RPOS 350 Topics in Comparative Public Policy Foreign Economic Policy: the Aid Donations, Trade Preferences, and Lending of Industrialized States Fall Semester 2008 Mondays, Wednesdays and Fridays, 8.15-9.10am in LC0005 Instructor: Holly Jarman Email: hjarman@albany.edu Office Hours: Contact Office, B16 Humanities, Mon & Wed 9.30-10.30 304 Milne Hall, Tue 4.30-5.30, please email for appointments at other times. Course Summary: This class deals with how developed countries behave towards developing countries. Why do industrialized countries feel the need to give grants, loans and special trade preferences to developing countries? What factors determine how these resources are distributed? The course tackles these questions by analyzing some broad themes: part one places the course in the context of a post-9/11 world, part two examines domestic pressure for change, and part three deals with multiple levels of policymaking. Finally, we look at two case studies: the role of foreign economic policy in preventing the spread of AIDS, and how the rapidly expanding Chinese economy is affecting industrialized states. By the end of the course, you should have an appreciation of the underlying structural and cultural differences between modern industrial countries and how these affect the allocation of aid, finance, and trade preferences. Class Schedule: Dates Theme Monday Wednesday Friday August 25-29 Introduction Introduction NO CLASS September 1-5 Foundations NO CLASS September 8-12 Aid September 15-19 Trade September 22-26 Finance Paper 1 September 29-October 3 Officials NO CLASS NO CLASS October 6-10 The Welfare State NO CLASS October 13-17 Parties & Elections October 20-24 Interest Groups October 27-31 Social Movements Paper 2 November 3-7 Multilevel Policymaking November 10-14 International Institutions November 17-21 Summitry and the G8 1
November 24-28 AIDS Paper 3 NO CLASS NO CLASS December 1-5 AIDS / China December 8-12 Conclusions & Exam Conclusions EXAM: 11 th December, 3.30pm-5.30pm What I Expect From You Please come to class prepared. Readings on this list are assigned for a specific date. There is no one set book to buy for this class, but all readings have been made available online via Blackboard. Please complete the readings and come to class ready to discuss, debate and disagree with the arguments they contain, with your fellow classmates, and me! We will try to follow current policy developments as much as possible in class, so it is highly recommended that you get into the habit of reading articles on foreign economic policy from quality news sources such as the Financial Times, the Economist, the Nation, the New York Times and the Washington Post, etc. This will help a great deal in getting to grips with the material we cover. There are no prerequisites for this course. The course is graded A-E. Formal requirements, in addition to full participation in class discussion on the basis of the assigned readings, are: Quizzes: 40% 3 Response Papers: 30% Final exam: 25% Up to 5 points will be awarded for participation in class. This is based upon the quality of contributions to class discussions and group tasks and NOT on attendance. Quizzes Random pop quizzes will be given throughout the semester. The questions are based on the readings for each class, requiring short factual answers. Quizzes can ONLY be taken in class! If you miss the class, you miss the quiz. Your top 4 results from these quizzes will count towards your final grade. 3 Response Papers Please keep these short, no more than 3 pages each, double spaced. The papers should respond to one or more readings from one week of the course, e.g. Aid or Interest Groups, articulating your opinions of the issues they discuss. Papers which refer to good books, articles, news sources or statistical data from outside the reading list in addition to the material we cover in class are likely to gain higher marks. Please write one paper for each section of the course. Papers are due at the beginning of class as follows: First paper deadline: September 26th Second paper deadline: October 31st Third paper deadline: November 24th Exam There will be a final exam on Thursday 11 th December between 3.30pm and 5.30pm in our usual room. You will be required to answer two essay questions from a choice of 8. The marking criteria for the exam and the other assignments will be discussed in class and made available for you on Blackboard. 2
