Global Political Economy

Global Political Economy American University School of International Service (SIS) SIS 589, Spring 2011, Tue 8:30-11:10 am (EQB 205) Prof. Matthias Matthijs E-mail: matthijs@american.edu Office: SIS 225 Phone: (202) 885-1625 Office Hours: Tuesdays 2-5:30 pm & Fridays 10-11 am Introduction and Course Content IPE, at least the version most US-trained political scientists are familiar with, has had an interesting history. It came to prominence in the early 1970s as an attempt to answer what Benjamin Cohen has called the one seriously big question of US relative decline. That is, it was thought by many of the founding scholars of IPE in the 1970s including Nye, Keohane, Kindleberger, Gilpin and Krasner that the US was in terminal decline and would soon be eclipsed by Japan. Instead, the US became a unipolar power/empire/uber-hegemon, Japan became mired in a two decade long recession, the Cold War ended without a shot being fired, and China rose from poverty to (relative) affluence. Despite this rather unexpected turn of events, the main theories of the field, hegemonic stability theory, regime theory, etc., carried on as if nothing happened until they pretty much ran out of steam by the mid 1990s. Luckily for us, in the wake of these grand theories of the 1970s and 1980s; neorealism; neoliberal institutionalism; hegemonic stability theory etc., came a crop of new work. This new IPE is multi-method, more interdisciplinary, and more global in its outlook. This course brings together what I think of as some of the most interesting work of this new IPE, as well as the classic bits of the Old-School stuff that you need to know to be a credible IPE scholar. It is neither exhaustive nor comprehensive, but it tackles areas, themes, and theories that should give a good grounding in what is out there in the subfield. The course is structured in a classic IPE thematic format. Part I (class sessions 1-4) deals with the various Theoretical Approaches to IPE. Part II (class sessions 5-6) deals with the political economy of International Trade and Part II (class sessions 7-8) covers the political economy of International Finance. The last part, Part IV, deals with all the relevant aspects of Globalization (class sessions 9-13). It is important to note that this is not an international economics class, even though I will assume basic knowledge of its main international economic concept (such as comparative advantage, exchange rates, etc.). But keep in mind that, for this course, most of the time, it s NOT just the economics, stupid! BUT it s the politics, stupid! that matter. 1

Course Objectives These are the main course objectives of this seminar: hone your analytical skills and improve your writing and presentation skills; develop critical political science thinking; identify and become familiar with the different schools of thought and debates in international political economy; examine the ways in which interests, institutions, and ideas are implicated in practice; focus on the interactions between state power, the market, and civil society, including their institutional structures; grasp how concepts may be applied in different countries and regions in the world; explore controversies about global crisis and globalization; and clarify your own values. Learning Outcomes The expected learning outcomes of this seminar are: become familiar with the meaning of international political economy ; discover the scope of this field specifically, the kinds of questions that international political economists ask; have the confidence to discuss topics of a theoretical nature (e.g., how and why are states and markets changing?) as they relate to specific locales and to the world economy; assess empirical evidence; comprehend substantive matters such as development strategies within the global political economy; improve your writing in a concise and polished way; be able to deliver a document of the highest professional standards; and position yourself in key debates that is, know where you stand. Course Requirements Students are expected to come to each class, participate actively in class discussions, complete the take-home midterm examination, write a medium-length paper on globalization, and present their work during the one of the last four classes. The weights attached to these requirements are: Class Participation 10% Midterm Examination 40% In-Class Presentation 20% Globalization Paper 30% The Midterm (Take Home) Examination will consist of open-ended essay questions (you will be able to choose 2 out of 4 questions), drawing on the readings, lectures and class discussions of the first 8 sessions (Parts I, II and III of the course). The midterm will be handed out in class on 2

March 15 th and you will have the week of March 22 nd when there will be no class - to complete it. The midterm is due in class on March 29 th. The paper should be on an aspect of globalization that is of particular interest to you. Undergraduate students have a length limitation of 3,500 words (approximately 14-16 pages), graduate students of 5,000 words (approximately 18-20 pages). Please include an exact word count on the title page. Papers will be evaluated on the basis of thoroughness of research, quality of analysis, and writing style. Analytical interpretation and explanation is generally more difficult than simple description, and papers will be evaluated accordingly. A paper prospectus of 1-2 pages describing the proposed topic, research question(s), and a preliminary bibliography should be submitted to the Professor for approval during the fourth class session (February 1). Final papers are due in both hard copy and electronic format on Tuesday April 26 th by 5pm. Students will also be required to give a 10-15 minute presentation in class on their paper topic during one of the last four class sessions, which will count towards their final grade. The exact time slot will be assigned during the 5 th class sessions, giving everyone adequate time to prepare for the their presentations. Required Books (Available for purchase at AU bookstore) 1) John Ravenhill (2008), Global Political Economy (Oxford University Press) 2) Benjamin J. Cohen (2008), International Political Economy: An Intellectual History (Princeton University Press) Required and Recommended Readings & Case Studies The course will use multiple academic articles as well as book chapters, all of which will be available through Blackboard, under Required Readings, Recommended Readings, and Case Studies. Some of the recommended books and articles might only be available in the library. Academic Integrity SIS has a strict policy of adherence and enforcement regarding American University s academic integrity code. It is your obligation as a student to be familiar with it. It can be found at: http://www.american.edu/academics/integrity/code.htm 3

