9781137523112 01 prexvi€¦ · Further Reading 124 7 Transnational Production 125 Definitions 127 Theoretical Perspectives: Explaining the Growth of TNCs 128 Major Developments 131

List of Boxes, Tables, Figures and Maps xPreface to the Fifth Edition xiiiList of Abbreviations xiv

Introduction 1

Part 1 Theoretical Perspectives 5

1 Theories of Global Political Economy 6Understanding the Global Political Economy 6The Economic Nationalist Perspective 8

Key actors 8Key dynamics 9Conflict and cooperation 10Economic nationalism today 10

The Liberal Perspective 12Key actors 13Key dynamics 13Conflict and cooperation 13Liberalism today 14

The Critical Perspective 16Key actors 17Key dynamics 17Conflict and cooperation 18Critical theory today 18

Contending Perspectives: A Summary 19Further Reading 21

2 International Political Economy and its Methods 22Locating the Field 22

Economics 23Political science 24Political economy 24International relations 25

Methodological Issues 26Case studies and large n studies 26Rational choice 27Institutionalism 28Constructivism 30

Contents

Trends in Contemporary GPE Theory 32Consolidation 32Integration 33Expansion 34

Approach of the Book 36Further Reading 38

Part 2 Evolution 39

3 Forging a World Economy: 1400–1800 40Regions of the World Economy 41

The Middle East 42China 43India 44Africa 45The Americas 45Europe 46

European Expansion 51Into the Americas 51Along Africa: the triangular trade 54On the peripheries of Asia 56

Conclusion 58Further Reading 62

4 Industry, Empire and War: 1800–1945 63The Industrial Revolution 64

What was the Industrial Revolution? 64Why Britain? Why then? 66What did the others do? 67

Pax Britannica 68The gold standard and capital flows 68Free trade 71Balance of power 71

Renewed Imperialism 74War and Economic Disorder 77

The world wars 77Interwar economic failure 79


Copyrighted material – 9781137523112


viii Contents

5 Growing a Global Economy: 1945–2015 86The Cold War Era: 1945–89 86

The US-led Western political economy 86The communist political economy 89The southern political economy 89

The Post-Cold War Era: 1990–2015 91Competing capitalisms and state transformation 91The information revolution 93International organizations and governance 95


Part 3 Dynamics 101

6 International Trade 102Definitions 102Theoretical Perspectives: Free Trade and Protectionism 103

Proponents of free trade 104Critics of free trade 105

Major Developments 108Growth and protectionism 108Changing institutional arrangements 112

Key Issues 115Developing country interests 115Regional trade agreements 120Legitimacy 122


7 Transnational Production 125Definitions 127Theoretical Perspectives: Explaining the Growth of TNCs 128Major Developments 131

The globalization of production 131Changing organizational principles 135

Key Issues 138Re-evaluating the benefits of FDI 138State–firm interactions 142Regulating capital 145


8 The Global Financial System 148Definitions and Background 148

Theoretical Perspectives: The Mundell- Fleming Model 151Major Developments 153

IMS: from fixed to floating and regional currencies 153Credit: financial innovation and repeated crises 157

Key Issues 166Global credit crisis 166Future of the US dollar 168The European sovereign debt and euro crisis 170Corporate and individual tax abuse 173


9 Global Division of Labour 179Definitions 179Theoretical Perspectives: Adam Smith and his Critics 181Major Developments 184

Changes in the production process 185From the new international to the global division of labour 186

Key Issues 187Global restructuring: the rise of China and India 188The struggle for workers’ rights in a global economy 191The division of labour and global stability 193


10 Gender 198Definitions and Background 198Theoretical Perspectives: GPE as if Gender Mattered 200Major Developments 203

Women in the world economy: employment trends and prospects 203Gender and global public policy 205

Key Issues 210The feminization of poverty 210Globalization of reproductive work 211Gender and global restructuring 214


11 Economic Development 217Definitions 218



Contents ix

Theoretical Perspectives on Growth and Development 222Major Developments 226

Development and national capitalism, 1947–81 227Development, neoliberalism and beyond, 1982–2015 229

Key Issues 232The organization of development 232Debt and debt relief 235North–South conflict 237


12 Global Environmental Change 241Definitions and Background 242Theoretical Perspectives: IPE and Environmental Studies 244

IPE debates 244Environmental studies’ debates 246

Major Developments 249Bringing the environment in 249Mainstreaming environmentalism 251

Key Issues 253Sustainable development 253Climate change 256Transnational land acquisitions 259


13 Ideas 262Definitions 262Theoretical Perspectives: Ideas about Ideas 263Major Developments 266

The information revolution and the information society 266The rise and stall of the Washington Consensus 268

Key Issues 271Technological diffusion 271Property rights and life (HIV/AIDS) 272

Ideas, interests and the global financial crisis 274


14 Security 279Definitions: Three Views of Security 279

The traditional state-centric approach 279New security studies 280Human security 281

Theoretical Perspectives: Integrating Security and Political Economy 282Major Developments 285

The Cold War security structure 285The post-Cold War security structure 286

Key Issues 290Economic statecraft and security 290Transnational crime and corporate espionage 293Disease, pandemics and security 296


15 Governing the Global Political Economy 299Definitions 299Theoretical Perspectives: Whither the State? 300Major Developments 301

Proliferation of governance levels 302Proliferation of actors 305Rise of the BRICS 307

Twenty-First-Century Challenges 310Development and growth 310Equality and justice 311Democracy and regulation 313


Bibliography 317Index 342



In its present form, the field of international political economy (IPE) or global political economy (GPE) is a relatively new undertaking at universities. This chapter introduces readers to three of its main theories. Chapter 2 gives read-

ers an overview of the relationship of IPE to other fields, considers some of the methods used to study IPE and examines the future directions of GPE theory.

Understanding the global Political economy

During 1996 and into 1997, a small number of investors and currency traders began to have doubts about whether Thailand’s economy would be able to con-tinue its record of remarkable growth. Fearing a reduction in economic prosperity and profit, some of these investors began to withdraw their money and invest-ments. The outflow of money forced the Thai central bank to devalue its currency, the baht. This began a process which was later called the 1997 ‘Asian financial crisis’. By the time the crisis had run its course, several Asian countries experi-enced economic depression, the government of Indonesia was overthrown, coun-tries previously labelled economic miracles, for example South Korea, were forced to seek loans from the International Monetary Fund (IMF) and the viability of the international financial system was called into question.

Although the 1997 Asian financial crisis was clearly a significant development in the global political economy, it was not immediately apparent what caused the events, what were its most significant aspects or what lessons might be drawn from the crisis to prevent a similar event from occurring. Indeed, a number of different stories are told about the crisis (see Table 1.1). One story, the liberal story, locates the causes of the crisis primarily in the financial policies followed by Asian states (McLeod and Garnaut, 1998). This view suggests that resources were directed to inefficient uses because of corrupt business practices and political influence over financial institutions. The term ‘crony capitalism’ was developed to capture this inappropriate model of political economy. The lesson to be drawn from the crisis is that financial markets will eventually punish economic activity which violates or ignores liberal economic principles. The solution is for develop-ing countries to have more transparent financial practices and follow a more lib-eral economic model.

A second story stresses the significance of state power in creating and exploit-ing the crisis (Weiss, 1999). In this view, the problem arose because developing countries liberalized their economies prematurely and allowed large amounts of money to flow into and out of their countries too quickly. This undermined the

Chapter

1 Theories of Global Political Economy

Understanding the Global Political Economy 6

The Economic Nationalist Perspective 8

The Liberal Perspective 12

The Critical Perspective 16

Contending Perspectives: A Summary 19

Further Reading 21



Chapter 1 Theories of Global PoliTiCal eConomy 7

East Asian model of political economy and caused a crisis. This approach would stress how the US used the Asian crisis as an opportunity to force some states to restructure along lines that benefited American busi-ness. During the crisis, Asian states attempted to coun-ter American initiatives at the IMF and to continue to resist the undermining of their particular form of capi-talism (Higgott, 1998). The lessons from the crisis are that states need to be careful about liberalizing their economic activity and must pay attention to guarding their national interest.

A third story (critical) focuses on the role of US pri-vate business interests and the US government in creat-ing the conditions for a financial collapse. It suggests that the US government pressured developing states into liberalizing their economies because this suited the interests of the US Treasury and leading financial firms on Wall Street (Wade and Veneroso, 1998). Once the crisis took place, the same interests pressed the IMF to demand that Asian economies restructure in a way that would open markets for US firms. This story also stresses the high degree of suffering caused by the financial collapse and the fact that its costs were une-venly distributed. For example, the collapse of the Indo-nesian economy pushed millions further into poverty, but left wealthy financial interests in developed coun-tries relatively untouched. In this view, the international financial system facilitates the rapid movement of money between countries and contributes to the reoc-currence of financial crisis in many parts of the world (Walton, 2002). Action needs to be taken to curb finan-cial speculation, such as a tax on large short-term for-eign exchange transactions. States should also consider restricting the ability of investors to move their funds abroad rapidly.

This brief example of the Asian financial crisis demonstrates that the same event can be analysed in several different ways. Indeed, most major

developments are interpreted through competing explanations. Facts do not exist independently of explanatory frameworks. Facts are pieces of informa-tion that are thought to correspond to reality and be true, but the way in which they are perceived and judged is influenced by theory. In order to make sense of the world and to enable us to take constructive action, humans develop theories to help determine which facts are most important and what significant relationships there are between different events. Theories are used for a variety of purposes:

◗ they can prioritize information and allow individu-als to turn their attention to the most important issues

◗ they can be used to make predictions about the future so that action can be taken to prepare for upcoming events

◗ they can be used to plan action or mobilize support for particular action

Every person utilizes theory to run their life even if they do not engage in explicit theorizing. Actors in the global political economy and those studying it use a variety of theories for a variety of purposes. Some peo-ple are interested in prediction. For example, they would like to be able to predict what type of monetary system would lead to stable economic growth, or to pre-dict the likelihood of war between democratic states. Others believe that prediction is nearly impossible because so many factors come together to influence events. These people are more likely to use theory in an attempt to understand the world rather than to predict what will happen next.

In this book, we use and describe a number of theo-ries to guide us in understanding the world. The development of IPE is often presented as a debate between three contending schools of thought,

Table 1.1 Interpretations of the Asian financial crisis

Liberal State power Critical

Causes Crony capitalism, lack of transparency

overrapid liberalization, reduced state capacity to regulate

Predatory liberalism, power of financial interests, systemic flaws

Key issue(s) Corruption, lack of liberal economic practices

Clash of anglo-american versus asian models

human suffering caused by financial collapse

lessons increase transparency and good practice in developing countries

limit financial speculation through state policies

reform international financial system, defend national system



8 Part 1 TheoreTiCal PersPeCTiVes

paradigms or approaches. Some commentators refer to contending paradigms, others to different schools of thought and yet others to competing approaches. It does not really matter for our purposes whether they are seen as theories, paradigms, schools of thought or approaches. The central point is that three main con-tending perspectives have been used to explain devel-opments in the global political economy. Although analysts distinguish between these three approaches, there is a wide variety of thought within each approach and much work in IPE draws on more than one of them. In addition, there are a number of other approaches, such as environmentalism, feminism and poststructuralism, which contribute to the study of IPE. These will be introduced later in the text. Let us begin by looking at the oldest approach – economic nationalism.

the economic nationalist PersPective

One school of thought brings together analysts who focus on the role of the state and the importance of power in shaping outcomes in the international politi-cal economy. These theories stress the importance of the interest of the nation or the state in understanding activity in international relations (IR). This grouping is variously termed ‘mercantilist’, ‘neomercantilist’, ‘statist’, ‘state-based theory’, ‘power politics’ or ‘economic nation-alist’. The equivalent in IR theory is realism. We use the term ‘economic nationalism’ to refer to this perspective because at the centre of such analyses is the protection of the national unit. The underlying economic argu-mentation may alter, for example, but the objective of economic intercourse remains the same.

The origin of this school of thought can be traced back to the emergence and expansion of the nation-state in Europe in the 15th century. Mercantilism was a doctrine of political economy that governed the actions of many states until the liberal revolution in Britain in the mid-19th century. Mercantilists believed that there was only a limited amount of wealth in the world and that each state must secure its interests by blocking the economic interests of other states. This is known as a ‘zero-sum game’. One state’s gain is another state’s loss. From the 15th until the 19th centuries, European states strove to establish overseas empires that would be as

self-sufficient as possible. Trade between neighbouring colonies of rival empires was discouraged.

Two famous advocates of mercantilist theory were Alexander Hamilton ([1791]1991) and Fredrick List ([1885]1991). Hamilton was a founding father of the United States. Writing in the 1790s, he urged Ameri-cans to protect their manufacturers from foreign com-petition so that they could industrialize and increase their power. Almost a hundred years later, List argued that Germany should industrialize behind trade barri-ers so that it could catch up with the economic might of Great Britain. He believed that only the economically strong advocated free-trade policies because other states would lose out in the ensuing competition. While Great Britain led the Industrial Revolution in the early 1800s and opened up its borders to free trade, both Germany and the US followed more economic nation-alist policies.

One central question for students of the contempo-rary global economy relates to the persistence of mer-cantilist thought. It could be assumed that an economic perspective based upon unrivalled state power is of limited relevance in a world characterized by globaliza-tion. While this may be correct, contemporary eco-nomic nationalist thought should not be dismissed as some atavistic throwback to an earlier era. It reflects, on the one hand, an acknowledgement that states remain at the centre of power within the global political econ-omy and, on the other, that there is an intimate connec-tion between power and wealth. Economic nationalist thinking, whether it is termed ‘neomercantilism’ or ‘stat-ism’, remains important in both analysis and practice in the contemporary global economy. For example, states may protect strategic industries against foreign rivals or attempt to export more than they import for long peri-ods of time. Japan has been accused of being a mercan-tilist state because in comparison with other advanced industrialized countries its economy is relatively closed. Even states that are generally seen to follow liberal poli-cies, such as the US, will pursue economic nationalist policies in particular sectors. For example, the US uses defence spending to support its commercial aerospace industry.

Key actorsEconomic nationalist or mercantilist theories view the state as the main actor in the global political economy.




A major assumption of economic nationalists is the pri-macy of the political over other aspects of social life. Statist writers focus on the group (the state or nation) rather than the individual. Economic nationalist thought begins from two major assumptions. The first is that the inter-state system is anarchical and it is there-fore the duty of each state to protect its own interests. At the core of the various historical versions of economic nationalism is the belief that an economic community persists and acts for the good of all its members. The second assumption concerns the primacy of the state in political life. As the state is the central instrument through which people can fulfil their goals, it follows that the state remains the preeminent actor in the domestic and international domains. Economic policy should be used to build a more powerful state.

