Jeffrey W. Ladewig
International trade is a dynamic and powerful force that affects nearly every individual, business, and nation in the world. Its scope and scale have also made international trade an immense, intense, and perennial subject of interest and inquiry. Some of the foundational works on international trade can be traced back to Adam Smith and David Hume, whose theories sought to debunk the commonly held idea of international trade at the time: mercantilism, which viewed exports as beneficial because they generated an increase in foreign currency and a nation’s wealth, and imports as detrimental because they were thought to decrease a nation’s wealth. Today, the general idea of comparative advantage informs almost all neoclassical economists’ models of international trade. However, neoclassical economists tend to assume that the theoretical benefits of international trade are clear, and thus, often ignore or dismiss the negative impacts of international trade and the studies that challenge their theories. In fact, many countries have not seen the benefits predicted by neoclassical economic theories. This is particularly evident when comparing the effects of international trade across developed and developing countries. Furthermore, there is evidence that international trade has developed along patterns that are not predicted by the traditional theories of comparative advantage. Given these, the practice of trade and its international impact can be much murkier.
Russell Alan Williams
Compared to trade in goods, there hasn’t been much attention given to international exchange in services and efforts to promote liberalization of those exchanges. Despite considerable efforts to promote global and regional services liberalization since the 1980s, much of the study of “trade in services” remains somewhat underdeveloped. Governments maintain foreign direct investment (FDI) restrictions on the ownership and operation of financial services and media companies, and most countries continue to insist on strict limitations on the rights of workers to trade their services across borders. While the revolution in communications and transportation technology in recent decades has intensified interest in services, services are still highly regulated and the removal of traditional trade barriers is inadequate to promote liberalization. The initiatives undertaken to promote the removal of service trade barriers include the World Trade Organization’s (WTO) General Agreement on Trade In Services (GATS); the European Union’s (EU) Services Directive; and the ASEAN Framework Agreement on Services (AFAS) signed by member states of the Association of South Eastern Asian Nation members (ASEAN) in 1995. These initiatives have generated a range of academic controversies and investigation, which has explored three themes: explaining the process by which the issue of liberalization came to the forefront of the global trade agenda, deploying a range of theoretical perspectives; assessing the impact and effectiveness of services liberalization agreements; and explaining why it has proven more difficult to promote liberalization in the services sector.
Marc L. Busch and Edward D. Mansfield
A survey of the literature on trade has revealed that it is becoming more difficult for elected officials resist protectionist pressures by citing constraints imposed by global pacts and supply free trade. There are two main reasons why. First, the literature on the design and politics of international institutions increasingly emphasizes how they build in slack that can undermine government claims of being constrained. Second, as states accede to an ever-growing list of overlapping international institutions, there is often a choice among, or uncertainty over, which institution’s obligations apply. Where this situation creates more policy space for government officials, it also will make it more difficult for them to credibly tie their hands and supply free trade in the face of interest group pressures for protection. Currently, the literature is somewhat at a turning point. Questions about the design and politics of international institutions, and the growing thickness of the market for them, are very much in vogue. These questions have profound implications for the supply of free trade. The credibility of elected officials’ hands-tying strategies is likely undermined where institutions anticipate the political reactions of their members, or where members can shop for different rules on trade to accommodate domestic preferences. The irony is that the proliferation of international institutions may lead scholars of trade policy to renew their focus on domestic interest groups.
Kimberly A. Weir
Pedagogy is the discipline that deals with the theory and practice of teaching. Pedagogy informs teaching strategies, teacher actions, and teacher judgments and decisions by taking into consideration theories of learning, understandings of students and their needs, and the backgrounds and interests of individual students. The teaching of global political economy (GPE) offers an alternative, and a challenge, to conventional economics education. Its emphasis on the competing currents of economic thought and their association with rival political philosophies adds complexity to the subject. However, this engagement with controversial issues creates more intellectual excitement than a narrow, “technical” treatment of orthodox analysis. There is also more scope for students to link their own personal experiences with the broader concerns of political economy. By emphasizing a liberal educational philosophy, educators can attain a more grounded approach to study, relating to students’ own experiences and more explicitly acknowledging the role of personal and political values. Scholars argue that there are viable alternatives to the standard micro-macro-quantitative curriculum and to the conventional teaching of economics. A pedagogy emphasizing controversies, linking competing economic analyses and different political perspectives, is possible. Ultimately, the teaching of global political economy has some inherent advantages as a means of interesting and engaging students.
Christoph Scherrer and Joscha Wullweber
Postmodern and poststructural theories and approaches in the field of international political economy (IPE) constitute a tangled, partly contradictory—rather than coherent—set of theories or a closed school of thought. Poststructuralism is more about ontology—the way we understand and theorize the being/the world—whereas postmodernism is situated more on the ontic level. Poststructuralist approaches deliver a powerful and comprehensive critique of mainstream approaches to IPE by challenging their basic theoretical, methodological, and epistemological assumptions as well as their explicit and implicit essentialisms (like empiricism, economism, voluntarism, methodological nationalism, individualism, etc.). The notion of contingency is fundamental and constitutive for virtually all poststructural and postmodern approaches, but poststructural approaches insist that the form of an object is historically contingent and discursively constructed. Poststructuralists conceptualize the economy as a (discursively produced) form and not as objective reality and claim that the political, the economic, and the social cannot be separated unambiguously. One common ground shared by poststructuralists with structuralists is their insistence that agency is always imbued by its social environment. Poststructuralists are not opposed to empirical research, and even acknowledge the need to explain causality rather than to derive it from logic. Despite the challenge from poststructuralism, IPE has been particularly resistant to poststructural intervention, although it may not remain unaffected by poststructural critiques and impulses in the long run.