The University takes a strong stance against cheating and plagiarism. Students found to have cheated on any assignment or to have plagiarized another s work will receive an E for the entire course. University policies regarding academic integrity may be found at http://www.albany.edu/undergraduate_bulletin/regulations.html. What You Can Expect From Me During my weekly office hours I will be available to discuss any queries. If you are having problems with the readings or with following discussions in class, please come and talk to me, sooner rather than later. Similarly, please come and see me at the start of the semester if you require special arrangements for the exam. Please note if you require special consideration for late papers, missed exams or classes you must first contact the undergraduate dean. I do not give special consideration for late papers or missing the exam without written instructions to do so from the dean. Papers which are late without permission will be graded E. General Resources Know Your Stuff! The Economist, Economics A-Z http://www.economist.com/research/economics/ The Financial Times it helps if you read this every day! www.ft.com Office of the United States Trade Representative (USTR) http://www.ustr.gov/ United States Agency for International Development (USAID) policy papers http://www.usaid.gov/policy/ World Trade Organisation, What is the WTO? online guide to how the WTO works http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm World Bank data and research collection http://econ.worldbank.org/wbsite/external/extdec/0,,menupk:476823~pagepk:64165 236~piPK:64165141~theSitePK:469372,00.html Dan Smith (2003) The State of the World Atlas, Earthscan: London. Scans on trade and development available on Blackboard. Dani Rodrik s (Professor of International Political Economy at Harvard) blog on development and globalization http://rodrik.typepad.com/ CATO Center for Trade Policy Studies free trade think tank http://www.freetrade.org/ 3
Center for Global Development development policy think tank http://www.cgdev.org/ IATP Trade Observatory articles on trade in agriculture http://www.tradeobservatory.org/ International Economic Law and Policy Blog top economists and lawyers talk trade http://worldtradelaw.typepad.com/ielpblog/ Peterson Institute for International Economics great news and research on finance and trade http://www.petersoninstitute.org/ OECD International Development Statistics Online http://www.oecd.org/dataoecd/50/17/5037721.htm 4
PART I: POLICIES 1. Foundations: The Changing Global Economy Monday 25 th August: Introductory Class. In addition to discussing how the course will run, we will talk about stories from last week s Financial Times, see www.ft.com. Wednesday 27 th August: Guest lecture. Albany s policy experts introduce you to trade and globalization, part 1. Friday 29 th August: NO CLASS Monday 1 st September: NO CLASS (Labor Day) Wednesday 3 rd September: Guest lecture. Albany s policy experts introduce you to trade and globalization, part 2. Friday 5 th September: Guest lecture. Albany s policy experts introduce you to trade and globalization, part 3. 2. Aid and altruism? Why haven t OECD countries delivered on their aid promises? What explains the pattern of aid donations by industrialized countries? Monday 8 th September: World Bank (1998) Assessing Aid: What Works, What Doesn t and Why, Oxford: Oxford University Press. Also, familiarize yourself with the OECD s Donor Aid Charts, highly recommended for assignments, available at http://www.oecd.org/countrylist/0,3349,en_2649_34447_1783495_1_1_1_1,00.html Wednesday 10 th September: Ngaire Woods (2005) The Shifting Politics of Foreign Aid, International Affairs, 81(2):393-409. Friday 12 th September: Alberto Alesina and David Dollar (2000) Who Gives Foreign Aid to Whom and Why? Journal of Economic Growth, 5(1). PJ Schraeder, SW Hook, B Taylor (1998) Clarifying the Foreign Aid Puzzle: A Comparison of American, Japanese, French, and Swedish Aid Flows, World Politics, 50(2). 3. Trade as Aid? The Doha Development Round Why did the Doha round become a development round? Why is the round failing? Monday 8 th September: Joseph Stiglitz and Andrew Charlton (2005) Fair Trade For All: How Trade Can Promote Development, Oxford: Oxford University Press, Chapter 3. Jeffrey Schott (2004) Reviving the Doha Round, Washington: Institute for International 5