From this perspective, the state is prior to the mar-ket and market relations are shaped by political power. Economic nationalist thought is both descriptive and predictive. Descriptive economic nationalists maintain that production, consumption, exchange and invest-ment are all governed by political power. Markets are not ‘natural’; they can only exist within a social context. For mercantilists, political needs and purposes are seen largely as being achieved through the form of the state. It remains at the core of social life. But economic nationalists move beyond description and also provide policy advice. Given their analysis of the dynamics of political economy, such advice is geared towards sup-porting and maintaining state power.

Economic nationalists recognize the importance of market-based actors such as firms, but subordinate their importance to that of the state. Within this per-spective, the economic power of transnational corpora-tions (TNCs) is acknowledged, but the overall power of such firms remains limited. In the end, firms are subject to the dictates of states. Insofar as firms have become important economic actors, this is only because states have abandoned regulation or lessened controls on the movement of capital. When firms encounter economic or political trouble, they quickly turn to their home states for protection.

Key dynamicsFrom an economic nationalist perspective, interna-tional political economy is constituted through the actions of rational states. If international relations are

conceived as a struggle for power, international politi-cal economy is a struggle for power and wealth. The determination of a state’s fate resides in its ability to ensure that its citizens reap advantages from interna-tional production and exchange. Market relations are important indicators of power and wealth but the market is governed by the activities of states. Eco-nomic activity is subordinate to political goals and objectives. Furthermore, economic actors are subject to political authority. The consequence of the salience of the state is that international economic relations are international political relations. The global econ-omy in this view is subordinate to the international political system.

IPE scholars working in this perspective argue that the nature of the global economy reflects the interests of the most powerful states. For example, Krasner (1976) has suggested that systems of free trade are most likely when a single power dominates the international system. This dominant, or hegemonic, power is needed to provide leadership and absorb the short-term costs of maintaining a free-trade regime. Analysts such as Gilpin (1981) have argued that changes in the distribu-tion of power between states increase the chances of conflict in the international system. Because of this view, considerable time can be devoted to contemplat-ing the rise and fall of great powers (Gilpin, 1987; Ken-nedy, 1987).

In the heated debate over globalization, both defen-sive and sceptical economic nationalist perspectives can be heard. The defensive posture arises from a fear that globalization may prevent state actors from fulfill-ing their goals. This is, of course, merely the continua-tion of the long-held suspicion of economic exchange held by economic nationalist thinkers. Unlike propo-nents of free trade, economic nationalists believe that the gains from trade are unequally distributed and favour those with greater economic and political power. Thus, defensive economic nationalists can recognize globalization as a threat and seek to counter its impacts. On the other hand, sceptical economic nationalists reject many of the current liberal arguments about glo-balization. They contend that globalization is largely a myth and that the power of the state remains undimin-ished. Since economic actors are subordinate to politi-cal power, these analysts argue that the policy environment conducive to globalization has been cre-ated by states. It therefore follows that states can alter this environment by changing their policies. Moreover,




it can be claimed that since states remain powerful actors and the only legitimate centres of authority in the modern world, nothing significant has occurred in the global political economy.

Conflict and cooperationWithin IR theory, realism, with its focus on the primacy of the state, the anarchical nature of international rela-tions and the inevitability of conflict, provides the foun-dation for economic nationalist thought. If realism is the perspective in international politics, economic nationalism is its equivalent doctrine in political econ-omy. Both share a commitment to the state and to the role of power in social life. Power-based theories such as economic nationalism and realism view the world as anarchic – lacking any central authority. Relations between states are thus characterized by unending con-flict and the pursuit of power.

International economic relations are therefore per-ceived as a zero-sum game where the gain of one party necessitates a loss for another party. The system’s struc-ture is perceived in conflictual terms. While economic nationalists believe that market relations can be posi-tive, they think that such activity can also be negative. Since participating in markets is potentially negative, economic nationalists argue in favour of state control of key economic activities or for state assistance to central economic sectors. The continued salience of economic nationalist perspectives is easily visible today in pro-duction, consumption, trade and investment. In terms of production, economic nationalist sentiment is visible in arguments concerning the continued production of some good or service within particular national bor-ders. This can be seen in terms of security concerns; that is, a state should not be reliant on the import of a specific good, because in times of conflict, this good may become unavailable. Some countries, such as France, protect their agricultural sector, while the US defends defence technology. It can also be seen in terms of the preservation of the cultural values of the nation. For example, many economic nationalists believe that it is vital to maintain the production of certain cultural products, such as films and music, within national bor-ders. In relation to consumption, economic nationalist arguments have been made against cultural imperial-ism, that is, in favour of the view that the import of some products pollutes the nation through the

introduction of foreign values. Whereas a liberal would argue that the sovereignty of the consumer is para-mount, economic nationalists maintain that the values of the nation are more important. From the foregoing, it is easy to see how, in the sphere of exchange, economic nationalists support the protection of domestic indus-tries. Furthermore, economic nationalist thought is behind arguments that seek to restrict foreign invest-ment, and supports the ‘rights’ of local investors over foreigners.

Economic nationalism todayAlthough the dominant approach to global political economy as espoused by the leading international insti-tutions and economic theorists is liberalism, economic nationalism continues to inform thinking and action. Countries continue to protect their markets from for-eign competition even though they have committed themselves to free trade. Although protectionism has been reduced as countries have lowered tariffs, many other mechanisms are used to keep out foreign prod-ucts. Chapter 6 reviews how states have used a variety of reasons to restrict trade, for example health and safety, environmental, cultural, employment, infant industry. Trade in services such as education and healthcare is a particularly sensitive subject, with many states unwilling to open up to foreign competition.

States have actively involved themselves in support-ing particular industries, contrary to liberal theory. Many developing countries have relied on their states to boost economic activity, shield domestic industries from competition, and direct finance to selected indus-tries. China has enjoyed remarkable economic growth, but has imposed strict conditions on foreign invest-ment, intervened to make sure its currency is relatively cheap and guided finance into particular activities through five-year plans. While benefiting from a gener-ally liberal and open economic system, China has engaged in economic nationalist policies in pursuit of development.

Concerns about economic nationalism increase in times of economic downturn. Politicians and the public may wish to increase discrimination against foreign economies and firms when growth slows in the belief that steps should be taken to support national econo-mies. Such an approach risks retaliation and the closing of world markets, which damages the interest of all




Box 1.1 Profile: Susan Strange – unorthodox realist

Susan Strange (2002) admitted that she never meant to become a professor, but ended up in the role after stints in journalism (with the Observer and The Economist) and working at Chatham House, a British foreign affairs research institute. She eventually became a professor at the London School of Economics and Warwick University.

Strange’s theoretical approach is difficult to characterize neatly (Tooze and May, 2002). It contains a strong element of power politics or economic nationalism because it focuses on the exercise of power and pays considerable attention to key state policies in structuring the global economy. Strange takes a realist approach by advising students to focus on the role of interests and to constantly ask the question ‘Who benefits?’ Yet, her work is also unorthodox because she urges observers to take account of the role of markets, corporations and technological innovations in changing the environment in which the state operates. In a series of exchanges with US IPE scholars, Strange continually went against the main-stream by variously arguing that the study of regimes was faddish and mistaken (1982), that US hegem-ony was not declining in the 1980s (1987) and that globalization was transforming the nature of state authority (1996).

Strange viewed IPE as a method of understanding the world that focused on the relationship between markets and authority. She argued that IPE should be an interdisciplinary area that brought together IR and international economics. Her broad approach is set out in a 1988 textbook called States and Markets, which argues that in addition to relational power (A forces B to do A’s will), power resides in structures. Structural power is the ability to shape the rules of the game in a particular area. Those who create the operating framework for everyone’s activities exercise power by eliminating some possibilities and making some out-comes more likely than others. Strange maintained that there were four key structures of power (security, production, finance, knowledge) and numerous secondary structures (transport, trade, energy, welfare). Strange reasoned that since the US exercised considerable structural power in the key structures, talk of decline was mistaken.

In the 1990s, Strange increasingly turned her attention to non-state actors. A major collaboration with a business school professor (Stopford and Strange, 1991) argued that traditional notions of diplomacy being an inter-state practice had to be expanded to include state–firm and firm–firm interactions. In a following book, Strange (1996) identified other actors such as business associations, bureaucrats and even mafias that were operating transnationally and undermining the authority of states. Most of Strange’s empirical work was in the area of finance and credit. She argued that the creation and control of credit was a significant source of power in the global economy. True to her realist roots, she traced the liberalization and globaliza-tion of finance to particular decisions or non-decisions of the most powerful states. Finance was globalized because it suited the interests of the most powerful states (principally the US and the UK). However, Strange also worried that the failure of states to exercise proper regulatory control over financial flows was turning the system into a form of ‘casino capitalism’ (1986). Her fear was that a widespread financial col-lapse would lead to a closing of the global economy (1998).

Strange played a prominent role in founding and supporting the study of IPE as an interdisciplinary field in Britain. Her pioneering studies in the field of finance inspired a new generation to examine the power relations flowing around credit issues. Strange’s insistence that IPE be an open field of intellectual enquiry influenced the development of the field in Britain by bringing in work from a number of different disciplines. Her stinging criticism of US intellectual trends provided room for British scholars and students to ask different types of questions and use different methodologies from their US counterparts.

states because it reduces the possibility of growth through trade. Protectionist policies of the 1930s are often blamed for worsening the Great Depression and this lesson is used against those advocating economic nationalist policies.

Visually, the economic nationalist approach can be represented by a game of marbles (Figure 1.1). The marbles are states, with different attributes, varying in their design, size, strength and beauty. They crash into each other in a competition to determine a winner.




the liberal PersPective

In contrast to the economic nationalist theories, liberals focus either on the individual or on a wide range of actors from the state to the corporation to interest groups. They do not see the state as a unitary actor, but as influenced by numerous factors. Rather than stress the inevitability of conflict, liberals search out the con-ditions for cooperation. They tend to play down the role

Figure 1.1 Economic nationalism as marbles

Box 1.2 Relative versus absolute gains

In many ways, disagreements between economic nationalists and liberals can be traced back to differences over relative and absolute gains. Relative gains refer to one actor doing better or worse compared with another actor. Absolute gains refer to whether an actor is better off compared with a previous point in time. Economic nationalists and their international relations cousins (realists) argue that since states are in competition with each other, their primary concern is how a state performs relative to its rivals. Does a particular arrangement increase or decrease the gap between states? In contrast, liberals believe that states are rational and will support measures that will increase their absolute wealth by the greatest amount.

As an example, imagine that the US and China were presented with two economic agreements that would govern their relationship for 20 years. Under agreement A, which involves carefully managing trade between the two countries, the US will grow at an annual rate of 2 per cent and China will grow at an annual rate of 2 per cent. Under agreement B, which involves a broad free-trade deal, the US will grow at an annual rate of 5 per cent and China will grow at an annual rate of 10 per cent.

An economic nationalist would opt for agreement A because it delivers similar benefits to both coun-tries, whereas agreement B causes China to grow much faster than the US. Liberals would disagree, arguing that the US should sign agreement B because it would increase growth by 5 per cent each year rather than the meagre 2 per cent of agreement A. The free-trade arrangement will make the US richer and more pros-perous than the managed trade agreement. A focus on relative gains would lead policy makers to prefer agreement A, while a focus on absolute gains would lead policy makers to choose agreement B. Which do you think the US should sign?

of force and coercion in human affairs and emphasize the ability of individuals to choose between attractive courses of action or negotiate their differences. Liberals see the world system as one of interdependence rather than anarchy. States and peoples can cooperate for mutual benefit in the liberal view. Rather than a zero-sum game where one’s gains are the other’s losses, liber-als see a positive-sum game where the pie grows bigger and everyone gains. Box 1.2 examines the debate over relative verses absolute gains.

Liberal theories of political economy emerged in 18th- and 19th-century Britain alongside the Industrial Revolution. They offered a critique of economic nation-alist thought by arguing that protectionism and restric-tion of economic activity were actually impoverishing states. Scottish moral philosopher Adam Smith ([1776]1983) advocated freeing up commerce and cre-ating larger national and international markets as a method of generating wealth for everyone. Englishman David Ricardo ([1817]1992) introduced the revolution-ary theory of comparative advantage, which demon-strated that all nations can benefit from free trade even if they are not as competitive as other states.

Today’s global economy is governed largely accord-ing to liberal principles. The trade regime is based upon




the goal of free trade, money flows into and out of most countries without great difficulty and all forms of eco-nomic activity are increasingly liberalized. However, there is a wide variety of liberal thought. It ranges from those who see the state fading away in an emerging bor-derless world dominated by corporations (Ohmae, 1990) to liberal institutionalists (Keohane and Nye, 1977), who stress the continuing importance of the state, but see it enmeshed in webs of interdependence and international organization. The book by Landes (1998), mentioned in Chapter 3, takes a particular type of liberal approach. It argues that those with liberal val-ues have been most successful in the global economy and implies that these values were freely chosen by peo-ple in Europe and the West. However, Landes parts ways with those liberals who argue that individual choice is more significant than cultural institutions.

Key actorsWithin the liberal perspective there are a number of key actors. For liberals, the starting point of analysis is the individual. Liberal economic theory, of which neoclassi-cal economic theory is a variant, begins from the analysis of individual wants and preferences and constructs a powerful explanatory framework on this basis. In the context of analysis of the global economy, liberal theo-rists focus on the behaviour of individuals, firms and states. In contrast to economic nationalism, the key eco-nomic actor is the individual rather than the state. Individuals in pursuit of self-interest will maximize the benefits of economic exchange for society. Within liberal theory the firm also plays an important role. Unlike mercant ilists who view the firm with a degree of suspicion, liberals see the firm as a source of economic wealth. The state is viewed with hostility by many liberals since it brings politics into the realm of economics. Liberals believe that if individuals are left freely to engage in pro-duction, exchange and consumption, all will benefit and that the insertion of state control distorts benefits and adds costs to participants in the market. People engaged in free economic exchange pursuing their own interests create a society-wide harmony of interest. From a liberal perspective the transnational corporation (TNC) is a positive force. TNCs bring advantages to both home and host countries. From the perspective of the home coun-try, the TNC represents an optimal mix of technology, managerial skill and capital. For host countries, TNCs

boost their economies through the transfer of capital, technology and access to markets.

Key dynamicsFor liberal theorists the market lies at the centre of eco-nomic life. Economic progress results from the interac-tion of diverse individuals pursuing their own ends. While liberals acknowledge that market relations are not always optimal, they tend to argue that intervention in the market is most likely to produce suboptimal out-comes. There is, of course, a broad spectrum of liberal thought. It ranges from John Maynard Keynes (1936), whose economic theories laid the foundation for inter-ventionist welfare governments in the immediate post-war period, to Friedrich Hayek (1944), whose free-market philosophy guided the neoliberal revolu-tion of the 1980s. They both subscribe to a belief in the positive role of markets and the ability of the market to lead to prosperity. However, they differ over the impor-tance of market imperfections and the policies that ought to be implemented to deal with market failure.

