INTERNATIONAL POLITICAL ECONOMY Professor: FEDERICO STEINBERG WECHSLER E-Mail: fsteinberg@faculty.ie.edu E-mail: fsteinberg@rielcano.org Academic Background PhD in Economics, Universidad Autónoma de Madrid Master in International Affaires, Columbia University, New York Master in International Political Economy, London School of Economics Licenciado in Economics, Universidad Autónoma de Madrid Academic Experience Lecturer in International Economics at Universidad Autónoma de Madrid. Guest Lecturer in more than 20 universities and postgraduate centres Author of several books, book chapters and journal articles. Experience Senior Analyst for International Economics at the Royal Elcano Institute for International Affairs. World Bank Consultant United Nations Consultant Published by IE Publishing Department. Last revised, November 2016. 1
SUBJET DESCRIPTION AND OBJECTIVES By virtually any measure, we live today in the most economically interconnected era of world history. Products from previously isolated economies are now exported worldwide, a greater number of firms must face greater levels of international competition, and capital freely flows in massive quantities across borders. Is this globalizing trend reversible? Who are the winners? And the losers? What are its implications for international politics, and for domestic political systems? To answer these questions, we must first know how we got here. To understand the economic and political underpinnings of the international economic order is precisely the purpose of the field of International Political Economy (IPE). Using analytical and methodological insights from political science and economics, contemporary research on IPE has shed light on a wide variety of questions: why are some governments more eager to embrace protectionism, whereas others promote free-trade? What explains the different regulation of the flow of goods, services and factors of production across countries? What effects do domestic and international political institutions exert on the foreign economic policies of governments? How do domestic politics affect the conduct of a country s international monetary and financial relations with the rest of the world? How can (and should) globalization be managed? This course offers an advanced introduction to the main contributions of the field of IPE. It analyses global economic trends, with a special focus on the globalization process (with its risks, opportunities and limits), the evolution of the international trading, financial and monetary systems, the main challenges developing countries face to take advantage of globalization and the geopolitics of energy and climate change. Objectives: Students are expected, by the end of the course, to i) know the main contributions to our understanding of international economic relations and its domestic consequences, ii) critically engage with the contemporary literature on IPE, and iii) be able to use the main perspectives used in the field to explain facets of the international economic relations. Most session will have the following structure: 1) The professor will introduce the topic in 30 minutes 2) Two/three students will make short presentations (5-8 minutes) responding to the questions specified for each sessions 3) There will be a general discussion and concluding remarks by the professor in 25-30 minutes Some sessions will take the form of a general debate based on readings. Two sessions will take the form of lectures by the professor to introduce the main theoretical concepts in international trade and international finance. There is no single textbook, but many of the readings will come from the book Global Political Economy (fourth edition, 2011), edited by John Ravenhill, Oxford University Press. Refered to as GPE. PROGRAM SESSION 1 (FACE TO FACE) SESSION 1 Part one (20 minutes): Introduction. Course rationale, main topics, distribution of seminar questions between the students. Rules of the game for the class debates. Guidelines for the final paper. Part two (one hour): The global financial crisis, the Great Recession and the future of the global economy (presentation by Professor Steinberg and open debate) No 2