Economics. Wednesday 10 th September: Jagdish Bhagwati (2006) Race to the Center and Other Lessons of Globalization, Brown Journal of World Affairs, pp271-276 Francisco Rodriguez, Dani Rodrik (2000) Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence, NBER Macroeconomics Annual, Vol. 15, pp. 261-325. Friday 12 th September: William Bernstein (2008) A Splendid Exchange: How Trade Shaped the World, Chapter 13: Collapse. Dani Rodrik (2008), Don t Cry for Doha, available at http://www.tradeobservatory.org/headlines.cfm?refid=103538. 4. International Finance and Public Debt Is debt a problem? If so, how should we solve it? If not, how should we sell it? Monday 22 nd September: William Easterly, How Did Heavily Indebted Poor Countries Become Heavily Indebted? Reviewing Two Decades of Debt Relief, World Development, Vol. 30, No. 10 (October 2002), pp. 1677-1696. Wednesday 24 th September: Howard Davies and David Green (2008) Global Financial Regulation: The Essential Guide. Listen to The Credit Squeeze Explained at http://media.ft.com/cms/c0b7a3f6-6dbf-11dc-b8ab-0000779fd2ac.swf Friday 26 th September: Tim Allen and Diana Weinhold, Dropping the Debt for the New Millennium: Is it Such a Good Idea? Journal of International Development, Vol. 12, No. 6 (2000), pp. 857-875. Ann Pettifor (2006) The Coming First World Debt Crisis, pp1-25 essential, & pages 26-55 highly recommended for assignments. ***NO CLASSES BETWEEN SEPTEMBER 29 th and OCTOBER 1 st *** PART II: DIFFERENCES 5. Officials and Experts What role do state officials and experts play in forming foreign economic policy? Friday October 3 rd : Y Dezalay, BG Garth (1996) Dealing in Virtue: International Commercial Arbitration and the Construction of a Transnational Legal Order, University of Chicago Press, Chapters 1 and 2. Louis Pauly (1997) Who Elected the Bankers?, Ithaca: Cornell University Press, Chapter 1. 6. Capitalism and the Welfare State 6
Does a state s attitude towards domestic welfare affect its foreign economic policy preferences? Monday October 6 th : Alberto Alesina and Edward Glaeser (2004) Fighting Poverty in the US and Europe chapter 1. Alain Noel, Jean-Philippe Therien (1995) From Domestic to International Justice: The Welfare State and Foreign Aid, International Organization, 49(3), 523-553. Wednesday October 8 th : Layna Mosley. "Room to Move: International Financial Markets and National Welfare States." International Organization 54, no. 4 (Autumn 2000): 737-774. 7. Political Parties: It s the (global) economy, stupid! Are trade and aid salient issues in elections? Why or why not? Is this changing? Monday 13 th October: I M Destler (2005) American Trade Politics, Chapter 11. Also, read up on trade and the 2008 election at http://www.cfr.org/publication/14762/ Wednesday 15 th October: Helen V. Milner and B. Peter Rosendorff, Democratic Politics and International Trade Negotiations: Elections and Divided Government as Constraints on Trade Liberalization, The Journal of Conflict Resolution, Vol. 41, No. 1, New Games: Modeling Domestic-International Linkages (Feb., 1997), pp. 117-146 Friday 17 th October: Tom Porteous (2005) British government policy in sub-saharan Africa under New Labour International Affairs, 81(2) 9. Interest Groups What are vested interests and why do they matter? To what extent can interest group lobbying explain foreign economic policy in industrialized countries? Monday 20 th October: Frieden, Jeffry. "Invested Interests: The Politics of National Economic Policies in a World of Global Finance." International Organization 45, no. 4 (1991): 425-51. Wednesday 22 nd October: I M Destler (2005) American Trade Politics, Chapter 2. Friday 24 th October: Alasdair Young and John Peterson, (2006) The EU and the new trade politics, Journal of European Public Policy, Volume 13, Number 6, September 2006, pp. 795-814(20) Also read about the EU s Civil Society Dialogue: http://trade.ec.europa.eu/civilsoc/csd_proc.cfm Week 9 Social Movements Why do social movements form to oppose globalization? Who do they represent? Monday October 27th: Donatella della Porta, Massimilano Andretta, Lorenzo Mosca and Herbert Reiter (2006) Globalization and Social Movements, pp1-26 in Globalization from Below: Transnational Activists and Protest Networks. 7