For liberal theorists, IPE is constituted by a search for wealth. On the whole, open markets will enhance growth and wealth, and firms will disseminate material wealth across the globe. Economic failure in this per-spective is often the result of government intervention. Many liberal theorists have been at the forefront of the debate on globalization. For what can be termed ‘hyper-liberals’, globalization is not only a reality (indeed, an inevitability), it is a positive force for good. Globaliza-tion breaks down artificial (for which read political) barriers and by unleashing the force of production, it can contribute to enhanced happiness for humankind. Thus, hyper-liberals welcome globalization. Keynesian-influenced liberals or those of a reformist stance per-ceive certain problems with the unfettered operation of the free market and are, therefore, sensitive to some unwanted consequences of globalization. They support globalization but emphasize the need for attention to market reform.

Conflict and cooperationLiberal theorists view international relations and the international political economy as essentially coopera-tive. Indeed, they believe that market relations will lead




to positive outcomes for all. In other words, economic relations are positive sum. A standard liberal theory that exemplifies this belief is the theory of comparative advantage, which shows that even in a situation where one country enjoys a superiority in the production of all goods and services over a second country, trade between the two countries will benefit both countries. This is explained in more detail in Chapters 4 and 6.

One persistent liberal belief has been that economic nationalist policies lead to conflict. Unlike Marxist writers who denounce the growth of global capitalism as a cause of war, liberal theorists view increased inter-national interaction as a source of prosperity and peace. The liberal belief in the connection between protec-tionist policies and conflict and the reverse argument, namely that capitalism favours peace, are central to lib-eral critiques of the international economic order. The German philosopher Immanuel Kant ([1795]1991) foresaw an era of perpetual peace when systems of free trade, a coalition of republican states and the fear of destructive warfare would bring about an era of calm and prosperity. Towards the end of the First World War, US president Woodrow Wilson ([1918]1986) advocated liberal principles of free trade, self-determination and the use of international organizations to settle disputes between states.

The framers of international economic institutions after the Second World War were supporters of this view. It was argued that the war had its origins in the economic nationalist policies of the 1930s. As a conse-quence of the Great Depression, governments resorted to a series of protectionist measures that eroded confi-dence in international cooperation. As a result of eco-nomic nationalist policies, the basis of collective security was shattered and an atmosphere conducive to dictators was created. The shift from economic compe-tition to military conflict was, in this view, inevitable. Hence, there was the need after the war to design insti-tutions to foster international economic cooperation and to include within those institutions mechanisms to prevent states from resorting to competitively national-ist policies.

Within the study of IR, liberal theories of world pol-itics and of political economy share assumptions con-cerning the pluralist nature of the international system and the feasibility of cooperation. Theories of interde-pendence developed in the 1960s to explain the con-nection between increased economic exchange and interconnectedness and the long peace among Western

nations after 1945. They echo classical liberal political economy. These theories emphasized the economic and political benefits of economic interchange. Interde-pendence was proffered as both a description of events and a prescription for the solution of conflict.

In the 1980s and 90s, liberals continued to argue that international cooperation was both possible and desir-able. In contrast to economic nationalists or realists, liberals argued that international agreements or regimes would maintain international economic order even if hegemonic states declined (Keohane, 1984). With the end of the Cold War and the rapid spread of liberal eco-nomic models to many states in the 1990s, it appeared that the liberal faith in cooperation and progress was justified. Some even went so far as to claim that history had ended because the liberal democratic model had triumphed over other forms of social organization (Fukuyama, 1992).

Liberalism todayLiberal neoclassical economics, which stresses the importance of rational decision makers in free mar-kets, dominates the field of economics. International institutions such as the World Trade Organization (WTO) are founded on liberal principles of free trade, while the IMF and the World Bank preach liberal pre-scriptions to those seeking development funds or loans to see them through financial crises. TNCs urge state leaders to open their markets to the free flow of invest-ment and many government officials eagerly comply. Indeed, many states have bound themselves to an ever more liberal economy through participation in inter-national organizations and international economic agreements such as regional or bilateral free-trade agreements. The market continues to expand by bring-ing in more and more countries as participants (such as China) and by encompassing a wider range of activ-ities such as services (healthcare, education, childcare, housework).

Despite the dominance of liberalism, there are chal-lenges to liberal theory and practice from within and without. Within liberalism, the 2008 financial crisis reopened the debate among liberals about regulation and the role of government in economic crises. Does self-regulation of financial firms lead to economic effi-ciency or corruption and financial collapse? Should governments bail out banks with taxpayers’ money or




Box 1.3 Profile: Robert Keohane – liberal institutionalist

Robert Keohane was born into an academic family and began a US teaching career after graduating from Harvard in 1966 (Keohane, 1989a). His academic career has taken him to Stanford, Brandeis, Harvard, Duke and Princeton universities. His research has had a major role in influencing the study of IPE and IR in the US and beyond.

Keohane is a central figure in what has become known as the liberal institutionalist approach to IPE and world politics (1989b). This approach suggests that institutions or sets of rules and norms can have a signifi-cant effect upon state behaviour if they have mutual interests. Institutions include formal international organizations, international regimes or conventions and customs. Liberal institutionalism was developed as a critique of realist / power politics / economic nationalist approaches to IR and IPE. The emphasis is on how institutions can help states overcome barriers to cooperation. Although Keohane himself prefers to be known simply as an institutionalist (2002, p. 3), the adjective ‘liberal’ is still useful because it refers to some of the liberal attributes that underlie his approach. These include a focus on the individual and a belief that properly designed international institutions can go some way to creating a more humane global system.

Keohane’s first major work was written with Joseph Nye and it argued that there were certain times and issue areas when the assumptions of realist or power politics approaches did not hold sway (Keohane and Nye, 1977). They labelled these situations as ‘complex interdependence’ and suggested that under certain circumstances states could use international institutions to bolster cooperation. They also argued that in such situations cross-border links between officials could lead to outcomes different from those that power politics approaches would have predicted.

In 1984 Keohane published After Hegemony. It sought to explain why, contrary to realist assumptions, states continued to cooperate and participate in international agreements even after the major power that sponsored the agreements entered a period of relative decline. This was a significant issue because many analysts were worried about the decline of US power relative to that of other states and feared that this would make the international political economy increasingly unstable. Keohane argued that the benefits of arrangements in issue areas (such as money, oil or trade) or regimes continued independent of the rise or decline of the power of particular states. Regimes exist because they facilitate negotiations between states and allow states to overcome barriers to collective action such as uncertainty. Keohane’s work helped to spark increasing attention to the issue of regime creation and maintenance. Indeed, regime theory became a mainstay of US IPE scholarship.

Another important aspect of After Hegemony was Keohane’s use of economic theory to explain the activity of states. Drawing inspiration from economic theories that claimed to explain the activity of corpo-rations, Keohane analysed state behaviour in terms of market failure, transaction costs and uncertainty. Mar-ket failure refers to a situation where transactions do not take place because the market is arranged in such a way as to make otherwise rational activity irrational. In the case of IPE, states might not agree to cooper-ate because they are unsure of the motives of other states. Regimes help to resolve this market failure by providing information about other states’ behaviour and an element of predictability in inter-state interac-tions. States cooperated in international regimes because these regimes solved particular problems such as lack of information and uncertainty about other states’ intentions and behaviour. Keohane’s use of eco-nomic models and theories of rational choice coincided and blended well with the importation of economic models in other areas of US political science. The success of his book and persuasiveness of his argument helped to bolster rational choice methodology in US IPE.

Keohane’s work has been important in the field of US IPE because it has advanced understanding of how states are able to cooperate through international regimes.

should they be allowed to go bankrupt? How should governments respond to financial and economic crises? Is government’s role to balance budgets or spend to jump-start economic growth? What should govern-ments do if economic growth stalls?

There are also challenges to liberalism from those who do not accept its claims. States may be happy to export into an open liberal market, but reluctant to expose their own industry to competition, as we will see in the chapters on international trade and




development. Harmed by rapid capital flows, other states may seek to intervene in the financial markets to slow the movement of money between countries or restrict the conditions under which investment takes place. Other groups may challenge liberalism because they advocate different agendas, such as labour rights (Chapter 9), gender equity (Chapter 10) or environ-mentalism (Chapter 12). A common criticism is that the liberal view underestimates the significance of powerful firms and states and their ability to distort and manipulate markets.

A visual representation of liberal IPE theory is the cobweb (Figure 1.2), where a giant web of interdepend-ence connects actors such as states, corporations and people in a complex set of relations.

the critical PersPectiveMarxist theory emerged in the 19th century in reaction to liberal thought. Marxism’s critical approach to liber-alism can be seen in a number of other bodies of thought that move away from the individual and states to consider other units of analysis. They are sometimes called ‘critical theories’ because they question the way the world is organized and seek to change the world. They are sometimes labelled as ‘radical’ because they challenge established forms of organization. The three most common variants of critical thought in IPE are

Marxist, feminist and environmentalist theories. Post-structuralist and cultural political economy approaches have also recently been applied to IPE. This chapter concentrates on Marxist theories, while feminist theo-ries will be highlighted in Chapter 10, environmental theories in Chapter 12 and poststructuralist theories in Chapter 13.

Marxist theories focus on class and the interests of workers rather than state interests. Writing during the English Industrial Revolution, Karl Marx took issue with the idea of a harmony of interests that the liberals advocated. Marx and his co-author, Engels, discerned an ongoing conflict between workers and capitalists that would only be resolved when the workers seized power (Marx and Engels, [1848]1977). Feminists also see a world of exploitation but their theories look at gender relations between women and men. They seek to uncover how our ideas about what men and women are supposed to be shape the ways in which society is organized. Mary Wollstonecraft ([1792]1992), an 18th-century early feminist writer, criticized male lib-eral theorists for ignoring the role and interests of women in their political theories. Green theories have taken the environment and the planet as the objects to be highlighted. They examine how people shape and are shaped by the environment. Neo-Gramscian theo-ries, which evolved out of Italian Marxism, stress the role of transnational classes and ideology in their efforts to understand the global economy. We use the term ‘critical’ as a label for these theories because they are united by a critical attitude to prevailing social arrangements. Here, we focus on Marxism since it is the oldest of the theories grouped under the critical perspectives heading.

These critical theories stress the nature of oppres-sion within and across societies and the struggle for justice waged by or on behalf of workers, women and the environment. Frank’s (1998) study, ReOrient: Global Economy in the Asian Age, is close to this form of analysis because he stresses European exploitation of others’ resources in the ‘rise of the West’. However, he differs from traditional Marxists who have seen Western civilization as being at the forefront of human development because it was the birthplace of capitalism. Frank disputes both the claim that capitalism originated in Europe and that European developments are more significant to world history than developments in Asia.

Figure 1.2 Liberalism as a cobweb




3 Marxists argue that capitalism leads to overproduc-tion or underconsumption, giving rise to fluctua-tions in the business cycle and undermining social stability.

A revision of Marxist thought called ‘dependency theory’ has been used to explain the persisting poverty of many states. Dependency theory suggests that poor countries faced immense obstacles to development because they were vulnerable to economic exploita-tion from developed states (Dos Santos, 1970). The links between the rich and the poor were thought to make the poor poorer and the rich richer. Underdevel-opment of some parts of the world was caused by development in other parts of the world. This school of thought informed developing countries’ attempts to create a New International Economic Order (NIEO) in the 1970s (Cox, 1979). This approach was under-mined in the 1980s as many developing states adopted liberal economic policies in the wake of the debt crisis.

Radical theorists have tended, for a variety of rea-sons, to oppose globalization. It has been argued, for example, that globalization is a myth or merely imperi-alism in modern clothes. According to this argument, globalization represents an ideological intervention into political economy. It ostensibly describes changes in the world but, in reality, it is a set of prescriptions in support of free markets and an instrument to increase the power of capital over labour, the West over other states, and an instrument designed to further the inter-ests of the leading capitalist power, the US. In this sense, globalization has to be resisted since it too maintains and increases exploitative relations. At the heart of the radical argument is the view that globalization is not distinctive, that is, discussion of globalization is merely the contemporary version of imperialism. To discuss political economy in terms of globalization may mask real power relations.

In the 1980s and 90s, Marxist IPE was reinvigorated by the work of scholars drawing inspiration from Anto-nio Gramsci. Writers such as Robert Cox and Timothy Sinclair (1996) and Stephen Gill (1993) focused on the role of social forces and ideology in liberalizing and globalizing economic relations. They argued that glo-balization based on neoclassical liberal economic prin-ciples was a political project that transformed national states into instruments of global liberalization and economic management. Part of this project involved

Key actors

Marxist writers begin with a focus on class as the main ‘actor’ in the global political economy. They reject the individualism of liberal theory and embrace the collec-tivist approach of economic nationalist perspectives. However, Marxist theory rejects statism and focuses instead on the significance of class. This focus arises from the Marxist account of capitalist relations, which are predicated on exploitation. The Marxist concept of class has been open to various interpretations and cri-tiques. We define class simply as arising from one’s posi-tion in the structure of production. Marx defined class in relation to the structure of production, which creates owners of the means of production (the bourgeoisie) and the labourers who sell their labour power to the bourgeoisie (the workers).

Within Marxist writing the firm is an instrument of exploitation. TNCs contribute to the exploitation and oppression of the working class. The centraliza-tion and concentration of capital visible in the form of TNCs is a key feature of imperialism, whereby dominance is expressed in the global political econ-omy. In this perspective, the state is the representative of class interests rather than the expression of the har-mony of communal interests posited by economic nationalists.

Key dynamicsDominance and exploitation among and within socie-ties provide the main dynamic for Marxist theories of IPE. Unlike liberals, Marxists view market relations as inherently exploitative. Under capitalism, workers are denied a fair remuneration because capitalists pay workers less than their labour is worth. Marxists view international economic relations as inherently unstable and conflictual because of three tendencies of capitalism:

1 The tendency for the rate of profit to fall sees capital-ists engaged in fierce competition with each other, which tends to drive down workers’ wages.

2 Capitalism leads to uneven development as some centres increase their wealth and growth at the expense of others. Uneven development sows the seeds of conflict between countries.




convincing people that neoliberal policies were actually in their best interest. In this view, the hegemony of a particular world order requires an ideological domi-nance that secures the broad consent of those ruled in an unequal and unjust manner.

Conflict and cooperationCritical writers tend to perceive international economic relations as a zero-sum game. The structure of global capitalism is fundamentally conflictual. Two forms of conflict are prevalent in the global economy. Within states, capitalists and workers have competing interests and the state is the scene of a class struggle as the work-ers and bourgeoisie clash. According to Marxists, this conflict is objective and arises from the law of motion of capital. In the international arena, the clash between workers and capitalists is often obscured by national-ism and the intervention of the state. Through the mechanism of imperialism, dominant states oppress weaker ones and this sets up an international struggle between imperialists and their victims.