Debora Halbert and Ashley Lukens
Intellectual property rights (IPRs) encompass several different legal regimes—such as patents, copyrights, trademarks, and “sui generis” protections—developed to protect intangible assets associated with ideas, expressions, and inventions, which are included under the broad umbrella term of “intellectual property” (IP). However, the evolution of these legal regimes has always been fraught with tension. Those desiring access to knowledge without restrictive property barriers resisted the expansion of IPRs, which means that the history of IP is entangled in development efforts. As member countries of the United Nations sought to fully extend IP protection around the globe, the World Intellectual Property Organization (WIPO) was created, central to which was the debate over the scope of international IP and demands by the less developed countries for less restrictive IPRs. However, it is the Trade Related Aspects of Intellectual Property Agreement (TRIPS) that has become the most powerful arbiter of IP rights. Meanwhile, the main debates and the specific political battles surrounding IPRs include, but are not limited to, biotechnology, biopiracy, copyright piracy, file sharing, traditional knowledge, access to knowledge, and access to medicine. Ultimately, the literature on international IP has evolved considerably, becoming increasingly relevant to more than legal scholars and business professionals. Nevertheless, additional research is needed in theorizing about the core concepts of IP; the complex role between nationalism, the state, culture, and IPRs; and the search for alternatives to IP.
The Millennium Development Goals (MDGs), endorsed by 189 governments at the Millennium Summit, propose a concerted global effort to reduce the incidence of severe poverty and many of its most serious manifestations over a twenty-five-year period. The MDGs offer crucial insights into the politics of poverty and poverty reduction in international affairs. Their political dimensions can be analyzed in terms of agency, the nature and limits of accountability, the use and manipulation of quantitative goals for political ends, the dangerous illusion that MDG objectives can be accomplished in large part by mobilizing more development assistance, and the MDGs’ distinctly apolitical approach to the structural causes of poverty. The MDG initiative should be situated in three ongoing streams of debate and discussion: the debate over the relative priority of growth and of human development for poverty reduction; the tension between the assertion of rights and the enunciation of donor-driven goals as the political engine of poverty reduction; and the debate over the roles of markets and of state direction and regulation. While the MDGs concentrate on increasing aid flows to reduce the incidence of poverty and its manifestations, international trade and finance arrangements too often impede rapid progress. This is evident in water privatization, trade rules, and anti-retroviral medicines for HIV/AIDS patients. A way forward is to integrate the MDGs more deeply with human rights guarantees. Donors, for example, must take seriously the 2002 Draft Guidelines for the application of human rights to poverty reduction strategies.
Darel E. Paul
Liberal international political economy (IPE) is the offspring of a marriage between mainstream international economics with its focus on markets and mainstream international relations with its emphasis on the state. While clearly involving the traditional disciplines of economics and political science, liberal scholarship in IPE tends to be housed almost exclusively in the latter. Liberal IPE has always maintained a special relationship with its absentee father economics, looking to it particularly as a source of theoretical and especially methodological inspiration. In its earlier phase, the “American school” of IPE, also known by its practitioners as Open Economy Politics (OEP), was strongly oriented toward studying the societal determinants of state trade policy and indeed continues to expand upon this terrain. OEP has moved into many diverse areas since then. Having roots in both neoclassical economics and realist international relations theory, OEP has a strong tendency to limit its empirical interest to observable behavior, define interest in strictly material terms, and assume the psychology of decision-making to be rational and therefore unproblematic. Unsurprisingly, OEP has little room for ideas as interesting and important objects of study, and in turn some of the early pioneers of the liberal approach in IPE have lamented its becoming “too materialistic.”
Michael G. Hall
Political economy research in exchange rate policy generally focuses on three particular questions. First is the question of the exchange rate regime. The exchange rate regime is the rule a government uses to determine the value of an exchange rate. The issue here is what can determine the degree of government intervention in exchange rate policy. Second, political economy research investigates the choices concerning the value or level of the exchange rate. This raises the question of how and why policy affects the relative prices of foreign and domestic goods. Finally, political economy research also investigates the nature and causes of an international monetary regime—the international principles, norms, and rules concerning monetary relations that governments and market participants expect to see others practice. International monetary regimes can be global or regional in scope, and in practice contain four elements. First, states agree to rules concerning exchange rate regimes. Second, if those rules mandate a fixed exchange rate, states agree to fix to a common “anchor” currency. Third, the international regime emphasizes particular methods for adjusting balance of payments imbalances, described below. Fourth, states agree to common procedures for resolving interstate disputes over exchange rates, through either hegemonic leadership, negotiation, supranational organizations, or rules demanding automatic responses.
Angus Cameron and Ronen Palan
Like many other social scientific terms, the exact meaning of globalization has always been unclear. It does not have a single point of origin, but emerged in the mid to late 1980s in several disciplines. In the general sense, globalization is the increasing interaction of people through the growth of the international flow of money, ideas, and culture. It first manifested in media and cultural studies as early as the 1970s—the spread of TV, telephones, information and communication technology (ICT), and other media provided an enduring image of the technological “shrinking” of space, a defining trait of globalization. Advances in the means of transport (such as the steam locomotive, steamship, jet engine, and container ships) and in telecommunications infrastructure (including the rise of the telegraph and its modern offspring, the Internet and mobile phones) have been major factors in globalization, generating further interdependence of economic and cultural activities. In connection to the study of globalization, global political economy (GPE), or international political economy (IPE), is an academic discipline that analyzes economics and international relations. As an interdisciplinary field, it draws on a few distinct academic schools, most notably economics, political economy, political science, sociology, history, and cultural studies. Other topics that command substantial attention among IPE scholars are international trade, international finance, financial crises, macroeconomics, development economics, and the balance of power between and among states and institutions.