Schedule of Classes PART ONE: THEORETICAL APPROACHES TO GLOBAL POLITICAL ECONOMY Class One 11 January 2011 The Study of Global Political Economy: Introduction & Overview of the Course -Ravenhill, chapter 1. -Cohen, Introduction. -Susan Strange (1970), International Economics and International Relations: A Case of Mutual Neglect, International Affairs 46 (April). -Robert Gilpin (1971), The Politics of Transnational Economic Relations, International Organization 25:3 (Summer). -Richard N. Cooper (1972), Economic Interdependence and Foreign Policy in the Seventies, World Politics 24:2 (January). -Peter Gourevitch (1978), The Second Image Reversed: The International Sources of Domestic Politics, International Organization 32:4 (Autumn). Class Two 18 January 2011 Theoretical Traditions in Global Political Economy: American School vs. British School and Beyond -Ravenhill, chapter 2 -Cohen, chapters 1 and 2 -Charles P. Kindleberger (1981), Dominance and Leadership in the International Economy: Exploitation, Public Goods and Free Rides, International Studies Quarterly 25:2 (June). -Stephen D. Krasner (1976), State Power and the Structure of International Trade, World Politics 28:3 (April). -Bruce Russett (1985), The Mysterious Case of Vanishing Hegemony; or, Is Mark Twain Really Dead?, International Organization 39:2 (Spring). -David A. Lake (1993), Leadership, Hegemony, and the International Economy: Naked Emperor or Tattered Monarch with Potential?, International Studies Quarterly 37:4 (December), 459-489. -Duncan Snidal (1985), The Limits of Hegemonic Stability Theory, International Organization 39:4 (Autumn). 4

Class Three 25 January 2011 Regimes & Interdependence: Collaboration and Co-Ordination in the Global Political Economy -Ravenhill, chapter 3. -Cohen, chapters 3 and 4. -Robert O. Keohane (1982), The Demand for International Regimes, International Organization 36:2 (Spring), 325-355. -John Gerard Ruggie (1982), International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order, International Organization 36:2 (Spring), 379-415. -Susan Strange (1994), Wake Up, Krasner! The World Has Changed. Review of International Political Economy 1:2 (Summer). -Oran R. Young (1991), Political Leadership and Regime Formation: On the Development of Institutions in International Society, International Organization 45:3 (Summer). -Lisa L. Martin (1992), Interests, Power, and Multilateralism, International Organization 46:4 (Autumn). -Michael N. Barnett and Martha Finnemore (1999), The Politics, Power, and Pathologies of Internationmal Organizations, International Organization 53:4 (Autumn). Class Four 1 February 2011 Bringing the State Back In: The Domestic Sources of Foreign Economic Policies -Ravenhill, chapter 4. -Cohen, chapters 5, 6 and 7. -Peter J. Katzenstein (1976), International Relations and Domestic Structures: Foreign Economic Policies of the Advanced Industrial States, International Organization 30:1 (Winter). -Ronald Rogowski (1987), Political Cleavages and Changing Exposure to Trade, American Political Science Review 81:4 (December). -Michael J. Hiscox (2001), Class versus Industry Cleavages: Inter-Industry Factor Mobility and the Politics of Trade, International Organization 42:1 (Winter). 5