International conflict is inevitable because of the drive for profit. Different capitalists seek the protection of their state and this leads to war. Marxist theories of imperialism have, in different ways, accounted for the tendency of capitalist states to go to war. Lenin’s theory of imperialism, the most well known of these theories, combined two different explanations of capitalist development. One part of his theory focused on under-consumption in domestic markets. Because of under-consumption, capitalists were compelled into overseas adventures since they could not maintain their rates of profit on the basis of domestic demand. Another part of his theory focused on the growth of finance capital and the merger between finance and industrial capital to form monopoly capital that sought to gain profit through overseas lending. He argued that conflict and war are a necessary end result of this competition.

At the turn of the 21st century, conflict between social forces was also seen to take place on a global scale. Elites attempting to constitutionalize neoliberal principles in institutions such as the WTO and the IMF met with opposition from social movements trying to safeguard environmental regulation, raise labour standards, improve gender equity and lobby for economic justice (O’Brien et al., 2000). Critical analysts depict a global conflict that takes place within, above and across states (Gill, 2003).

Critical theory today

With the demise of the Soviet Union and communism, Marxist states ceased to exist. The critical perspective lives on in a number of areas, however. As a form of analysis critical of capitalism’s inequalities and recur-ring crises, Marxism continues to have adherents. Although Russia and China eventually embraced a cap-italist model, many of the problems of capitalism have not been resolved. The financial crisis and ongoing aus-terity since 2008 have led to renewed interest in Marxist critiques of capitalism, such as Harvey’s (2011) The Enigma of Capital. In particular, the political power of financial capital is a subject of vigorous debate, as finan-cial institutions have prospered in the face of the crisis, while populations have borne the brunt of austerity. To give just one example, many Wall Street bankers contin-ued to receive financial bonuses on top of their salary, while the wealth of the average American family declined by 40 per cent between 2007 and 2010 (Lee, 2012).

Other groups that also question the power imbal-ances and inequality in the global economy often draw on some version of critical approaches. For example, development groups struggling against rules of trade or finance that disadvantage poor countries highlight the rigged nature of the game. Social movements organizing against the lack of education and employ-ment opportunities for girls can draw on a feminist analysis. Environmentalists concerned about the dev-astating effects of economic growth and runaway con-sumption put the health of the planet ahead of individuals or the state. We will return to these variants later in the book.

A visual representation of critical IPE theory is the layer cake (Figure 1.3), where groups are stacked in lay-ers across the global political economy with some classes (or genders, or races or species) on the top and others on the bottom.

Figure 1.3 Critical theory as a layer cake




Box 1.4 Profile: Robert Cox – historical materialist

For Canadian-born Robert Cox, academic life was a second career after spending 25 years in the International Labour Organization (ILO). At the ILO, Cox served as a staff officer to the director general, chief of the programme and planning division, and as director of the International Institute for Labour Studies. After leaving the ILO, Cox took a teaching position at Columbia University in New York before settling at Toronto’s York University in 1977.

Cox describes his approach to IPE and IR as historical materialist (2002a, pp. 27–9). The historical part involves recognizing that each historical era has a particular sensibility and set of institutions and understand-ings. This contrasts with approaches claiming that there are universal laws of human behaviour which apply across time. The materialist part places the organization of production and the social relations around produc-tion at the centre of analysis. In other words, class and class conflict play an important part in understanding political economy. Central to Cox’s work has been the idea that ‘production generates the capacity to exer-cise power, but power determines the manner in which production takes place’ (1987, p. 1). He takes a par-ticular approach to historical materialism, which mixes theoretical insights from Marx with those of scholars such as Vico, Sorel, Weber, Gramsci and Polanyi. The result is that many liberals and economic nationalists label Cox a Marxist, while many Marxists argue that he has deviated from the Marxist path (Schechter, 2002).

As the title of a collection of Cox’s essays indicates, his primary interest has been Approaches to World Order (1996). Cox’s experience at the ILO and his study of international organizations prompted him to think about the nature of power and dominance in the global economy. Cox (1983) theorized that powerful states exercise a form of hegemony that goes far beyond military strength. Hegemonic states, such as Brit-ain in the 19th century or the US in the 20th century, drew their power from a particular form of production and social relations. Hegemony requires dominance in the economic, political, social and ideological realms. A hegemonic power is able to convince others that their interests are the same as those of the dominant power. As a result, hegemonic states try to express their interests as universal norms and use international organizations to influence other states.

Cox (1986) also argued that it was a mistake to focus on the state and ignore the role of social forces. Social forces are groups of people who occupy a particular place in the global economy by virtue of their role in the organization of production. Some social forces, such as the people who own or work in an inter-nationally competitive industry, advocate free trade, while other social forces will oppose free trade as a threat to their interests.

In the theoretical realm, Cox (1986) was significant for highlighting the differences between critical the-ory and problem-solving theory. Problem-solving theory looks at the world as it is and concentrates on how issues can be addressed in the existing system. Critical theory stands back from the existing order and asks how that order came about and under what conditions it could be changed to a different form of order. Critical theorists seek to contribute to a better social order, thus they embrace emancipatory strategies. Problem-solving theory is about managing the system and critical theory is about changing the system. Most radical analyses that call for major changes in the global political economy fit into this critical category.

Cox’s most significant impact in the study of IPE has been to raise critical questions about the system of international order and to contemplate how one might achieve a more egalitarian and sustainable system. This has led him to disagree with the normative and practical implications of economic liberalism, the fatal-ity of economic nationalism and the dogma of fundamentalist Marxism.

contending PersPectives: a sUmmaryThe question arises as to why there are so many theories and what the relationship is between various theories. There are several reasons for the existence of multiple theories. According to Cox (1986, p. 207): ‘Theory is

always for someone and for some purpose.’ Each theory has a different goal in mind. For example, economic nationalist theories are concerned with the security of the state, liberal theories with building wealth or coop-eration and critical theories with pursuing economic, gender or environmental equity. While they are all try-ing to understand the world, they are looking at different




aspects of human existence. A second and related rea-son is that a particular theory usually advances the causes or interests of a particular group. Richer, more satisfied people and states tend to favour liberal theo-ries that do not threaten their interests, while those dis-advantaged by the system are more likely to espouse critical theories. A third explanation is that it is impos-sible to prove a theory right or wrong. Evidence is often disputed and interpreted in different ways. Moreover, unlike the laws of nature, people are able to reflect upon their behaviour and change their form of organization and interaction. People may act according to mercantil-ist theories in some eras or situations and along liberal principles in others.

Table 1.2 presents a summary of the perspectives. In the discussion so far, our intention has been to high-light the existence of various interpretations. But what is the relationship between various theories? Are they in conflict or can they be made compatible? At their core, theories about IPE are incompatible because they

have different basic assumptions about the units of analysis, the nature of the system and the motivation of actors. Yet, each theory can point to some evidence to support its existence and each seems to be useful in explaining some aspect of the global political economy. Some theorists (Strange, 1988) have suggested that peo-ple take an eclectic approach to theory – picking and choosing as they wish. This can have some advantages, but risks incoherence as one jumps from perspective to perspective. Readers should consider some systemized form of integration, where various theories may be used under particular circumstances or in a hierarchy. For example, one could have a general power politics approach while conceding that the system is also char-acterized by class and gender exploitation and that there are times when cooperation can be more benefi-cial than conflict. Alternatively, some theories may be more applicable in selected time periods.

IPE brings together knowledge from a number of fields and disciplines to increase our understanding of

Table 1.2 Comparing the perspectives

Aspect Economic nationalist Liberal Critical

historical origins 15th century 19th century 19th century

major figures hamilton, list, Krasner, Gilpin, strange

smith, ricardo, Kant, Wilson, Keynes, hayek, Keohane, nye

marx, lenin, frank, Cox

Variants mercantilism, realism free trade, interdependence marxism, feminism, environmentalism

human nature aggressive Cooperative malleable

Units states firms, states, nGos, iGos, individuals

Class, gender, planet, global capitalism

View of the state Unitary actor Pluralist state: diverse interest representative of class interest groups

View of TnCs beneficial/harmful beneficial exploitative

behavioural dynamic state as power seeking rational actor

individual as rational actor but outcomes not always optimal

Dominance and exploitation within and between societies

market relations Potentially negative Positive exploitative

system structure anarchy/conflictual Cooperative/interdependence hierarchy/conflictual

Game metaphor Zero sum Positive sum Zero sum

hegemony importance of a dominant state

Post-hegemonic cooperation hegemony in state and society

international institutions not very significant important serve interests of wealthy (states, firms and classes)




the relationship between economics and politics across the national/international divide. Economic national-ism, liberalism and critical theories are three broad schools of thought in the field, which both explain the

behaviour of actors and offer prescriptions about what states and people should do in the global political econ-omy. In Chapter 2, we turn our attention to the evolu-tion of the field and methods used to study it.

Further Reading

A wide-ranging and eclectic collection of articles examining IPE theory can be found in Ronen Palan (ed.) Global Political Economy: Contemporary Theories, 2nd edn (2012). Susan Strange outlined her critique of runaway finance in Mad Money: When Markets Outgrow Governments (1998), while an overview of her work is presented in Roger Tooze and Chris May (eds) Authority and Markets: Susan Strange’s Writings on International Political Economy (2002). Robert Keohane’s groundbreaking work on regimes is found in After Hegemony (1984), while a collection of important essays is contained in his International Institutions

and State Power: Essays in International Relations Theory (1989). Many of Robert Cox’s most influen-tial writings are contained in (with T. Sinclair) Approaches to World Order (1996). A critical femi-nist take on GPE is V. S. Peterson’s A Critical Rewriting of Global Political Economy: Integrating Reproductive, Productive and Virtual Economies (2003).

Two journals that publish a great deal of IPE analy-sis are Review of International Political Economy, and New Political Economy, both journals avail-able at tandionline.com



Index

Abu-Lughod, Janet 25, 41–2, 43, 45, 62 absolute advantage 71, 72, 104 absolute versus relative gains 12, 106 Africa 41, 51, 52, 56, 61, 62, 64, 164, 183, 270, 283, 291,

307, 315 15th century 42, 43, 45, 47Cold War 87 decolonization 90debt 161–3, 236 development 60, 70, 91, 92, 94, 136, 219, 220, 221, 223,

226, 228, 234, 235, 238, 255, 260, 318 financial flows 144, 176, 187, 232, 233 gender 181, 203, 204health crisis 161, 273–4, 297–8scramble for 73, 74, 75–6, 79, 84, 85 slave trade 53, 54–5, 58, 59 technology gap 268 trade 109, 116, 117, 118, 122 see also individual countries

After Hegemony 15, 21agency

and change 200 and structure 36, 37

Agenda 21, 250 agrarian question 195–6 agriculture, 52, 53, 59, 89, 94, 180, 281, 303, 309

development 57, 201, 203, 204, 211, 218, 228, 233, 259, 260 division of labour 98, 195–6trade 97, 108, 112, 116–7

aid see economic aid Algeria 74, 90, 181, 228 Americas 41, 42, 43, 50

15th century 45–46 conquest of 51–4 dollarization 156–7 see also individual countries, MERCOSUR, NAFTA

anthropocene 242anthropocentric 242, 243, 244anti-dumping 111, 113 anti-globalization movement 97

see also civil society, Occupy Apple 94, 95, 126, 132, 190, 288, 294 Argentina 65, 164, 225, 228

financial crisis 161, 163, 174, 221, 311nationalization of oil industry 142 trade 117

Asia relations with Europe 1400–1800 56–8 see also individual countries

Asia Infrastructure and Investment Bank (AIIB) 235, 309, 310

Asian financial crisis 96, 141, 157, 158, 164, 171, 233, 269, 300, 308, 309

rival interpretations 7–8 Asia-Pacific Economic Cooperation 121, 123 Asian values 91, 226

see also Confucianism Association of South East Asian Nations 97, 98, 120austerity 18, 91, 172, 173, 178, 194, 212, 270, 277, 278Australia 52, 57, 86, 147, 152, 164, 213, 220, 308

and asylum seekers 312 trade 103, 117, 120

autonomy 37, 44, 66, 84, 294, 306, 316 monetary 152, 155, 177national 118, 142, 143–4, 151, 239, 300

Ayutthaya 57 Aztec Empire 42, 45–6, 61

balance of payments confusion over 151 and debt 227 defined 152 and gold standard 69 and IMF 149, 150 and TNCs 130, 139, 140

balance of power 63, 64, 68, 78, 112, 132, 191, 216, 296, 301

19th century 71–3, 84 ‘Bangalored’ 189 Bank for International Settlements 97, 163, 164 banks

and financial instability 49 types 48 see also individual banks, finance

Baran, Paul 25Barings Bank 160 Barnett, Richard 128Barraclough, Geoffrey 77 barter 48, 68, 103, 182 basic needs 31, 32, 228, 229, 230, 232, 233, 235, 305, 311Basel Committee on Banking Supervision 164 Beckerman, Wilfred 247



Index 343

Belgium 76, 15415th century 46, 47, 75and the Congo 52, 73, 74, 78, 79, 80, 81

Bhopal 251 Biersteker, Thomas 93 ‘Big Bang’ 158 biodiversity 243, 244, 252, 253bioprospectors 274 Bitcoin 315Boli, John 97 bonds 94, 127, 134, 157, 158, 168, 169, 172

explained 171 Boserup, Ester 219 Braudel, Fernand 62, 183 Brazil 91, 92, 93, 99, 110, 112, 221, 225, 257, 259, 260,

274, 295finance issues 161, 163, 164, 269 global governance 91, 122, 228, 235, 304, 308, 309–10pre-1900 52, 54, 77 TNCs 131, 141, 186, 196, 305trade 116, 117

Bretton Woods system 96, 134, 149–50, 227brides, purchase of 214BRICS 91, 96, 221, 235, 237, 238, 307–10Britain 11, 19, 52, 63, 76, 83, 87, 90, 181, 189, 194, 292

balance of power 71–3Bretton Woods 149, 150ERM 161 financial crisis 152, 154, 155, 167, 212 financial deregulation 158 free trade 71, 82, 280 gold standard 68–70 and India 57, 75, 183–4 Industrial Revolution 64–7, 68, 218, 278, 283 interwar period 78, 80, 81, 82 and liberalism 8, 12, 66–7, 268, 270and slave trade 55, 59 see also Pax Britannica, imperialism, United Kingdom

British East India Company 57, 64 Brundtland Commission 231, 255business associations 11, 192, 305, 306

see also transnational corporations business conflict theory 305Bush, George W. 124, 167, 174, 257, 289, 300

Cairns Group 117Caldwell, Lynton 249call centres 185, 189, 190 Canada 31, 57, 86, 87, 94, 152, 154, 180, 213, 292, 297, 304,

310, 311dollarization 156 pre-1900 53, 54, 59, 64, 308 resource industry 295trade 111, 117, 121, 162

canals 49 Grand 44 Nicaraguan 238Panama 65, 66, 238Suez 57, 65

capital account 151, 270capital controls 80, 134, 152, 158, 164 capital mobility 98, 129, 133, 151–2, 153, 155, 163, 165,

