GLOBAL POLITICAL ECONOMY Govt 488, Fall 2001

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1 GLOBAL POLITICAL ECONOMY Govt 488, Fall 2001 Dr. George Shambaugh Class Hours: T, Th 11:40-12:55 Office: 656 ICC ICC 108 Office Hours: T, Th 2:40-3:30 TA: Josh Busby Phone: TA Discussion Session: TBA Web: The purpose of this course is to familiarize students with current issues and debates in the field of international political economy. Topics include: the relationship between power and wealth; the politics of international trade, aid, investment, and the international monetary system; the tension between international, regional, and domestic political and economic goals and concerns; the trade-offs of sustainable development; and the relationship between IPE and international security. Emphasis will be given to the application of the theories and concepts of international political economy to current issues and problems in the world today. REQUIREMENTS This course will meet twice a week. Undergraduates will be required to write one 5 page paper (20%), and complete a midterm (30%), and final exam (45%). Graduate students will be required to write two 5 page papers (30% each), one of which will require statistical analysis, and one 8-10 page paper (35%). Participation in classroom discussion is strongly encouraged and will be an important determinant of the final grade (5%). All graduate students will be expected to meet for one instructional session outside of the regular class meetings. Graduate students who do not have a working knowledge of SPSS are encouraged to attend a free instructional session offered by UIS before the graduate instructional session meets. All late assignments will be penalized one half a letter grade per day after the due date. Reading material has been assigned for each class meeting. Readings with an * are required for graduate students and recommended for undergraduates, though they will not be covered on the mid-term or final exams. All readings are available at the reserve desk in the library. The major books may be purchased at the Georgetown University bookstore or on-line. Students are encouraged to read the Washington Post, the New York Times and the Economist or other news sources and should feel free to raise questions relating the topics of this course to current events or concerns. This syllabus is subject to change at the discretion of the professor. 1

2 Books for Purchase: David Balaam and Michael Veseth, Introduction to International Political Economy (Upper Saddle River, NJ: Prentice Hall, 2001). Samuel Barkin and George Shambaugh, Anarchy and the Environment (New York: SUNY Press, 1999). Political Economy (Oxford: Oxford University Press, 1997). Jeffry Frieden and David Lake, editors. International Political Economy, fourth edition. (New York: St. Martin's Press, 2000). Optional: Rodrik Dani, Has Globalization Gone Too Far (Washington, D.C.: Institute for International Economics, March 1997). Course Outline: I. Theories of International Political Economy II. International Trade III. Economic Development IV. The International Monetary System V. Global Issues: IPE and the Environment, IPE and Security CLASS SCHEDULE & READINGS August 30: Pick up Syllabus and complete readings for first class. While reading, ask yourself: What is international political economy? Why does it matter? What makes it interesting? I. Theories of International Political Economy A. Paradigms and Methods (September 4) David Balaam and Michael Veseth, Introduction to International Political Economy (Upper Saddle River, NJ: Prentice Hall, 2001), ch. 1. 2

3 Political Economy (Oxford: Oxford University Press, 1997), introduction. Jeffry Frieden and David Lake, editors. International Political Economy, fourth edition. (New York: St. Martin's Press, 2000), introduction. B. Liberalism 1. What is economic liberalism? What are the benefits of "free trade or openness?" What are the costs? (September 6) Balaam and Veseth, Introduction to International Political Economy, ch 3. Political Economy, ch. 2. Jeffry Frieden and David Lake, editors. International Political Economy, ch Interdependence, Corporate Interests and National Decisions (September 11) Balaam and Veseth, Introduction to International Political Economy, ch 10. Jeffry Frieden and David Lake, editors. International Political Economy, ch. 4. Political Economy, ch. 4. C. Realism/Mercantilism/Economic Nationalism 1. If freer trade would help every one, why don't actors cooperate and promote it more than they do? What is the relationship between political power and political economy? (September 13) Balaam and Veseth, Introduction to International Political Economy, chs. 2, 9. Jeffry Frieden and David Lake, editors. International Political Economy, ch. 1. Political Economy, ch. 1. Joseph Stiglitz, Some Lessons from the East Asian Miracle, The World Bank 3

4 Observer 11, 2 (August 1996), pp * Michael E. Porter, The Competitive Advantage of Nations (New York: The Free Press, 1990), chapters 1-3, State Intervention and Protectionism (September 18) Balaam and Veseth, Introduction to International Political Economy, ch 13. Political Economy, ch. 6. Jeffry Frieden and David Lake, editors. International Political Economy, ch. 2, 6, 12. Dani Rodrik, Has Globalization Gone Too Far? (Washington, DC: Institute for International Economics, March 1997), chs 1-3. D. Distributional Concerns: Marxism v. the Winner-Take-All Society (September 20) Balaam and Veseth, Introduction to International Political Economy, ch. 4. Political Economy, ch. 3. Robert Frank and Philip Cook, The Winner-Take-All Society, chapters 1 and 2. Dani Rodrik, Has Globalization Gone Too Far?, chs. 4, 5. * Neil J. Smelser and R. Swedberg, "The Sociological Perspective on the Economy," in Smelser and Swedberg, eds. The Handbook of Economic Sociology, pp E. Rational Choice (September 25) 1. Basic Assumptions, Models and Hypotheses about Cooperation Balaam and Veseth, Introduction to International Political Economy, ch. 5. 4