PART TWO: THE IPE OF TRADE Class Five 8 February 2011 The Evolution and Political Economy of the Global Trade Regime -Ravenhill, chapter 5. -Robert Gilpin (2001), Global Political Economy (Princeton University Press), chapter 8. -Marcus Noland (1999), Learning to Love the WTO, Foreign Affairs 78:5, pp. 78-92. -CASE STUDY: The Doha Development Round (Jikon Lai). -Helen Milner (1999), The Political Economy of International Trade, Annual Review of Political Science 2, pp. 91-114. -Judith Goldstein, Douglas Rivers, and Michael Tomz (2007), Institutions in International Relations: Understanding the Effects of the GATT and the WTO on World Trade, International Organization 61:1 (Winter), 37-67. -Jane Ford (2002), A Social Theory of Trade Regime Change: GATT to WTO, International Studies Review 4:3 (Fall). -Judith Goldstein (1988), Ideas, Institutions and American Trade Policy, International Organization 42:1 (Winter). -Helen V. Milner and David Yoffie (1989), Between Free Trade and Protection, International Organization 43:2 (Spring). -Joanne Gowa and Edward D. Mansfield (1993), Power, Politics and International Trade, American Political Science Review 87:2 (June). Class Six 15 February 2011 Building Bloc or Stumbling Bloc? Regionalism -Ravenhill, chapter 6. -Robert Gilpin (2001), Global Political Economy, chapter 13. -World Bank (2005), Global Economic Prospects 2005: Trade, Regionalism and Development, Chapter 3: Regional Trade Agreements: Effects on Trade. Online available at: http://siteresources.worldbank.org/intgep2005/resources/gep107053_ch03.pdf -Jagdish Bhagwati, Chapter 2: Regionalism and Multilateralism: an overview, in Jaime de Melo and Arvind Panagariya (eds.), New Dimensions in Regional Integration (CEPR, 1993), pp. 22-51. -Michael Plummer (2007), Best Practices in Regional Trading Agreements: An Application to Asia, The World Economy 30:12, pp. 1771-1796. 6

PART THREE: THE IPE OF FINANCE Class Seven 22 February 2011 The Evolution of the International Monetary and Financial System -Ravenhill, chapter 7. -Barry Eichengreen (1989), Hegemonic Stability Theories of the International Monetary System. In Can Nations Agree? Issues in International Economic Cooperation, Richard N. Cooper, Barry Eichengreen, Gerald Holtham, Robert D. Putnam, and C. Randall Henning, 255-98. (Washington, DC: Brookings Institution). -Benjamin J. Cohen (1996), Phoenix Risen: The Resurrection of Global Finance, World Politics 48:2 (January). -CASE STUDY: The Expansion of the IMS after WWII (Andre Broome). -David M. Andrews (1994), Capital Mobility and State Autonomy: Toward a Structural Theory of International Monetary Relations, International Studies Quarterly 38:2 (June), 193-218. -William Bernhard and David Leblang (1999), Democratic Institutions and Exchange-rate Commitments, International Organization 53:1 (Winter). -Jonathan Kirshner (2000), The Study of Money, World Politics 52: 3 (April), pp. 407-36. Class Eight 1 March 2011 The Political Economy of Global Financial Crises -Ravenhill, chapter 8 -Carmen M. Reinhart and Kenneth S. Rogoff, This Time Is Different: A Panoramic View of Eight Centuries of Financial Crises, NBER Working Paper 13882. Online available at: http://www.nber.org/papers/w13882.pdf -CASE STUDY: A Decade of Financial Crises (Jikon Lai) -Charles Kindleberger (1978), Manias, Panics, and Crashes (New York: John Wiley) -Raghuram G. Rajan (2010), Fault Lines: How Hidden Fractures Still Threaten the World Economy (Princeton, NJ: Princeton University Press). -Herman Schwartz (2009), Subprime Nation: American Power, Global Capital, and the Housing Bubble (Ithaca, NY: Cornell University Press). -Simon Johnson and James Kwak (2010), 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown (New York: Pantheon). -George Soros (2009), The Crash of 2008 and What It Means (New York: Public Affairs). 7

*** Tuesday 8 March 2011 NO CLASS Spring Break *** PART FOUR: THE IPE OF GLOBALIZATION: MYTH & REALITY, OPPORTUNITIES & THREATS Class Nine 15 March 2011 The Logics of Economic Globalization -Ravenhill, chapter 9 -Geoffrey Garrett (2000), The Causes of Globalization, Comparative Political Studies (August/September), 941-991. -Mark Rupert (2005), Reflections on Some Lessons Learned from a Decade of Globalisation Studies, New Political Economy, 10:4: 457-478. -Rawi Abdelal and Adam Segal, 2007. Has Globalization Passed its Peak? Foreign Affairs (January/February): pp. 103 14. *** Tuesday 22 March 2011 NO CLASS *** *** MIDTERM TAKE-HOME EXAMINATION *** Class Ten 29 March 2011 Globalization s Impact on States -Ravenhill, chapter 10. -Jeffry A. Frieden (1991), Invested Interests: The Politics of National Economic Policies in a World of Global Finance, International Organization 45:4 (Autumn), pp. 425-451. -John B. Goodman and Louis W. Pauly (1993), The Obsolescence of Capital Controls? Economic Management in an Age of Global Markets, World Politics 46:1 (October). -Robert Keohane and Helen Milner (ed.) Internationalization and Domestic Politics, 3-24, 243-58. -Jeffry Frieden and Ronald Rogowski, The Impact of the International Economy on National Policies: An Analytical overview, in Keohane and Milner (eds.), Internationalization and Domestic Politics, pp. 25-47. 8