186, 314 capitalism 20, 85, 124, 196

‘casino’ 11, 162, 178 and conflict 14, 18, 285‘crony’ 6, 7, 165 and development 83, 84, 89, 218, 222, 229–32, 234, 269 and environment 245–9, 253–4 exploitation 17, 18financial crisis 167 gender 200, 216 and imperialism 74, 76 national 227–29, 300 origins 16, 62 and peace 14 varieties 2, 7, 29–30, 33, 91–3, 99, 301and under consumption 17uneven development of 17

Carr, E. H. 78 Castells, Manuel 94Central America 51, 52, 66, 87, 109, 135, 181, 294central bank 97, 150, 151, 153, 154, 157, 163, 164,

168, 315 China 169, 170 defined 48 European 155, 170, 302

and gold standard 70independence 152 lack of international 68 lender of last resort 49, 80 reserves 69, 149, 154, 155, 163, 168, 170 Thailand 6 Zimbabwe 156

see also United States Federal ReserveCerny, Phil 92 Chiapas 163, 196, 230 children 53, 57, 212, 290

care for 96, 179, 211 poverty of 208, 304, 310 and sexual exploitation 180, 212, 213, 307 and work 63, 65, 83

China 14, 18, 62, 64, 75, 77, 84, 86, 231, 283, 28815th century 41, 42, 43–4, 45, 47, 50, 51, 52, 53and BRICS 91–2, 99, 112, 307–10communist era 81, 89, 91currency 170 development actor 235, 238, 259–60



344 Index

China (Continued)economic nationalism 10 environment 254, 257 financial crisis 164, 167 and foreign investment 92, 93, 98and global division of labour 125, 180, 188–9, 190–1,

193, 195 and global governance 116, 150, 164, 228, 300, 304 health issues 221, 296, 297and Japan 79 and Latin America 174opium wars 58 remittances 187 security issues 292, 295sovereign wealth fund 159 Taiping rebellion 73, 84 technology 273 TNCs 126, 131trade 118, 120, 123 and US 12, 157, 169, 170

Christianity 51, 53, 75cities 43, 45, 46, 49, 50, 52, 55, 56, 62, 63, 66, 84, 93, 127, 179,

218, 262, 302–3civic associations

see civil society, nongovernmental organizationscivil society, 201, 221, 268

debt relief and development 235–6, 237 environment 250, 258, 260gender 206, 207global governance 305–7 international institutions 96, 234 trade 122, 123TNCs 145, 146, 193, 295

civilizations African 45American 45–6Chinese 43–4, 307 Indian 44–5, 54 interaction 40, 41–2, 51–8, 58–62, 74–6, 102, 290 Middle Eastern 41–2Western 16, 41, 46–51, 66

class 20, 37, 180, 181, 219capitalist 67, 245landholding 59 in Marxist theory 16–18, 25, 247, 265merchant 66middle 163, 214, 251 transnational 186 under 312upper 54, 283and women 200, 202, 211 working 67, 69, 83, 85, 88, 194 see also division of labour, elites

climate change 218, 238, 243, 244, 261, 300, 311conflict 239, 264finance 258negotiations 239, 256–8security 258–9, 280significance 242

Clinton, Bill 124, 193, 214, 257, 275, 276, 294codes of conduct 145, 193Cold War 131, 158, 195, 218, 280, 307

confrontation 86–88, 134, 150, 229, 230–1, 283, 285–6, 291

decolonization 90 end of 14, 96, 231, 251, 280–1, 286–7, 292, 293, 296, 301impact 99see also security

Coleman, William 316 Commodity Futures Trading Commission 275, 276common sense 104, 263, 265, 278communication 82, 94, 103, 107, 127, 157, 158, 207, 233,

295, 306between people 95, 213, 266, 293, 315between states 73infrastructure 26, 97, 129, 132–3, 144, 186, 272, 289see also information technology

communism 18, 67, 89, 109, 194, 229, 230–1, 263, 285 Chinese 89Russian 81, 89, 219

comparative advantage 24, 109, 110, 113, 116, 143, 116, 117, 118, 120, 124

criticisms of 105–8 and division of labour 183, 184 explained 72and liberalism 12, 14, 71, 104–5 and TNCs 129, 130, 143

compliance 111, 192, 291, 292, 303 Concert of Europe 71, 301 Confucianism 44, 226

see also Asian valuesCongo 85, 117, 220, 228, 236

and colonialism 52, 55, 75conflict minerals 288 under rubber terror 73, 74

constructivism 2, 30–1, 35, 38, 265 consumers 281

and economic theory 23and finance 153, 156, 160, 167, 168, 169 and labour rights 189, 190, 193, 196 and TNCs 130, 132, 137, 295 and trade theory 104, 105, 106, 110, 111, 121and women 203, 213

consumption 196, 199, 267, 288 pre-1900 45, 58, 70 and development 218, 227



Index 345

and ecological shadows 254and environment 241, 244, 246, 248, 253–4, 311, 312 and finance 167, 168, 169, 170, 276, 277in IPE 9, 10, 13, 28, 32, 34, 35 mass consumption 53, 92, 136, 185 and trade 104, 108, 109, 111under consumption 17, 76

convergence 177, 203, 301cooperation 20, 43, 58, 61, 73, 88, 89, 97, 120, 133, 176, 193,

194, 226, 303, 306, 309, 313 building 28, 96, 112critical views 18, 19 economic nationalist views 10, 13, 21 environmental 242, 244, 245, 248, 261 financial 142, 146, 150, 153, 154 liberal views 12, 13–4, 15, 25 security 282, 287, 295, 297 see also regimes, regionalism

COP 21, 256–7Corn Laws 71 corporations 11, 13, 15, 23, 29, 126

and global governance 95 origins 59, 66 see also transnational corporations

cotton pre-1900 43, 55, 57, 60, 63, 64–5, 66, 67, 183 at the WTO 116, 117, 118

Cox, Robert 1, 17, 19, 20, 21, 265, 278 credit 11, 67, 69, 133, 134, 144, 148, 151, 153, 157, 170, 172,

230, 276, 277, 315 crisis 49, 157–65, 166–8, 171, 173, 177interwar 78, 79, 80, 81micro 159 origins 47–9 post-1945 system 88, 149–50 power of 303 see also debt, finance

credit rating agencies 171, 177, 275, 276 crime

financial 176, 177organized 213, 293–4, 298, 306

critical theory 16–19, 105, 199, 201see also dependency, environmentalism, feminism,

MarxismCroce, Benedetto 40 cruise ships 181–2 culture 89, 228, 292, 291

approaches 40 and economic growth 40, 66, 130, 181 gender 60, 198, 205, 213, 214protection of 107, 139 transformation 51, 57, 62

currency controls 103

current account 151 see also balance of payments

Cutler, Claire 305, 316

De Goede, Marieke 265debt crisis 17, 91

Argentina 174causes of Latin American 160–1 consequences 92, 96, 143, 150, 161–2, 167, 229, 230,

235–6, 239, 269, 313 European 170–3

debt relief 165, 173, 235–6 decolonization 77, 89–90, 99 deflation 69, 152, 160 democracy 27, 28, 89, 94, 181, 195, 198, 231, 284, 286,

308, 309 criteria 316and finance 177–8and free trade 25and global governance 313–5 and peace 285 promotion 86, 291, 313 third wave 315 threats to 98, 294 and World Bank 234 and WTO 122–3

dependency 17, 130, 135, 138, 151, 183, 223, 228, 269 depression 6, 23, 172, 230, 278, 302, 314

Great 2, 14, 78, 79, 80, 81, 82, 85, 88, 108deregulation 103, 143, 144, 145, 230, 267, 269

financial 93, 133, 134, 158, 270, 275–7 derivatives 133, 158, 160, 275, 276

defined 158 mortgage 167

developing countries remittances 187, 214, 231–2 solidarity 117, 222, 236, 238–9 and TNCs 138–41 trade 115–120 see also debt crisis, development, individual countries,

G20, Third World development

1400–1800 60 19th century 83–4 conflict over 237–9definitions 218–2economic aid 234, 237 external determinants 223 gendered 200, 201, 202, 203, 205, 206–9, 210, 211, 216 internal causation 222 national capitalism 227–9 neoliberalism 229–32 organization of 232–5



346 Index

development (Continued)participatory 253, 255post-1945 99 success and failures 90–1 theories of 222–6trade 105, 109, 115–20 underdevelopment 17 uneven 17, 99, 104, 146, 137 see also Cold War, debt crisis, developing countries,

sustainable development, trade, TNCs, Washington Consensus, World Bank

diamonds 75, 288Diamond, Jared 41 Dickson, Anna 219 digital divide 94, 266–7, 268 disease, 94, 99, 105–171, 161–165, 212, 213, 215, 251, 252,

258, 274, 281and MDGs 210, 218 and new medicines 94 pandemics 296–8 pre-1900 51–2, 53, 54, 55, 57, 58, 74 and security 96–8 and WTO 278see also HIV/AIDS

division of labour 1400–1800 59–60 19th century 83 criticisms of 183–4 defined 180 Fordism 92, 136, 185 gendered 57, 180, 181, 182, 183, 203, 204, 209 global 98, 184, 185, 186–7, 188, 190, 191, 196, 202 global stability 193–6 international 83, 146, 180, 183, 184, 185, 186,

200, 214 liberal theory 181–3 migration 186–7, 211, 238, 259, 312 post-1945 98 racial 35, 40, 51, 53–4, 57, 62, 180–1, 183, 213 Taylorism 185 TNCs 130, 146 see also elites, ILO, slavery

Dobson, Andrew 233 dollarization 156–7 domestic politics 32, 139, 257, 280, 300, 312

see also state–society relations, world order domestic work 213–14drugs

illegal 47, 52, 58, 294medicine 119, 272, 273, 274, 300, 305

see also intellectual property rights, opium Dunning, John 129 Dutch East India Company 59, 66, 68

Earth Summit 231, 250, 257 see also Rio conference

East Asia 110, 122, 134, 143, 170, 187, 204, 214, 222, 233, 269 explanation of success 87, 136, 224–6financial crisis 6–7, 162, 164, 195, 270, 304, 311, 314

Ebola 297Eckersley, Robyn 243 ecological imperialism 52, 53, 62ecologism see environment economic aid 97, 234, 237, 257, 290–1 economic nationalism 12, 19, 84, 88, 129, 159, 222, 263, 268

and the environment 244–5, 247 and security 282, 283 theory 8–12, 14, 15, 17, 20, 30 see also mercantilism

economics behavioural 32environmental 244, 247, 248, 261 feminist 202, 210institutional 23–24, 28 and IPE 2, 11, 13, 14, 21, 22, 23–4, 25, 26, 32, 33, 36, 38Keynesian 14, 23, 24, 25, 86, 92, 97, 229, 236 neoclassical 14, 23, 24, 25, 93, 108, 162, 202, 210, 249,

265, 269see also comparative advantage, Keynes, free trade, liberal-

ism, Washington Consensus Egypt 87, 90, 116, 228, 270

pre-1900 42, 43, 45, 46, 51, 54, 65, 70, 75, 79 Eisenhower, Dwight D. 286 elites 33, 46, 56, 57, 67, 278, 299

developing countries 194, 219, 224, 226, 228, 229, 230, 255, 256

economic 69, 121, 122, 193, 195, 196, 269, 270, 277 European 47, 79, 161, 194globalizing 18, 25, 188 local 77, 83, 85, 288, 291, 303 modernizing 217, 227state 63, 164, 192, 246, 269, 270, 277, 310 US 194see also class, division of labour

emerging markets 167, 219, 222 embedded liberalism see liberalism Emmanuel, Arghiri 107 empire

1500–1800 8, 37, 42–6, 49–57, 60, 61, 62 19th century 74–7, 83British 45, 57–8, 68–74, 80see also decolonization, global governance, imperialism

Enlightenment 66, 84 Enloe, Cynthia 203 environment

1400–1800 60–1 19th century 84



Index 347

definitions 243–4 climate change 256–9environmental studies debates 246–9 global warming 99, 247, 256, 257, 264, 300 green parties 251 international agreements 249–50 IPE debates 16, 18, 20, 28, 34, 244–6 mainstreaming 252–2 ozone layer 243, 250, 264 post-1945 99 sustainable development 253–6 types of problems 243–4 see also ecological imperialism, economics (environmen-

tal), environmental degradation, environmentalism, global environmental change

environmental degradation 99, 107, 123, 202, 238, 241, 242–3, 246–7, 249, 250, 255, 258–61, 288, 289, 316

environmentalism 8, 16, 20, 247, 251, 301 dark green and light green 243 distinguishing features 242–4 ecologism 242, 243, 247 mainstreaming 251–2, 256technocentric and ecocentric 243, 247, 248epistemic communities 264, 263–4

equity 41, 219, 307, 312 advocates 191, 306environmental 19, 248, 255 gender 16, 18, 19, 205, 209, 211

Escobar, Arturo 239 Ethiopia 89, 94, 166, 228, 236

pre-1945 45, 52, 75, 79 Eurocentrism 56, 57, 62, 84eurocurrency market 127, 133, 150, 157–8 Europe

15th–18th centuries 46–55 19th century 67–8, 71–3 Eastern 91, 94, 140, 156, 174, 184, 206, 221, 254, 291 expansionism 51–8, 74–77 interwar and world wars 77–82post 1945 86–8, 91see also individual countries,

European Central Bank 155, 157, 170 European Coal and Steel Community 88European Economic Community 88, 120, 121 European Monetary System 154 European Union (EU) 97, 98, 204

currency and finance issues 154–6, 171, 173, 194 and developing countries 291 global governance 96, 121, 164, 300, 302, 315 origins 88 trade 11, 103, 106, 116, 192, 278and US 111, 120, 122, 257, 260, 264, 292

exchange rate mechanism (ERM) 154–5

exchange rates see international monetary system export-oriented industrialization (EOI) 134, 140, 141, 143,

215, 224, 225, 229 export processing zones (EPZs) 93, 134, 135, 140, 180, 186,

215 see also offshore

factory 67, 88, 143, 144, 185, 187, 188, 189, 215, 216 origins 64–5 work 66, 83, 136

fair trade 313famine 45, 77, 84, 88, 282, 311Fanon, Frantz 90 fascism 78, 81, 87, 263feminism 8, 20, 199, 200

see also gender, women feminization

as devalorization 199 of poverty 210–1

Fifth World 222 finance 154–81

1400–1800 50–2, 53, 6319th century 72–5, 78, 88 deregulation 164, 269, 273–6 innovation 159, 163–7 post-1945 80, 82, 86, 88 regulation 174, 181, 274, 309–11 TNCs 140–1, 144–5 see also credit, financial crisis, gold standard, international

monetary system financial crime, see crimefinancial crisis 98, 151, 159, 260

2008 US credit crisis 14, 18, 93, 96, 109, 126, 127, 133, 144, 165, 166–8, 169, 170, 176, 177, 178, 231, 234, 239, 274–77, 301, 302, 304