5 Political Economy, ch. 7. Kenneth Oye, editor, Cooperation Under Anarchy, pp. 1-57, Basic Game Theory Applications (September 27) Kenneth Oye, editor, Cooperation Under Anarchy, pp Howard P. Lehman and Jennifer L. McCoy, "The Dynamics of the Two-Level Bargaining Game: The 1988 Brazilian Debt Negotiations," World Politics Vol. 44, No. 4 (July 1992). * Amartya Sen, "Rational Fools: a Critique of the Behavior Foundations of Economic Theory," Philosophy and Public Affairs (1977), pp F. Paradigms and Methods Applied (October 2) Who wins? Who loses? ** Undergraduate and first Graduate paper due in class, October 2 ** 5 pages maximum, double spaced, with reasonable fonts and margins Everyone should be prepared to discuss his or her paper in class. Paper Topic 1 for undergraduate and graduate students: Increasingly well organized groups of protesters have challenged many of the major multilateral meetings of countries trying to coordinate and promote economic development through liberalization and globalization. Despite their enthusiasm, the protesters have been unable to communicate a coherent explanation of why liberalization and globalization should be challenged. In five pages or less, either develop an argument for or against economic liberalization and globalization, or development an argument that explains why the protests began when they did (i.e., at a time of relative global prosperity and broad agreement on the merits of economic and political liberalism) and are continuing today. To do so, use two competing paradigms (or methods) about the relationship between economics and politics that we have discussed in class. Be sure to generate competing hypotheses and make an argument that defends one against another. Remember: * A simple and well specified argument is preferable to one that is overly complex or loose. * A well developed argument is written in a persuasive manner with supporting evidence. Feel free to select one specific issue possible examples include the 5

6 expansion of NAFTA, U.S.-European trade disputes over steel or agricultural products, PRC entry into the WTO, IMF loans to countries in financial distress, and placing environmental or labor standards in trade accords to provide evidence for your argument and focus your analysis. * A well defended argument is one that anticipates and addresses the primary concerns of its most likely critic (i.e., the competing viewpoint or hypothesis). * Cite all sources. * You must write your own paper, but you are encouraged to discuss your ideas with each other, the TA and the professor. II. International Trade A. GATT/WTO and the post-world War II System (October 9) Balaam and Veseth, Introduction to International Political Economy, ch. 6. John G. Ruggie, International Regimes, Transactions, and Change: Embedded Liberalism and Post-War Economic Order, in Stephen Krasner, International Regimes (Ithaca: Cornell University Press, 1989), pp John Odell, "Understanding International Trade Policies: An Emerging Synthesis," World Politics, pp B. Is hegemony necessary for free trade? What role do international economic organizations play? (October 11) Jeffry Frieden and David Lake, editors. International Political Economy, ch. 3, 5, 8. Political Economy, ch. 8. "The Theory of Hegemonic Stability," in Robert Gilpin, The Political Economy of International Relations (Princeton: Princeton University Press, 1987), pp ** Graduate Student Computer Instruction Session will be on Friday, October 19 ** Time and location. Second Graduate Paper is due November 6. 6

7 C. How Do Domestic Actors Affect the International Trading System? (October 16) Jeffry Frieden and David Lake, editors. International Political Economy, chs * Robert Keohane and Helen Milner, Internationalization and Domestic Politics, pp. 3-75, , D. Regionalism (October 18) Balaam and Veseth, Introduction to International Political Economy, pp Richard Stubbs and Geoffrey Underhill, Political Economy and the Changing Global Order, pp , Mitchell Bernard and John Ravenhill, "Beyond Product Cycles and Flying Geese: Regionalism, Hierarchy, and the Industrialization of East Asia," World Politics 47 (January 1995). * Miles Kahler, International Institutions and the Political Economy of Integration, pp III. Economic Development A. Modernization Theory, Culture and Development (October 23) Mitchell Seligson and John Passé-Smith, editors. Development and Under Development: The Political Economy of Inequality, Part 1: Classic Theories and Conflicting Evidence (the pages vary depending on which edition you use, but either edition is fine). Balaam and Veseth, Introduction to International Political Economy, ch 15. Samuel Valenzuela and Arturo Valenzuela, "Modernization and Dependence: Alternate Perspectives in the Study of Latin American Underdevelopment," in Heraldo Munoz, editor. From Dependency to Development, pp * Adam Przeworski and Fernando Limongi, "Modernization Theories and Facts," World Politics 49 (January 1997), pp * Mitchell Seligson and John Passé-Smith, editors. Development and Under Development: The Political Economy of Inequality, Part 4: Modernization and Development. 7

