratic independence Politicians may give too much attention to their own constituencies Delegating IPE policy-making and regulation authorities to independent bureaucratic agencies e.g., anti-dumping investigation Possible bureaucratic capture Bureaucratic agencies are not immune to lobbying Ministerial interests, sectoral interests Overseas interests The accountability of bureaucratic agencies 17 May 2017 International Political Economy 20

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