Argentina 133, 174 East Asia 6–7, 164European 170–3Greece 194human cost 98, 194, 196, 203, 212, 281 interwar 80–81, 82 Mexico 133, 163, 229, 230 private sector 160tulip 60UK 155, 212 see also Asian financial crisis, debt crisis

Financial Stability Forum 164 First World 86, 92, 141, 283, 286, 287, 301 fish 52, 192 food 183, 192, 288, 292, 298, 303, 310

genetically modified 94, 267 pre-1900 41, 45, 47, 53, 71, 77 security 107, 115, 211, 218, 259–60, 281, 282, 285, 311



348 Index

food (Continued)trade 104, 106, 115, 122see also agriculture, famine

forced labour see labourFord, Henry 136, 185 Fordism 92, 136, 185 see also post-Fordism foreign direct investment (FDI) 92–3, 151, 160, 187, 188,

231, 269 benefits and costs of 138–41 causes 128–31China 92defined 127–8 growth 131–5 organization 135–8and trade 119see also transnational corporations

foreign exchange markets 153, 154see also finance

Fourth World 222 France 181

pre-1900 43, 49, 50, 68, 71, 73 global governance 154, 292, 304 imperialism 52, 75, 76, 87, 90international finance 154, 310 interwar period 78, 80 protectionism 10, 291 TNCs 126, 133

Frank, Andre Gunder 16, 20 free trade 19, 20, 27, 28, 62, 80, 81, 88, 120, 121, 122, 124,

183, 196, 225, 265, 266, 303, 30519th century 68, 71, 82–3 and economic nationalism 8, 9, 10, 282and liberalism 12–4, 25, 103–8, 283see also comparative advantage, liberalism, trade

Frieden, Jeffry 32 futures 133, 158

defined 158

G5 154 G7 146, 164, 165, 184, 304, 313 G8 96, 97, 144, 167, 238, 239, 313 G20 96, 116, 144, 164–5, 167, 176, 234, 238, 239, 302 G24 229 G77 228, 229, 257 game theory 25, 28

prisoner’s dilemma 28–9 gender

1400–1800 57, 60 19th century 83, 88 and critical approaches 17, 19, 21, 22 and development 206, 219, 228, 233, 311 defined 198

devalorization 199 division of labour 180, 181, 182, 183, 184, 203, 204–5 employment trends 205–7 and environment 260gap 200, 204, 205glass ceiling 205 global public policy 205–10, 306 inequality 199, 202, 212, 216 and ILO 209 and IPE 16, 18, 19, 20, 25, 34, 35, 200–1, 202, 203, 204 mainstreaming 207–8, 209MDGs 208, 218Post-1945 98–0 and poverty 210–11 reproductive work 211–4 SDGs 208, 218and security 259, 279 significance 201 structural adjustment 202, 214–216 and trade 108, 115, 204 World Bank 210 see also division of labour, feminism, women

General Agreement on Tariffs and Trade (GATT) 229, 237 Article XIX 110, 111 differences with WTO 96, 114–5 dispute settlement 112, 114 negotiating rounds 97, 112–3, 114 normative framework 112, 113–4 origins 87, 88, 93, 108, 115, 120 special and differential treatment 119

General Agreement on Trade in Services (GATS) 102, 103, 114, 116, 118

genetically modified crops 94,Germany 49, 69, 122, 181, 257

Cold War 86, 87, 89 euro 154–5 European monetary system 154global governance 290, 292, 304, 310 Greece 172, 173industrialization, 64, 68, 73 imperialism 52, 75, 76 interwar period and world wars 73, 78–81 protectionism 8, 63, 71, 106, 282 TNCs 126, 141

Gertzl, Cherry 218 Gill, Stephen 1, 17, 304 Gilpin, Robert 1, 9, 20global civil society 305–6

see also civic associations Global Compact 31, 193, 307, 308 global commodity chains

see global supply chains 137, 138, 146, 147, 192, 304global corporations see transnational corporations



Index 349

global environmental change 241–61 see also environment

global financial system 148–78 see also finance

global governance BRICS 307–10 civic associations 305–6 corporations 97, 305–7defined 299 and democracy and regulation 100, 313–6 and development and growth 310–11 developing states 235and equality and justice 311–3 and environment 241, 248 expertise 263–4, 304 governance levels 302–3 and international organizations 304 large-scale change 301–21 morality 304 regimes 303–4 and states 300–1 see also regimes, Global Compact

global political economy use of the term 23 see also international political economy

Global South 222 see also Third World, developing countries

global supply chains 137, 138, 146, 147, 192, 304global value chains 138globalization

defined 26 impact on IPE research 2–3 project 93, 225 views of 8, 9, 11, 13, 17

gold exchange system 149 gold standard 93, 105, 155

19th century 61–3, 68–70 interwar period 78, 79, 80–1, 88, 100, 149

governance 233, 234, 258, 284, 289, 291, 2981400–1800 61–2 19th century 85 good 231, 236, 271, 293, 311 post-1945 99see also global governance, states

greed 24, 52, 60, 85Grieco, Joseph 32 Grameen Bank 165 Gramsci, Antonio 19, 20

see also neo-Gramscian approaches Greece 154

financial crisis 150, 170, 171–3, 194, 277 Gresham, Thomas 48

Gresham’s law 48

gross national product (GNP) 106, 162, 163, 219–20, 224, 255 growth

and development 222–6 in India and China 188–90and industrial revolution 65–8 in trade 113, 115limits to 45and protectionism 12, 108–112of TNCs 127–31 women’s contributions 203 see also austerity, development

Guinea 116, 228, 236, 259, 297

Haas, Peter 250, 278 Hamilton, Alexander 8, 20, 282, 298 Hanseatic League 49, 50, 57 harmony of interest 13

critique of 16, 78Hayek, Friedrich 13, 20health 196, 307, 311

and development 89, 162, 168, 169, 185, 188, 219, 221, 233, 235, 236

and environment 243, 250, 251, 252, 254, 255, 258, 259 and indigenous people 51–2MDGs 31, 218products 128, 267public good 23 and safety 10, 110, 193 and security 281, 282, 291, 294, 296–8 standards 111, 204 and trade 10, 14, 103, 111, 118, 119, 121, 273–4 and tax avoidance 173and TNCs 138, 145, 190women’s 199, 200, 204, 207, 209, 211, 212, 215 see also disease, World Health Organization

Heavily Indebted Poor Countries (HIPC) Initiative 162, 236 Heckscher-Ohlin theorem 105 hedge funds 159, 164, 166, 167, 174, 259, 275 hegemony 20, 62

after 14, 15 British 63, 68–74 counter 241neo-Gramscian view 18, 19, 20, 265, 278US 11, 31, 91, 131, 194, 235

hegemonic stability theory 9, 82 historical materialism 19

see also Marxism HIV/AIDS

and debt 161–2 and development 218and gender 208 and property rights 119, 272–4 and security 296, 297



350 Index

Hobson, John 76 Hobson John M. 40, 62, 67 Hong Kong 90, 118, 164, 186, 188, 189, 214, 224, 225, 226,

303 homework 209 hormone-treated beef 111, 122, 264, 302 Human Development Index (HDI) 220–1, 309 Human Development Report 220, 240, 281, 298, 313 human rights 26, 31, 82, 108, 193, 207, 282, 287, 292, 293,

295, 300, 306, 308 women’s 208–9

human security see securityHymer, Stephen 129 Hurrell, Andrew 241

ideas 16, 30, 37, 105, 107, 180, 205, 207, 221, 227, 232, 249, 261, 262–78, 303

1400–1800 61 19th century 84 defined 262–3 post-1945 88, 99 theories about 31, 263–6see also economic nationalism, liberalism, intellectual

property rights, technology, Washington Consensus ideology 24, 63, 73, 228, 229, 286

defined 66, 263 gender 215 liberal 66, 83, 84, 143, 183, 269, 312 Marxist views 16, 17 racist 84

Ikenberry, G. John 32imperialism 36, 71, 73

1400–1800 51–62 19th century 74–7, 79, 83, 84, 262, 308 ecological imperialism/ eco-imperialism 52, 53 theories of 17, 18, 25, 70, 76, 129, 283

import substitution industrialization (ISI) 130, 143, 162, 225–6, 228, 229

India 1400–1800 42, 43, 44–5, 47, 52, 53, 56, 60, 61and British imperialism 57–8, 62, 74, 77, 84, 90,

183–4 development 91, 92, 99, 110, 112, 131, 221, 251and environment 254, 257, 260and global division of labour 98, 179, 181, 183, 187,

189–90 global governance 90, 91, 116, 164, 191, 228, 304, 308,

310technology industry 98, 180, 267, 273, 274, 209 textile industry 64, 65, 183–4 TNCs 131, 137, 138, 145, 251 trade 116, 120, 192, 196see also BRICS

indigenousknowledge 274, 277 people 51–2, 54, 55, 59, 65, 75, 260

individuals 7, 18, 48, 53, 55, 77, 83, 89, 93, 129, 156, 157, 158, 165, 167, 172, 174, 175, 176, 177, 179, 181, 182, 219, 226, 239, 254, 272, 273, 276, 277, 300

in economics and rational choice 23–4, 27–8, 31, 38 and liberal theory 12–13, 20, 67, 71, 185–6, 299 and security 95, 280, 282, 287, 296, 297, 298

Indonesia pre-1900 43, 52, 57, 60, 75 Asian financial crisis 6, 7, 164, 195development 90, 91, 92, 181, 189, 192, 224, 225, 231global governance 90, 164, 228, 304 human rights 295trade 117, 120

Industrial Revolution described 64–6 explanations of British origins 66–7 international dimensions 65 outside Britain 87–8power from 83–4

inequality 35, 270 critics of 18, 33, 269, 309 and development 82, 92, 216, 218, 219, 238,

239, 270 and division of labour 186, 188, 190and finance 151, 178 gender 35, 181, 184, 199–200, 203, 205, 207, 209, 201–11,

216and global governance 301, 309, 311–3runaway 196see also digital divide, poverty

infant industry protection 10, 92, 106–7, 141, 225 inflation

and derivatives 1581970s 25, 88, 153–4, 160, 185 debasement and devaluation 48, 69, 156 hyperinflation 156 and interest rates 160 and housing 167interwar 79, 80, 81 low 92, 152, 155, 224, 266 political issue 30, 37, 284 risk of 223 information revolution 84, 93–95, 262, 266–8,

271, 288 institutional investors 165, 170 institutionalism 28–30, 36 liberal 15 insurance 158, 164, 166, 185, 189, 275, 292, 305 intellectual property rights 113, 114, 118, 120, 124,

272–3, 305



Index 351

see also Trade-Related Intellectual Property Rights (TRIPS)

interdependence 22, 34, 143, 245, 253, 296, 308complex 15 in liberalism 12, 13, 14, 16, 20, 247, 284–5

interest rates 70, 133, 156, 157, 159, 162, 164, 168, 225and debt crisis 160–1 and domestic monetary policy 151–2, 269and financial crisis 134, 155, 165 and inflation 153and US dollar 154, 168–9

International Bank for Reconstruction and Development (IBRD) 149, 232, 233

see also World Bank International Confederation of Free Trade Unions 191,

192, 193 international economic organizations 95–6, 227, 315–6

see also particular organizationsinternational environmental agreements 249–50 international labour movement 191

labour unions 121, 189, 192 International Labour Organization (ILO) 19

core labour rights 192and development 228EPZ study 135 and Global Compact 308 global governance 265–6, 304 origins 193–4and women 209

international organizations, 286, 288critical views 19and democracy 123 and development 217, 224, 227, 229, 232, 239 and environment 241, 245, 246, 252, 253, 258, 265, 302,

307 and gender 199, 201, 205–10 and global governance 78, 88, 95–7, 99–100, 165, 193,

291, 301, 315 and ideas 265–6, 268and liberalism 14, 15, 25 see also particular organizations

International Monetary Fund (IMF) 114, 286 2008 global credit crisis 167Argentina 174 Asian financial crisis 6–7, 164 debt crisis 96, 161 debt relief 162, 236 and gender 210global governance 100, 164–5, 167–8, 229, 234, 235, 237,

303–4, 309, 314, 316 Greece 172–3, 194, 277 influence 303–4 and liberalism 14

Mexico 163, 230 opposition to 18, 97, 161, 195origins 87, 88, 149, 150, 301 and structural adjustment 97, 150, 183, 233, 239,

269–70, 297see also debt relief, Washington Consensus

international monetary system 48, 178 defined 148–9 fixed to floating 25, 153–7 gold standard 68–70interwar era 80key elements 68–9 post-1945 87, 149–50, 154, 155 regional currencies 154–7 relationship to capital mobility 157–9, 165 see also balance of payments, dollarization, euro, Bretton

Woods international political economy

American and British 35field of study 22–6methodological issues 26–31 theories 6–21 trends 32–6see also global political economy, methodology

International Relations 25 International Trade Organization 108, 112 International Trade Union Confederation 191, 306 International Women’s Year 206 internationalism

democratic 306 financial community 82worker 194, 195

internet 94, 315 control over 95crime 293, 294statistics 268

interwar period 78economic failure 79–82 lessons 87 popular mobilization 81–2 security failure 79US role 82

Iran 87, 160, 228, 292 Iraq 42, 87, 95, 160, 169, 228, 290, 293, 307 ISIS 290Islam 42, 43, 44, 45, 51, 87, 290 Italy 73, 126, 154, 182

1400–1600 47, 49, 50 financial crisis 171, 173 global governance 154, 304 imperialism 52, 75, 76interwar 78, 79, 81 see also Venice



352 Index

Japan 34, 93, 99, 160, 175, 181, 188, 190, 212, 254, 273Cold War 86, 87, 88 economic model 29, 70, 91, 185, 189, 283 global governance 96, 304, 307, 310 imperialism 75, 77, 84IMS 153, 154Industrial Revolution 64, 68protectionism 8 Second World War 79, 90TNCs 125, 126, 127, 131, 136, 141, 185trade 120, 121, 122