8 B. Structural Causes of Underdevelopment I: Structuralists and Trade in Primary Commodities (October 25) Robinson, "Trade in Primary Commodities," to be distributed in class. Dani Rodrik, "King Kong Meets Godzilla: The World Bank and the East Asian Miracle," Overseas Development Council, Policy Essay 11. Balaam and Veseth, Introduction to International Political Economy, chs. 17, 18. Leopoldo Solis and Aurelio Montemayor, A Mexican view of the Choice between Outward and Inward Orientation, in John Lewis and Valeriana Kallab, Development Strategies Reconsidered (New Brunswick: Transaction Books, 1986), pp * John Lewis, Development Promotion: A Time for Regrouping, in John Lewis and Valeriana Kallab, Development Strategies Reconsidered (New Brunswick: Transaction Books, 1986), pp C. Structural Causes of Underdevelopment II: Dependency Theory (October 30) Samuel Valenzuela and Arturo Valenzuela, "Modernization and Dependence: Alternate Perspectives in the Study of Latin American Underdevelopment," in Heraldo Munoz, editor. From Dependency to Development, pp Balaam and Veseth, Introduction to International Political Economy, ch. 16. Political Economy, ch. 5. Mitchell Seligson and John Passé-Smith, Development and Under Development: The Political Economy of Inequality, Part 5: Dependency and World System Theory. D. Review for Midterm (November 1) * * MIDTERM EXAMINATION for Undergraduates, in class, NOVEMBER 6 * * 8

9 IV. The International Monetary System A. Goals and History of the International Monetary System (November 8) Balaam and Veseth, Introduction to International Political Economy, ch 7. Jeffry Frieden and David Lake, editors. International Political Economy, chs. 13, 14, 15, 17. The Economist. A Survey of the IMF and World Bank: Sisters in the Woods, (October 12, 1991). * Graham Bird, "The IMF and Developing Countries," International Organization 50, 3 (Summer 1996), pp * Benjamin Cohen, "Phoenix Risen: The Resurrection of Global Finance," World Politics 48 (January 1996), pp B. Debt, Investment, and Development (November 13) Balaam and Veseth, Introduction to International Political Economy, pp. 8. Jeffry Frieden and David Lake, editors. International Political Economy, chs. 16, * Stephan Haggard, The Political Economy of the Asian Financial Crisis, chs. 1, 3, 6 (photocopy on reserve). C. Investment in Emerging Markets (November 15) Jeffry Frieden and David Lake, editors. International Political Economy, chs. 9, 10, 11. John Stopford and Susan Strange, Rival States, Rival Firms, (Cambridge: Cambridge University Press, 1991), chs. 4, 5, 7. Theodore Moran, "International Political Risk Assessment," in Theodore Moran, Multinational Corporations (Lexington Books, 1985), ch. 5. 9

10 V. Global Issues A. IPE and the Environment (November 20) Balaam and Veseth, Introduction to International Political Economy, ch 19. Magnus Wijkman, "Managing the Global Commons," in Robert Art and Robert Jervis, eds. International Politics, fourth edition, pp Barkin and Shambaugh, editors, Anarchy and the Environment, chs. 1, 2, 8. B. Market Failure and Solutions to Collective Action Problems (November 27) Charles Lipson, "Bankers Dilemmas," in Oye, ed. Cooperation Under Anarchy. Barkin and Shambaugh, editors, Anarchy and the Environment, chs. 3, 4, 5, 6. Crane and Amawi, The Theoretical Evolution of International Political Economy, ch. 9. D. Trade, Security and Economic Statecraft 1. What is the relationship between international trade and security? (November 29) Balaam and Veseth, Introduction to International Political Economy, pp Barkin and Shambaugh, editors, Anarchy and the Environment, ch. 7 Theodore Moran, Grand Strategy: the Pursuit of Power and the Pursuit of Plenty, International Organization 50, 1 (Winter 1996), pp Michael Klare, "Adding Fuel to the Fires: Conventional Arms Trade in the 1990s," in Michael Klare and Daniel Thomas, eds. World Security: Challenges for a New Century, 2nd edition, pp Economic Statecraft (December 4) Laura D'Andrea Tyson, Who's Bashing Whom?, chs. 1 and 7. George Shambaugh, States, Firms and Power, chs. 1 and 5. 10

11 * David Baldwin, Economic Statecraft, pp * Joanne Gowa, Allies, Adversaries and International Trade (Princeton: Princeton University Press, 1994), pp. 3-10, VI. Conclusion: Review, Reprise, Riposte: IPE and the 21st Century (December 6) Balaam and Veseth, Introduction to International Political Economy, ch. 20. * Final Graduate Paper Due December 7, at 5:00pm Undergraduate Final Exam: As Scheduled by the Registrar GOOD LUCK! Students are responsible for verifying the date and time of final exam. 11