SESSION 2 (FACE TO FACE) SESSION 2 What is international political economy? Is it different from international relations, international economics or comparative politics? GPE, Ch. 1 Eichangreen, Barry (1998): Dental Hygiene and Nuclear War: How International Relations Look from Economics International Organization, Vol 52. http://eml.berkeley.edu/~eichengr/research/keohane.pdf T.N.: Eichangreen, Barry (1998): Dental Hygiene and Nuclear War: How International Relations Look from Economics International Organization, Vol 52. SESSION 3 SESSION 3 Globalization and its discontents GPE, Ch 9 O Rourke Kevin (2015): The Davos Lie, Critical Quarterly http://onlinelibrary.wiley.com/doi/10.1111/criq.12239/epdf Sandbu, Martin (2016): The shock of free trade, Prospect Magazine http://www.prospectmagazine.co.uk/features/the-shock-of-free-trade What explains globalization? Has globalization gone too far? Is globalization a good thing? Is there a backlash against globalization? If so, why? T.N.: O Rourke Kevin (2015): The Davos Lie, Critical Quarterly T.N.: Sandbu, Martin 3
SESSION 4 (FACE TO FACE) SESSION 4 Key trends in the global economy. The rise of emerging markets and the relative decline of the West, new patterns of trade, investment and consumption, the technological revolution, urbanization. How to govern globalization European Parlament (2015), The Group of Twenty (G20), Setting the global agenda http://www.europarl.europa.eu/regdata/etudes/brie/2015/545712/eprs_bri(2015)545712_rev1_ EN.pdf Domenico Lombardi and Kelsey Shantz (2015): THE 2015 SURVEY OF PROGRESS IN INTERNATIONAL ECONOMIC GOVERNANCE, CIGI Policy Brief 69 https://www.cigionline.org/publications/2015-survey-of-progress-international-economic-governance Subacchi, P. and S. Pickford (2015): International Economic Governance: Last Chance for the G20? Chatham House Policy Brief https://www.chathamhouse.org/sites/files/chathamhouse/publications/research/20151113 InternationalEconomicGovernanceG20SubacchiPickford.pdf Who is in charge of the global economy? Will conflict and tensions increase in the future at the international level? Is the decline of the West inevitable? T.N.: European Parlament (2015), The Group of Twenty (G20), Setting the global agenda T.N.: Domenico Lombardi and Kelsey Shantz (2015): THE 2015 SURVEY OF PROGRESS IN INTERNATIONAL ECONOMIC GOVERNANCE, CIGI Policy Brief 69 T.N.: Subacchi, P. and S. Pickford (2015): International Economic Governance: Last Chance for the G20? Chatham House Policy Brief SESSION 5 SESSIONS 5, 6 and 7: International Finance (theory and practice) SESSION 5 The basics of international finance (Lecture by Professor Steinberg) No readings SESSION 6 (FACE TO FACE) SESSION 6 The evolution and the political economy of the international monetary and financial system. Financial Crisis. GPE, Ch. 7 What are the main turning points in the evolution of the international monetary system after the second world war? Why did Bretton Woods system collapse? Is the expansion of international capital markets a good think? 4
SESSION 7 (FACE TO FACE) SESSION 7 Key debates regarding the future of the International Monetary System, the role of the IMF and currency rivalry. GPE, Ch. 8 Cohen, B (2013): The Coming Global Monetary (Dis)Order," in David Held and Charles Roger (eds.), Global Governance at Risk (Polity Press, 2013). http://www.polsci.ucsb.edu/faculty/cohen/recent/pdfs/milband%20lecture.pdf Why do financial crisis happen? How can we prevent them? Do we have a governance problem in the international monetary system? Why or why not? Can the euro rival the dollar? T.N.: Cohen, B (2013): The Coming Global Monetary (Dis)Order, SESSION 8 (FACE TO FACE) SESSION 8 The euro crisis Pickford, S, Federico Steinberg and Miguel Otero-Iglesias (2014): How to fix the euro. Chatham House, Real Instituto Elcano and AREL. https://www.chathamhouse.org/publications/papers/view/198575 Steinberg_OteroIglesias_How_to_fix_the_euro.pdf? MOD=AJPERES&CACHEID=48950100436dd836af88bf314d72f5eb Hall, Peter (2016): The Euro Crisis and the Future of European Integration https://www.bbvaopenmind.com/en/article/the-euro-crisis-and-the-future-of-european-integration/ What caused the euro crisis? Who is to blame? What needs to be done? Will the euro survive? T.N.: Pickford, S, Federico Steinberg and Miguel Otero-Iglesias (2014): How to fix the euro. Chatham House, Real Instituto Elcano and AREL. T.N.: Hall, Peter (2016): The Euro Crisis and the Future of European Integration SESSION 9 (FACE TO FACE) SESSIONS 9, 10 AND 11: International trade (Theory and policy) SESSION 9 International trade theory and political economy of international trade (Lecture by professor Steinberg) No readings SESSION 10 (FACE TO FACE) SESSION 10 GPE, Ch 5. Why did the GATT work so well and the WTO has not been able to reach agreements? Who runs the WTO? Does the WTO have a future? Has the WTO benefited developing countries? 5