Jubilee Debt Campaign 235, 313 just in time production 136, 185

Kabeer, Naila 205 Kaldor, Mary 282, 287 Kant, Immanuel 14, 20, 285 Keohane, Robert 1, 15, 20, 21 Keynes, John Maynard 13, 20, 81 Keynesian policies 13, 23, 24, 81, 88, 92, 98, 99, 227, 266 Keynesianism state 37, 87 Kindleberger, Charles 80, 85 Kingsbury, Benedict 241 Kirchner, Cristina 142Klein, Naomi 145 knowledge 51, 184, 226, 265

defined 263 diffusion 26, 105, 271–2, 273 economy 266–7 and environment 249, 250–1and global governance 275, 306 importance 2, 40, 263–4indigenous 277and Industrial Revolution 66, 67 in IPE 34, 36 local 119, 137and production 185in social sciences 22–3, 31 structure 11, 61, 84, 129, 262, 277, 278TNCs, 119, 140, 141, 148 see also epistemic communities, ideas, information revolu-

tion, technology Krasner, Stephen 9, 20 Kuznets curve 219 Kyoto Protocol 84, 99, 245, 256, 257, 311

labour 17, 921400–1800 53–4, 55, 57, 58–919th century 64, 65, 66, 67, 68, 74, 81, 83, 84 child 192, 193 forced 192, 194informal 306 mobility 156

organized 29, 30, 98, 177, 185, 193, 194, 195, 306post-1945 103 rights 108, 121, 191–3 standards 18, 113, 123, 189, 191–3, 195, 304, 313 see also division of labour, migration, peasants, slavery,

trade unions, work land grabbing, see transnational land acquisitions Landes, David 13, 40, 62, 66, 85 Latin America 177, 194, 315

compared with East Asia 195, 225–6, 227–8 debt 161 development 204, 219, 223, 229, 232, 233, 238, 269 dollarization 156 environment 255 history 53, 59, 60, 74, 75, 78, 183industrialization 92, 112 remittances 187 trade 122, 165and US 58

law 24, 26, 44, 62, 131, 156, 184, 215, 249, 276, 282, 300of capital 18 and cooperation 26Corn Laws 71customary 50English 57international 78, 82, 96, 315of nature 24Poor Law 66property 260rule of 89, 233, 271sources 44, 49tax 173, 174, 176trade 97, 111, 114, 119, 266universal 20US 158, 189, 266

Law, David 1, 304 League of Nations 78, 79, 82, 87, 95, 292, 301 legitimacy see democracy Lenin, V. I. 18, 20, 70, 76, 129, 283 Leopold II of Belgium 73, 74, 85Liberia 184, 228, 236, 297liberalism 84, 93, 194, 200

19th century 51, 66, 71 absolute gains 12 actors 13as a cobweb 16 conflict and cooperation 13–4 division of labour dynamics 14 embedded 31, 88, 98, 100, 112, 266, 268, 271 environment 247 institutionalism 15 neo- 138, 211, 229–32, 266, 269 and peace 284–5



Index 353

politics 37, 67 today 14–16view of Asian financial crisis 6–7 see also division of labour, interdependence, free trade,

Washington Consensus leisure 34, 35, 181, 199, 267 limits to growth 45, 248 Limits to Growth 250, 255 List, Fredrick 8, 20, 68, 282, 298London 46, 64, 167, 289 financial centre 69, 157, 158, 177, 303 London School of Economics 11Long Term Capital Management 160

McDonald’s 137 McMichael, Philip 93, 162, 195, 197, 226, 259mafia 11, 29, 287, 306 malaria 51, 54, 56, 218, 274, 296, 310 Malaysia 43, 120, 121, 181, 228, 288

capital controls 152, 164 economic success 224, 225 labour conditions 192, 212, 215trade 117TNCs 27, 135, 215, 305, 216, 217

malnutrition 162, 199, 258, 281 see also famine

market 55, 137, 303, 304, 314access 113, 117, 126, 128, 237and states 11, 21, 23, 32, 50, 62, 107, 200, 222, 224, 226carbon 258commodity 237common 88, 122consumer 136creating 65, 67, 110, 118danger of 10, 63, 78, 81, 85 discipline 8, 70, 71domestic 64 emerging 219, 222, 231, 260exploitation 18 failure 15, 16, 18, 81, 163, 165, 246, 247, 271financial 6, 29, 47, 60, 68, 83, 91, 94, 98, 127, 144,

150–60, 170, 171, 173, 174, 177, 274–7, 315forces 88, 180, 182, 219, 269 free 14, 17, 24, 77, 81, 88, 229, 118, 232, 286 fundamentalism 166generating wealth 13, 14, 24, 71, 117, 136–7 housing 166–7importance 13, 20, 23, 59, 270, 284international 71, 73, 76, 103, 106, 109, 119, 168, 169, 231,

272, 288incentives 248labour 63, 81, 139, 184, 186, 199, 203–5, 225, 267 origins 9, 24, 37, 83

open 7, 28, 58, 80, 112, 124, 283 power 66, 85, 92, 191, 193size 12, 104, 182–3, 300 and TNCs 129–34, 141, 143and World Bank 234see also protectionism

Marshall Plan 87, 88, 149, 150, 283 Martin, Lisa 32, 124 Marx, Karl 16, 17, 19, 20, 24, 33, 298Marxism 24, 30, 51, 67

actors 17 conflict 14, 18, 283 dynamics 17 and the environment 246, 247, 249 and finance 151and gender 200 imperialism 76 origins 16 and TNCs 129and trade 107 see also communism, critical theory, dependency, Lenin,

neo-Gramscian approaches masculinity 198–9, 200, 202, 203, 215, 216Médecins San Frontièrs 297Meadows, Dennis and Donella 250 Mediterranean 42, 43, 45, 46, 54mercantilism 8, 20, 37, 105

see also economic nationalism MERCOSUR 97, 98, 122methodology 15, 26–31, 32, 268Mexico 93, 196, 258, 303, 307

pre 1800 45–6, 51, 53, 62 City 206, 208debt crisis 161–2, 269 financial crisis 163, 164, 270, 311global governance 164, 310 industrialization 134, 186, 187, 189, 225 structural adjustment 230trade 121

Middle East 109, 135, 163, 170, 290 pre-1900 42–3, 44, 45, 47, 52 Arab Spring 95 development 232, 233gender 203, 204, 213, 214oil 128 remittances 187

Mies, Maria 200 migration 41, 62, 71, 186–7, 211, 238, 259, 312

to the Americas 51, 53, 68within China 188

military industrial complex 285–6 Millennium Development Goals (MDGs) 31, 208, 209, 218,

268, 310



354 Index

Mill, John Stuart 67Ming Dynasty 43–4modernization 217, 284, 300

theory 222–3 monetary autonomy 152, 155 money

debasement 48 origins 47–8 regional currencies 154–5 reserve currency 168–70 utility 48 see also international monetary system

Mongols 42, 43, 50 most favoured nation (MFN) 112, 122 Multifibre Agreement 113, 118Multilateral Agreement on Investment 119, 146, 191, 307 multilateralism 88, 96, 112, 120, 287, 316 multinational corporations see transnational corporations Myrdal, Gunnar 227

nationalism see economic nationalism NATO 87, 88, 286, 301 naval power 43, 44, 57, 61, 67, 73, 183, 283 Nazis 80, 81, 89 neo-Gramscian approaches 16, 17, 19, 265, 278 neoliberalism see liberalism New International Economic Order (NIEO) 17, 19, 90, 138,

229, 230, 237–8new wars 287 New York 19, 58, 69, 157, 174, 180, 270, 289, 303, 309 newly industrializing countries 110, 164, 186, 194, 195, 224,

225, 226, 239, 270nineteenth century 63–85

compared with 21st 61, 64, 67, 71, 83 Non-Aligned Movement 90, 228 non-discrimination 111, 112 non-tariff barriers (NTBs) 97, 103, 110, 111, 112, 113, 117North American Free Trade Agreement (NAFTA) 97, 98,

100, 121, 122, 162, 163, 191, 194, 195, 196, 265, 302 nongovernmental organizations (NGOs) 20, 21, 144, 190,

196, 199, 208, 213, 215, 272, 297 and development 165, 172, 193, 274, 230, 232–3 and environment 240, 241, 245, 246, 250 global governance 97, 206, 306, 311, 316 and WTO 122, 123, 129, 130 see also civic associations

North–South conflict 22, 142, 235, 237–9, 255, 257, 258, 311, 313

Nye, Joseph 15, 20

Obama, Barack 124, 235, 284, 300 Occupy movement 270 official development assistance

see economic aid

offshore 93, 176, 307 see also export processing zones

Ohlin, Bertil 105 oil 15, 91, 92, 93, 155, 288, 292, 295, 300

crisis 25, 88, 110, 158, 160, 161, 222, 223, 227, 229, 260, 264

environment 184, 249, 252 finance 159, 168 TNCs 127, 128, 142

opium 57, 58wars 73, 84

Organisation for Economic Co-operation and Development (OECD) 106, 110, 119, 137, 146, 150, 175, 176, 191

and global governance 97, 164, 304 Organisation for European Economic Co-operation 150Organization of Petroleum Exporting Countries

(OPEC) 158, 160 outsourcing 132, 136, 137, 138, 189–90, 215 ownership location investment model 129

Palan, Ronen 21, 184, 197 pandemic 296–8

see also disease patents see intellectual property rights patriarchy 37, 183, 200, 216

see also gender Paulson, Henry 275Pax Britannica 68–74

balance of power 71–3 free trade 71 gold standard 69–70 inaccuracy of term 73 see also imperialism, Industrial Revolution

peace 84, 88 and environment 259and gender 206, 207, 209international relations 25, 96, 99, 149, 280, 287, 291, 292,

297, 298, 306interwar 78–9, 301and labour 193–4 and liberalism 14, 25, 70, 282, 284–5see also Pax Britannica, security

peacekeeping 96, 188, 196, 287peasants 107, 188, 196 Penrose, Edith 127 pensions 165, 172, 187, 194, 276 Peoples’ Global Action (PGA) 196 personal services 212 pharmaceuticals 119, 273, 305 Philippines 117, 161, 189, 196, 212, 224, 228, 274

and imperialism 52, 53, 75, 90migrant workers 181, 187

Phillips, Nicola 34, 38 Polanyi, Karl 19, 70, 80, 85, 304



Index 355

political economy 24political science 24Poor Law reform 66 Porter, Tony 178, 316 Portugal 154, 219

pre-1900 43, 51, 52, 53, 54, 75, 76 financial crisis 171, 173

positive-sum game 12, 14, 20, 104 postcolonial 25, 219, 291post-Fordism 136 poststructuralism 8, 32, 265 poverty 186, 222, 289

absolute 239anti-poverty movement 235, 314, 315 causes 17, 30, 40–1, 223, 230, 270, 281and environmental degradation 99, 251, 253, 254, 258,

259extreme 208, 218 and famine 77 and financial crisis 7 gendered 199, 201, 202, 205, 208, 210–11, 212, 216 and global governance 310, 312 reduction 89, 121, 138, 159, 167, 187, 190, 219, 224, 227,

229, 231, 233, 236, 291 and TNCs 146 and violence 55, 55, 87, 99, 192, 294 see also economic development, growth, inequality

power 35 capital 17, 19corporate 16, 247class 16economic nationalism 8–12, 15and feminism 60, 199, 200, 201, 202, 208, 214 and liberalism 29

political science 22, 24politics 8, 11, 15, 20, 25, 78, 190, 282

state 6, 7, 8, 9, 31, 32, 43, 44, 49–50, 51, 52, 105, 170, 178, 191, 301, 305

structural 7, 11, 141, 177, 178, 304 see also hegemony, industrial revolution, imperialism

Prebisch, Raul 228 private authority 305, 316 privatization 143, 162, 211, 230, 267, 269, 312, 315 product life cycle model 129 production 125–47

1400–1800 59 19th century 83benefits 138–42 globalization 131–4 post-1945 98 see also division of labour, Industrial Revolutiontransnational corporations

prostitution see sex trade protectionism 192, 226, 308

agricultural 111, 113 costs of 12, 105–6 defined 103 economic nationalism 10 explanations for 27–8, 105–8, 123–4forms of 108 new 110–111, 113 persistence 114, 124 TNCs 128 US 154, 266see also economic nationalism, Multifibre Agreement

public goods 23, 28 public policy 24, 27, 76, 143, 186, 286

and gender 205–10

quotas 74, 103, 111, 112, 117, 118

race 18, 34, 35, 36, 84, 179, 181, 191, 212racism 55, 76, 84 Radice, Hugo 127 railways 49, 63, 65, 68, 83, 127 Rajoy, Mariano 142 rational choice 15, 27–8, 30 rationalist approaches 31, 35, 202, 264 Reader, Melvin 219 Reagan, Ronald 154, 269 realism 8, 10, 20, 25, 78, 200

see also economic nationalism recession 166, 309

1970s 88, 110, 227, 229 1980s 161 2008 108, 127, 166, 167, 274 government role 23–24, 80Greece 194and IMF 314and interest rates 152interwar 80, 85 Japan 160and trade 31, 109 UK 155

reciprocity 83, 111, 112, 226 Redclift, Michael 246 regional currencies see money regionalism 33, 120–1 regimes

anti-democratic 71 criticism of 11defined 303 development assistance 239 environment 263, 264 financial 93 global governance 33, 88, 96, 302–3, 316 in IPE 15, 21, 31and order 14, 245



356 Index

regimes (Continued)private 305 production 146trade 9, 12, 96, 105, 112, 115, 123, 303, 307welfare 30

regulation of capital 92democracy 271, 313–6 deregulation 9, 93, 103, 133, 143, 144, 148, 230, 267, 268,

269–70, 274–5, 277 environmental 18, 97, 247, 248, 252 financial 158, 159, 162, 166, 167, 168, 178, 276, 302, 311 labour 92, 191–3 national 33, 134, 144, 184, 301, 307self 14, 306TNCs 92, 126, 138, 140, 145–6, 308 trade 103, 111, 114, 115, 119, 120, 124 see also global governance, labour standards,

offshore, regimes religions 84, 436

see also Christianity, Islam remittances 187, 213, 214, 231, 232, 288 Reno, Janet 214 reproductive economy 211–14 research and development see technology Rhodes, Cecil 75 Ricardo, David 12, 20, 24, 33, 71, 104, 183 Rio conference 231, 241, 250, 257, 308

Rio+20 218 rise of the West 16, 40, 62 Robinson, Ronald 77 Roosevelt, F. D. R. 81 Rostow, W. W. 222 rubber 52, 73, 74, 288 Rubin, Robert 275 Ruggie, John 2, 31, 38, 88, 100, 112 Runyan, A. 198, 211, 216 Rupert, Mark 194, 265 Russia 18, 31, 89, 126

pre-1917 50, 69, 71, 73, 75 post 1989 89, 91, 92, 96, 159, 160, 170, 214, 221, 257,

293, 309global governance 164, 308, 309, 310imperialism 75 Industrial Revolution 6 revolution 76, 81, 89, 192, 193, 283 war with Japan 68see also BRICS, Soviet Union

sanctions 79, 96, 107, 111, 290–3, 303 Sauvy, Alfred 221 Scholte, Jan Aart 26 science 24, 84, 257, 263, 264, 266, 273, 302, 306

see also knowledge Second World 86, 92, 97 Second World War 14, 37, 50, 64, 68, 77, 78, 79, 82, 86, 87,

88, 90, 96, 108, 112, 124, 127, 131, 134, 148, 149, 150 security

1400–1800 61 19th century 84, 71–7 Cold War 86–8, 285–6 critical 281 definitions 279–82 dilemma 280, 286 economic statecraft 290–2 food 107, 115, 211, 218, 260, 281, 282 human 34, 202, 259, 281–2, 293, 294, 296, 298, 306 interwar 77–9 national 107, 280, 283, 284, 285, 286, 287, 293–4, 295,

296, 300 and political economy 282–5 post-Cold War 96, 101, 286–90, 293, 296 see also crime, disease