Class Eleven 5 April 2011 The Globalization of Production -Ravenhill, chapter 11. -Gary Gereffi (1996), Global Commodity Chains: New Forms Of Coordination And Control Among Nations And Firms In International Industries, Competition and Change 1 (4): pp. 427 39. -Gary Gereffi, Humphrey, and Sturgeon (2005), The Governance of Global Commodity Chains, Review of International Political Economy 12:1 (February), pp. 78-104. -Henry Wai-Chung Yeung (2009), The Rise of East Asia: An emerging challenge to the study of international political economy, in Mark Blyth (ed.), Routledge Handbook of International Political Economy (London: Routledge), chapter 10. -CASE STUDY: The BRICs of the Global Economy (Jikon Lai). -G. John Ikenberry (2008), The Rise of China and the Future of the West, Foreign Affairs 87 (January/February), pp. 23-37. -Giovanni Arrighi (2009), Reading Hobbes in Beijing: Great power politics and the challenge of peaceful ascent, in Mark Blyth (ed.), Routledge Handbook of International Political Economy (London: Routledge), chapter 10. -Robert Feenstra (1998), Integration of Trade and Disintegration of Production, Journal of Economic Perspectives 12: 4 (Fall), pp. 31-50. -Uma Subramanian and Matthias Matthijs (2007), Can Africa Leap into Global Network Trade? World Bank Policy Research Working Paper Series, WPS 4112, (January). Class Twelve 12 April 2011 Globalization, Growth, Poverty, Inequality, Resentment, and Imperialism -Ravenhill, chapter 12. -Daron Acemoglu and James Robinson (2006), Economic Backwardness in Political Perspective, American Political Science Review 100 (February), pp. 115-131. -Daron Acemoglu, Simon Johnson and James Robinson (2001), The Colonial Origins of Comparative Development: An Empirical Investigation, American Economic Review 91, pp. 1369-1401. -Robert Wade (2002), US Hegemony and the World Bank: The Fight over People and Ideas. Review of International Political Economy 9: 215 43. -Alexander Gerschenkron (1962), Economic Backwardness in Historical Perspective, (Harvard University Press) pp. 5-30. -Ha Joon Chang (2002), Kicking Away the Ladder: Development Strategy in Historical Perspective (London: Anthem Press). -Nita Rudra (2002), Globalization and the Decline of the Welfare State in Less-Developed 9

Countries, International Organization 56:2 (Spring), 411-445. -Erik Wibbels (2006), Dependency Revisited: International Markets, Business Cycles, and Social Spending in the Developing World, International Organization 60:2 433-468. Class Thirteen 19 April 2011 Globalization and Development in the South -Ravenhill, chapter 13 -Walden Bello (2009), States and markets, states versus markets: The developmental state debate as the distinctive East Asian contribution to international political economy, in Mark Blyth (ed.), Routledge Handbook of International Political Economy (London: Routledge), chapter 11. -John Williamson (1993). Democracy and the Washington Consensus, World Development 21, pp. 1329-1336. -Robert Wade (2003), What Strategies are Viable for Developing Countries Today: The World Trade Organization and the Shrinking of the Development Space. The Review of International Political Economy 10:4. -CASE STUDY: Customizing the International Debt Regime (Andre Broome) -Kiren Aziz Chaudhry (1993), The Myths of the Market and the Common History of Late Developers, Politics and Society 21:3 (September), pp. 245-74. -Stephan Haggard and Sylvia Maxfield (1996), The Political Economy of Financial Liberalization in the Developing World, International Organization -Bruce Bueno de Mesquita and Alastair Smith (2009), A Political Economy of Aid, International Organization 63:2 (April), pp. 309-340. -Jeff Chwieroth (2007), Testing And Measuring The Role Of Ideas: The Case Of Neoliberalism and the International Monetary Fund. International Studies Quarterly 51: 5 30. *** Tuesday 26 April 2011 FINAL GLOBALIZATION PAPERS DUE *** *** Deadline: 5:00 PM *** *** Submit both a hard copy (in my mail slot at the SIS HUB) & an electronic copy to matthijs@american.edu *** 10