Wednesday October 29th: Susan Aaronson (2001) Taking Trade to the Streets: The Lost History of Public Efforts to Shape Globalization, Ann Arbor: University of Michigan Press, Chapter 1. Jennifer Hadden and Sidney Tarrow (2007) The Global Justice Movement in the United States Since Seattle, pp210-231 in Donatella Della Porta (ed.) The Global Justice Movement: Cross- National and Transnational Perspectives, Paradigm Publishers: London. Friday 31 st October: Marcos Ancelovici (2002) "Organizing Against Globalization: The Case of ATTAC in France", Politics and Society, 30(3):427-463. Jeffrey M Ayres (1996) Political Process and Popular Protest: The Mobilization Against Free Trade in Canada, American Journal of Economics and Sociology, 55(4):473-488. PART III: CROSSING BORDERS 10. Multilevel Policymaking How do interest groups and social movements in developing countries exert pressure on the governments of industrialized countries? Where does democratic accountability lie in an increasingly globalized, multilevel system of policymaking? Monday 3 rd November: Robert D. Putnam Diplomacy and Domestic Politics: The Logic of Two-Level Games, International Organization, Vol. 42, No. 3 (Summer, 1988), pp. 427-460. Wednesday 5 th November: Keck and Sikkink (1998) Activists Beyond Borders: Advocacy Networks in International Politics, Ithaca: Cornell University Press, Chapter 1. Friday 7 th November: Stephen Woolcock (2000) European Trade Policy: Global Pressures and Domestic Constraints, Chapter 14 in Helen Wallace and William Wallace, Policymaking in the European Union. 11. International Institutions: the World Bank, IMF and the WTO Are the international financial organizations fit for purpose? In playing a major role in these institutions, are developed countries fulfilling their responsibility towards developing countries or maintaining control of the global economy? Monday 10 th November: Please familiarize yourself with The WTO in Brief at http://www.wto.org/english/thewto_e/whatis_e/inbrief_e/inbr00_e.htm. John Barton, Judith Goldstein, Timothy Josling and Richard Steinberg (2006) The Evolution of the Trade Regime, Princeton: Princeton University Press, Chapter 6. Wednesday 12 th November: Rosemary Foot, Neil MacFarlane and Michael Mastanduno (2003) US Hegemony and International Organisations, Oxford: Oxford University Press, Chapter 5. Friday 14 th November: Ngaire Woods, Good Governance in International Organizations, Global Governance, Vol. 5, No. 1 (Jan-Mar 1999). 8
Rogoff, Kenneth. "The IMF strikes back." Foreign Policy (January/February 2003). 12. Summitry and the G8 Given the recent addition of the plus five (India, China, Brazil, South Africa, Mexico) and the Heiligendamm process partners, does the G8 still function? What are the alternatives? Monday 17 th November: Hodges, Michael, John Kirton and Joseph Daniels, eds. (1999), The G8 s Role in the New Millennium, Aldershot: Ashgate. Wednesday 19 th November: Nicholas Bayne and Stephen Woolcock (eds, 2003) The New Economic Diplomacy: Decisionmaking and Negotiation in International Economic Relations Ashgate: Burlington, VT, Chapter 7. Friday 19 th November: Bayne, Nicholas (2003) The New Partnership for Africa s Development and the G8 s Africa Action Plan: A Marshall Plan for Africa? in Fratianni, Savona and Kirton (2003), 117-130. 13. Case Study One: Aid for AIDS Should fighting AIDS be the primary objective of international development policy in industrialized countries? Monday 24 th November: World Bank, Confronting AIDS: Public Priorities in a Global Epidemic, Oxford University Press, New York, 1998. The Lancet (2008) Mr Bush Goes to Africa, February 28 th. Laurie Garrett (2007) The Challenge of Global Health, Foreign Affairs, January/February. Wednesday 26 th November: Pedro Roffe, Christoph Spennemann and Johanna von Braun From Paris to Doha: The WTO Doha Declaration on the TRIPS Agreement and Public Health pp9-26 in Pedro Roffe, Geoff Tansey and David Vivas-Eugui (2006) Negotiating Health: Intellectual Property and Access to Medicines 14. Case Study Two: Trading with China Why has the expansion of the Chinese economy caused policy problems in developed countries? How should these problems be addressed? Friday December 28 th : Gary Clyde Hufbauer, Yee Wong and Kekti Sheth (2006) US-China Trade Disputes: Rising Tide, Rising Stakes, Peterson Institute: Washington DC, Chapter 1. WTO Trade Policy Review: China, 2006, Report Summary available on Blackboard. Monday December 1 st : Paul Krugman (2007) Divided Over Trade, New York Times, May 14 th. 9
European Commission (2006) EU-China: Closer Partners, Growing Responsibilities, available at http://trade.ec.europa.eu/doclib/docs/2006/october/tradoc_130875.pdf. Also, take a look at www.made-in-china.com. Week 15 Conclusions What has foreign economic policy in industrialized countries achieved for developing countries since Bretton Woods? What has it achieved for industrialized countries? Monday 8 th December: Willy Brandt, (1980) A Plea for Change: Peace, Justice, Jobs, pp7-47 in The Brandt Commission North-South: A Programme for Survival Millennium Development Goals Report 2007, United Nations http://www.un.org/millenniumgoals/pdf/mdg2007.pdf 10