Seers, Dudley 219 Sen, Amartya 240, 311 sex 202

abuse 215, 235, 294 different from gender 198 work 99, 205, 212–3, 307

shrimp 192Sierra Leone 117, 220, 228, 236, 288, 297silver 47, 52, 54, 55, 58, 60, 62, 553 Singapore 120, 121, 137, 160, 228, 297, 303

development 90, 127, 135, 140, 141, 143, 146, 147, 148 159, 186, 188, 221, 224, 225, 226, 227

Sklair, Leslie 186 slavery 2, 41, 59, 180, 181, 213, 263

of Africans 54–5 consequences 55

Smith, Adam 12, 20, 22, 24, 33, 66, 104, 181–3, 185, 197, 282–3, 298

smoking 26, 261 social forces 17, 18, 19, 80, 124, 278

see also elites, labour, peasants social movements 18, 20, 123, 195, 263, 306, 303 social science 1, 22–3, 26, 32, 33, 35, 129, 200, 212, 216, 218,

253, 265South Africa 87, 156, 209, 258

development 92, 93, 161, 175, 260 global governance 91, 116, 117, 164, 221, 228, 235, 257,

300–1, 308, 309, 310 patent dispute 305 racial divisions 40, 179, 181

South Korea 126, 190, 260financial crisis 6, 134, 141, 164, 195, 224, 304 industrialization 87, 90, 93, 141, 186, 189, 270



Index 357

sovereignty 10, 34, 176, 227, 280, 287, 291 early states 49, 57 global governance 315 selling 184 TNCs 119, 127, 139, 145, 146

Soviet Union 76, 301, 306and Cold War 87–8, 96, 134, 150, 158, 280, 285–6, 291 demise 18, 89, 269, 287, 298, 303

Spain 154, 219pre-1900 50, 51, 52, 53, 54, 75, 96 financial crisis 171, 173, 179 TNCs 142

special and differential treatment 115, 119–20 speculation 7, 60, 155, 165, 171, 276 Spero, Joan 1 spices 43, 47, 52, 59 state

authoritarian 87, 89, 92–3, 123, 193, 195, 226, 285, 291, 300, 309

communist 81, 89, 91, 93, 109, 140, 150, 188, 229, 231, 254, 291, 293

‘competition’ 92, 144, 300 defined 49 developmental 37, 92, 224, 225, 226, 269, 271 fascist 79, 81, 87 and global governance 302–5 liberal 66–7, 81, 84, 85, 98, 192 national capitalism 227–9 neoliberalism 229–32 origins 49–51 transformation 91–3 welfare 78, 91, 195, 300, 301, 307 see also embedded liberalism, Keynesianism, neoliberal-

ism, offshore, security, Washington Consensus state–firm relations 11, 142–6, 191, 305state–society relations 37, 67, 69, 83, 96, 107, 122, 123, 145,

146, 183, 193, 194, 199, 201, 207, 216, 222–3, 234, 266–8, 305–6

see also embedded liberalism, neoliberalism, social forces, world order

statism see economic nationalism Steans, Jill 198 Stiglitz, Joseph 314 stock market 29, 47, 91, 94, 127, 133, 158, 163, 165, 166, 167,

270, 275, 314Stopford, John 305 Strange, Susan 1, 11, 20, 21, 36, 129, 162, 178, 262, 305 strategic trade theory 68, 107structural adjustment programmes (SAPS) 91, 143, 151,

195 content 150, 183, 269 gendered impact 202, 211, 212 impact 233, 270, 297

Mexico 229, 230 resistance to 235 see also Washington Consensus

structure and agency debate 36–7, 165subsidy 103, 106, 108, 111, 115, 117, 118, 131, 161,

211, 302 sugar 40, 47, 52, 54, 55, 57, 60, 183 sustainable development 150, 231, 233, 241, 243, 246, 247,

248, 250, 252, 253–6, 257, 258, 310 defined 231

Sustainable Development Goals (SDGs) 208, 218sweatshops 154, 180, 193Sweezy, Paul 25

Taiwan 75, 164, 170, 188 companies 118, 189, 190development 87, 90, 141, 186, 224, 270

tariffs 10, 27, 31, 106, 110, 124, 162, 225 defined 103 historic 68, 82 reductions within GATT 97, 112–113, 114, 117

Taylor, Fredrick 185 Taylor, Ian 34 Taylorism 185 tax 53, 57, 67, 103, 140, 145, 150, 153, 162, 171, 185, 269,

287, 288abuse 173–6, 94 currency 7 cuts 154, 168, 169 havens 93, 184 payers 14, 276TNCs 130, 134, 139, 140, 144, 145–6 Tobin, 165

technology 74, 106, 196, 266, 275, 283, 293, 295, 315, 316 bubble 94, 166 change 66, 94, 103, 132, 137, 145, 186, 266, 267,

293, 312Chinese 43, 44defence 10defined 262and development 94, 225diffusion 94, 271–2, 273European 51, 66–7, 84 environment 244, 248 gap 26, 267–8 military 61, 89, 286 TNCs 13, 127, 129, 130, 131, 132–3, 135, 136, 140, 141,

143, 190 see also Industrial Revolution, information revolution,

knowledge, naval power terror 105, 302, 303

nuclear 97 rubber 74, 85



358 Index

terrorism 199, 282, 292, 293, 296, 306, 307Middle Eastern 289–90nuclear 97rubber 74, 81

textiles 105, 180, 186pre-1900 47, 53, 54, 55, 64, 68, 183–4 and development 110, 185and gender 135 protectionism 113, 189

Thailand pre-1900 57 development 225, 228financial crisis 6, 161, 164 labour conditions 192sex trade 212 trade 117, 120

theory contemporary GPE 32–6 explanation for diversity 19 methods 26–31 purpose 7, 19 traditional IPE 8–21

Tilly, Charles 50 Third World

coalition 238–9 and Cold War 89–90 and FDI 134, 138–43use of term 86, 222–3 see also developing countries, development

Thomas, Caroline 219, 312Thomas, George 97 Touré, Samori 75 trade

1400–1800 59 19th-century free trade 71, 82–3 barriers 8, 28, 82, 113, 124, 132 defined 102 developing countries 115–20 environmental degradation 248 free 71, 104–8 gains from 9, 105–6, 108, 192 growth of 108–12 institutional arrangements 112–5 intra-Asian 52intra-firm 105, 109, 110 intra-industry 105, 109, 110 post-1945 97–8 regional agreements 120–2terms of 228, 238 see also comparative advantage, protectionism, WTO

Trade-Related Intellectual Property Rights (TRIPS) 114, 115, 116, 118, 119, 272–3, 274

see also intellectual property rights Trade-Related Investment Measures (TRIMS) 114, 119

trade unions 65, 67, 93, 188, 190, 196, 209, 215, 267 Trans - Atlantic Trade and Investment Partnership (TTIP)

120Trans - Pacific Partnership Agreement (TPP) 120, 121, 122transnational class 16, 25 transnational corporations (TNCs)

communication 132–3 costs and benefits 9, 13, 14, 17, 20, 130–1, 138–42 defined 127–8 finance 133 Fordism 136 and gender 215–6global governance 305 globalization of 131–5 global supply chain 137–8growth theories 128–31importance 98, 125, 160, 186labour 187, 189 largest 126 mergers 136–7 organizational principles 135–8 power 9regulating 133–4, 142–6, 188, 192, 273 self-regulation 97, 123, 193 and trade 110, 118see also corporations, division of labour, state–firm

r elations transnational land acquisitions 259–60transnational networks 43, 45, 57, 88, 95, 97, 131, 132, 136,

195, 205, 245, 289, 293, 306 see also civil society, nongovernmental organizations

transparency 7, 95, 111, 112, 121, 122, 165, 175, 176, 236, 271, 284, 306, 316

transportation 45, 46, 55, 67, 129, 186, 212, 233, 238, 303, 311

triangular trade 54–6, 183 Triffin dilemma 149, 153 Triffin, Robert 149Trilateral Commission 253 Truman, Harry S. 112, 239 tulip mania 60

underdevelopment 17, 222–3, 227–8, 282, 294 unemployment 30, 91, 92, 152, 178, 185, 195, 230, 265

pre-1900 70 1970s 25, 110, 145 2008–12 163, 173, 194, 231 female 203 interwar 79, 80, 81

United Kingdom 92, 259, 284, 294, 314 gender 182, 212, 213, 214 global governance 154, 257, 292, 304, 310 finance 152, 155, 158, 165, 167, 176, 270 post-1945 order 88



Index 359

study of IPE 11, 35 TNCs 126, 143, 144 trade 64, 113, 120 see also Britain, imperialism

United Nations 31, 95–6 General Assembly 31, 90, 206, 207, 208, 209, 237, 297 Millennium Declaration 210, 218, 310 Security Council 96, 259, 288, 297 see also Global Compact, individual agencies

United Nations Children’s Fund 96, 304United Nations Conference on Environment and

Development 241, 250, 252United Nations Conference on the Human Environment

250United Nations Conference on Trade and Development 90,

228, 237, 267, 268, 272United Nations Development Programme 220–1, 240, 281,

282, 298 United Nations High Commissioner for Refugees 96United Nations Labour Rights Convention 192United States

post-1945 economic order 88 1980s debt crisis 134–4 and Argentina 174 and Asian financial crisis 7, 164 bonds 171 and China 12, 163, 169, 170, 177, 188–9, 177, 191, 193,

258, 259 civil war 68, 73, 83 and Cold War 86–8, 89, 96, 99, 280, 285–6 consumption 92, 254 and Cuba 191

and decolonization 90defence spending 8, 95, 149, 286 dollar 149, 153–4, 156, 157, 168–70 drug trade 58, 307 environmentalism 251, 280Federal Reserve 153, 154, 160, 166, 167, 169, 275 financial crisis 160, 161, 163, 164, 165, 166–8, 173, 117–8,

274–7 financial deregulation 152, 158 gender issues 180, 210, 212, 213, 214global governance 96, 150, 234, 235, 268, 269–71, 300,

301, 302, 304, 305, 307, 308, 309, 310, 314 hegemony 19, 25, 26, 31, 91, 265 immigration 67, 180, 188, 189, 191, 192 imperialism 17, 54, 65, 74–5, 259–60 and IMS 153–4 and India 190industrialization 65, 66, 67–8, 70, 83, 186 inequality 196interwar period 14, 77, 78, 80, 81, 82 IPE 11, 15, 27, 30, 32, 34, 35, 38, 265 IPR 118, 273–4

isolationism 82 and ITO 112 knowledge advantage 273 and Kyoto 245, 257 labour 192, 193, 194–5 and Latin America 229, 238Marshall Plan 150 model 91 protectionism 8, 10, 63, 71, 106 racial issues 40, 264 security 95, 280, 282, 283, 284, 285–90, 291, 292, 293–5 slavery 59, 63, 173, 183 tax issues 175–6TNCs 125, 126, 129, 131, 133, 134, 141, 142, 144, 148,

150, 152, 196, 265, 270, 301, 309trade 111, 112, 113, 116, 121, 122, 124, 264, 266 Treasury 7, 8, 167, 170, 171, 269, 275, 173, 177, 268, 274 see also Washington Consensus

UN Women 209 Uruguay Round 102, 113, 114, 116, 117, 118

Venice 46, 47, 50, 57 Vernon, Raymond 127, 129 Vietnam 52, 74, 81, 87, 88, 89, 90, 121, 189, 192, 195, 212,

228, 283, 297 Voices of the Poor 217voluntary export restraints 103, 111

Wall Street 18, 160, 166, 266, 270, 277Walmart 125, 126, 139, 189 war

new 287–8 and sex trade 212, 307 and state formation 50 see also Cold War, security, world wars

Washington Consensus 88, 150, 151, 161, 211, 229, 231, 268–71, 278, 312

post 231, 270–1, 277Wealth and Poverty of Nations 40, 62 Weber, Max 19, 50 West

advantages in warfare 53, 54, 58, 61, 67, 99, 287economic system 76, 88, 91–2rise of 16, 40–1, 62

Whitworth, Sandra 199, 201 WikiLeaks 95, 294 Wikipedia 213Wilkins, Mira 127 Williams, Eric 55 Williamson, John, 269, 270 Wilson, Woodrow 14, 20, 78, 82 wisdom 161, 250, 263, 270, 271 Wolfe, Eric 34Wolfers, Arnold 280



360 Index

Wolfensohn, James 195, 297 Wolfowitz, Paul 210, 234 Wollstonecraft, Mary 16, 67 women

and colonialism 57, 60and credit 159 Decade for 206, 207, 208 employment trends 98–9, 180, 182, 184, 199, 200, 203–5,

210–16 in factories 65, 83, 135, 181, 189, 192

progress 89professional 214and race 181

UN Women 209 world conferences 206–9 see also division of labour, feminism, gender, workwork

domestic 213–14 sex 99, 212–3 unpaid 180, 202

see also division of labour, labour, slavery working class see class World Bank 232–5, 238

and basic needs 228, 229 criticism of 97, 232–3, 234debt relief 162, 236 democracy 234 and East Asia 164, 235 and environment 233, 252, 253and global governance 96, 99–100, 114, 161, 164–5, 228,

237, 286, 301, 303, 304, 309, 310, 314, 316and health 297inspection panel 236International Bank for Reconstruction and Development

88, 149, 232, 233International Development Association 232 and labour 164liberal policies 14, 234, 301 origins 87, 88, 150, 156 primary roles 232 president 235reforms 229, 233social safety net 198, 233

structural adjustment lending 229, 239, 269 structure 232and technology 268and women 159, 209–10see also Washington Consensus

World Conference on Women 206, 207 World Development Report 258 World Economic Forum 186, 200, 216World Health Organization (WHO) 209, 297, 304world order 18, 37, 77, 107, 287, 300, 301, 316

see also global governanceWorld Social Forum 186, 278World Trade Organization (WTO)

agreements 114 beef dispute 111, 122, 264 compared with GATT 96, 114 and democracy 122, 123developing countries 116–20, 240–1 dispute settlement 26, 97, 114, 303, 304 Doha Declaration/Round 115, 116, 239 and environment 97 global governance 100, 146, 164, 301, 302, 303, 304, 305,

308, 314, 315 governance 114IPR 272–4, 305 labour rights 191–2, 195legitimacy 122–34 liberalism orientation 14, 18, 28, 183, 191 new protectionism 111origins 96, 114–5principles 112, 124 protests 97, 123, 196 regionalism 120 Seattle Ministerial Conference 123, 314see also process and production methods, Trade-Related

Intellectual Property Rights, Trade-Related Investment Measures

world wars, 68, 77–9 lessons of 14, 25, 87, 280, 286

worldviews 278 see also ideas

zero-sum game 8, 10, 18, 20, 52, 104



Documents

9781137523112 01 prexvi€¦ · Further Reading 124 7 Transnational Production 125 Definitions 127 Theoretical Perspectives: Explaining the Growth of TNCs 128 Major Developments 131