SESSION 11 (FACE TO FACE) SESSION 11 New trade regionalism GPE, Ch. 6. Lamy, Pascal (2015) The new world Trade http://www.ecipe.org/app/uploads/2015/05/jan-tumlir-police-essays-%e2%80%94-20151.pdf Steinberg, Federico (2014) US-EU trade negotiations: what is at stake? Royal Elcano Institute. ARI 13/2014-6/3/2014 http://www.realinstitutoelcano.org/wps/portal/web/rielcano_en/contenido? WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari13-2014-steinberg-us-eu-tradenegotiations#.U3E4AK1_uCM Are regionalism and multilateralism incompatible? How are the new trade agreements different from the old ones? Why are the US and the EU negotiating preferential trade agreements now? Are you for or against TTIP? Why? T.N.: Lamy, Pascal (2015) The new world Trade T.N.: Steinberg, Federico (2014) US-EU trade negotiations: what is at stake? SESSION 12 (FACE TO FACE) SESSION 12 Economics and geopolitics of energy and climate change. Energy security, main sources of demand and supply for the next decades, challenges regarding investment and distribution and geopolitical conflicts between consumers and producers (new energy nationalism). The challenge of climate change and how to manage it. GPE, Ch 14 Lázaro Touza, Lara (2015): COP21 and the Paris Agreement: a diplomacy masterclass in search of greater climate ambition. Elcano Royal Institute. http://www.realinstitutoelcano.org/wps/portal/web/rielcano_en/contenido? WCM_GLOBAL_CONTEXT=/elcano/elcano_es/programas/energiacambioclimatico/publicaciones/ari2-2016- lazarotouza-cop21-paris-agreement-diplomacy-masterclass-search-greater-climate-ambition Isbell, P. (2008): The Riddle of Energy Security Estudios de Politica Exterior http://www.politicaexterior.com/wp-content/uploads/pdf/13isbell1.pdf IEA (2015): Energy and Climate Change. Chpter 1. https://www.iea.org/publications/freepublications/publication/weo2015specialreportonenergyandclimatechange.pdf Why has energy security become so important in the last years? Why is it so difficult to reach a global agreement to contain climate change? What will be the energy of the future? T.N.: Lázaro Touza, Lara (2015): COP21 and the Paris Agreement: a diplomacy masterclass in search of greater climate ambition. Elcano Royal Institute T.N.: Isbell, P. (2008): The Riddle of Energy Security Estudios de Politica Exterior T.N.: IEA (2015): Energy and Climate Change. Chpter 1. 6
SESSION 13 (FACE TO FACE) SESSION 13 Economic development. Main theories and debates on the political economy of development. Main drivers/impediments to economic development. GPE, Ch. 13. Acemouglu, Daron (2003): Root causes: A historical approach to assessing the role of institutions in economic development. Finance & Development http://www.imf.org/external/pubs/ft/fandd/2003/06/pdf/acemoglu.pdf Rodrik (2013): The Past, Present, and Future of Economic Growth http://drodrik.scholar.harvard.edu/files/dani-rodrik/files/gcf_rodrik-working-paper-1_-6-24-13.pdf Why are some countries poor and others rich? How and why has the thinking about economic development evolved in the academic and policy world? T.N.: Acemouglu, Daron (2003): Root causes: A historical approach to assessing the role of institutions in economic development. T.N.: Rodrik (2013): The Past, Present, and Future of Economic Growth SESSION 14 (FACE TO FACE) SESSION 14 Poverty and inequality. Why has poverty fallen in the last decades? Why has inequality increased? What role has globalization played in the evolution of poverty and inequality? Reading GPE, Ch. 13 Milanovick, Branco (2013): Global Income Inequality in Numbers: in History and Now, Global Policy https://www.gc.cuny.edu/cuny_gc/media/cuny-graduate- Center/PDF/Centers/LIS/Milanovic/papers/2013/gpol12032.pdf T.N.: Milanovick, Branco SESSION 15 (FACE TO FACE) SESSION 15 Final debate: Where is globalization going? Is global governance feasible? Is it desirable? Reading Rodrik, D. (2007) How to save globalization from its cheerleaders The Journal of International Trade and Diplomacy 1 http://dev.wcfia.harvard.edu/sites/default/files/rodrick_howtosave.pdf T.N.: Rodrik, D. (2007) How to save globalization from its cheerleaders EVALUATION CRITERIA EVALUATION CRITERIA Attendance and participation in discussions is compulsory 50% short policy-oriented paper (around 3,000 words longs) 35% presentations in class 15% individual participation in general discussion Final policy-oriented paper questions: 7
For the final short policy-oriented papers, students may answer any of the seminar questions listed above or could also propose an additional question or topic (see below 5 different suggestions), but it will have to be approved by the professor. 1. Do we need more or less economic globalization? 2. Is economic growth incompatible with environmental sustainability? 3. What is the impact of the rise of emerging powers in global economic governance? 4. Why is protectionism on the rise in advanced countries? BIBLIOGRAPHY https://ie.on.worldcat.org/coursereserves/course/id/10003089 https://ie.on.worldcat.org/coursereserves/course/id/10003089 8