IPE: Framing horizontal questions WHY? What is the driving force in the global economy? In this...
-
Upload
kristopher-wiggins -
Category
Documents
-
view
215 -
download
1
Transcript of IPE: Framing horizontal questions WHY? What is the driving force in the global economy? In this...
IPE: IPE: Framing horizontal questionsFraming horizontal questions
• WHY? What is the driving force in the global economy? In this case?Market competition - Collective search for efficiency national ambitions and interstate rivalriestechnology …OR Ideas and values
•WHO? Who adjusts?Importer/ exportersMy constituency / your constituencyLow skill labor in the North/in the SouthEU / candidate countries
•FOR WHOM? In Whose Interest? Great power; Collective; those in need
International Political EconomyInternational Political Economy
Caveat emptor (Ce que je crois)Caveat emptor (Ce que je crois)
-> An actor-centred “good story”-> An actor-centred “good story”-> -> liberal assumptions: opportunity to cut deals; liberal assumptions: opportunity to cut deals; positive sum game; shared stake in a stable positive sum game; shared stake in a stable international economic order; governance issuesinternational economic order; governance issues-> realist assumptions: state centric but not -> realist assumptions: state centric but not exclusiveexclusive-> -> outside liberal framework: issues of global outside liberal framework: issues of global justice, issues of identity and normsjustice, issues of identity and norms-> Role of narratives: “Europe as a model-> Role of narratives: “Europe as a model””
Lecture 2: The Post-War Lecture 2: The Post-War Order Order
and US Hegemonyand US Hegemony
……. And what about Europe?. And what about Europe?
Negotiating at Bretton Negotiating at Bretton WoodsWoods
Laisser-faire1930s
ImperialImperial system system
of preferencesof preferences ?
•Beggar-thy-neighbour•Competitive devaluations
•gold standard•Prevention of crisis•Employment
1945 - United States power: 1945 - United States power: Hegemony Stability “theory”Hegemony Stability “theory”
• From From Pax Britannica Pax Britannica (19(19th)th) to to Pax Americana Pax Americana (20(20thth))
• What is the point of hegemonic power ?What is the point of hegemonic power ?
• The benign view: The benign view: - to ensure economic growth and stability (Kindleberger)to ensure economic growth and stability (Kindleberger)
- to ensure peace and security through a liberal economic to ensure peace and security through a liberal economic order (Gilpin)order (Gilpin)
- to make up for “free riders”to make up for “free riders” Order created by a single powerOrder created by a single power
• Marxist variant: Marxist variant: - overcome contradictions of capitalism through imperialism; overcome contradictions of capitalism through imperialism;
Gramscian unity of structure and superstructure – power Gramscian unity of structure and superstructure – power hidden under ideological consensus: legitimacy of dominance hidden under ideological consensus: legitimacy of dominance (“not imperialism” )(“not imperialism” )
Hegemony Stability Hegemony Stability “theory”“theory”
• What are the sources of hegemonic What are the sources of hegemonic power?power?
1.1.Control over markets: maintains an open market Control over markets: maintains an open market for other countries’ surpluses; discretionfor other countries’ surpluses; discretion
2.2.Control over sources of capital: outflows for Control over sources of capital: outflows for investment; credits to friendsinvestment; credits to friends
3.3.Control over raw materialsControl over raw materials4.4.Competitive superiority: technological and Competitive superiority: technological and
organisational superiorityorganisational superiority5.5.Stable national currency supported by facilities in Stable national currency supported by facilities in
times of crisistimes of crisisIndicators: share of world trade; monetary reserve; Indicators: share of world trade; monetary reserve;
production of raw material… production of raw material… Military power as background conditionMilitary power as background condition
Hegemonic leadership:Hegemonic leadership:Hegemony Stability “theory” Hegemony Stability “theory” refinedrefined
• How does the hegemon transfer his How does the hegemon transfer his resources into rules for the system as a resources into rules for the system as a whole? whole? – Leadership (willingness to lead) activates the Leadership (willingness to lead) activates the
link between power and outcome.link between power and outcome.– Domestic politics and other (dis)incentivesDomestic politics and other (dis)incentives– Hegemony as a situation in which “one state is Hegemony as a situation in which “one state is
powerful enough to maintain the essential rules powerful enough to maintain the essential rules governing interstate relations and willing to do governing interstate relations and willing to do so” (Keohane and Nye)so” (Keohane and Nye)
• Analyse deference of secondary states: ST Analyse deference of secondary states: ST and LT benefits vs ST costs for Hegemon; and LT benefits vs ST costs for Hegemon; elites vs countries.elites vs countries.
Hegemonic Stability theory Hegemonic Stability theory revisitedrevisited
• 1. Power and interests – HST1. Power and interests – HST– Weak version: necessary but not sufficientWeak version: necessary but not sufficient– Alternatives: not necessary at all!Alternatives: not necessary at all!
• 2. The role of ideas, shared belief and 2. The role of ideas, shared belief and ideological consensusideological consensus
• 3. The role of institutions3. The role of institutions
Negotiating at Bretton Negotiating at Bretton WoodsWoods
Laisser-faireOrthodoxy
ImperialImperial system system
of preferencesof preferences ?
The Bretton Woods The Bretton Woods compromise: Hegemonic compromise: Hegemonic stability and embedded stability and embedded liberalismliberalism• Broad forces shaping settlement:Broad forces shaping settlement:
- System congenial to US interests; breaks down System congenial to US interests; breaks down German, Japanese and UK barriersGerman, Japanese and UK barriers
- Broad outline; opennessBroad outline; openness
• Convergence of interests and their Convergence of interests and their redefinitionredefinition– range of post war orders possiblerange of post war orders possible– Role of expert community; change in thinking; Role of expert community; change in thinking;
Keynesian revolutionKeynesian revolution
The Bretton Woods The Bretton Woods compromise: (cd)compromise: (cd)
• 3 beliefs:3 beliefs:1)1) Need currency stability and Need currency stability and
convertibility – adjustment subject to convertibility – adjustment subject to international agreementinternational agreement
2)2) International stabilization fund to assist International stabilization fund to assist governments in the short term governments in the short term (creditor/debitors?)(creditor/debitors?)
3)3) Managed world economy through Managed world economy through collaboration among governments and collaboration among governments and mutual supervision (what is legitimate?)mutual supervision (what is legitimate?)
A complementary explanation:A complementary explanation:Embedded LiberalismEmbedded Liberalism
• ““The essence of the compromise of The essence of the compromise of embedded liberalism was that post war embedded liberalism was that post war economic reconstruction – unlike economic reconstruction – unlike economic liberalism of the 1930s, was economic liberalism of the 1930s, was aimed to be multilateral in character aimed to be multilateral in character and unlike unfettered liberalism of the and unlike unfettered liberalism of the gold standard and free trade, post-war gold standard and free trade, post-war multilateralism multilateralism would be predicated would be predicated upon domestic interventionism to upon domestic interventionism to ensure attainment of national ensure attainment of national objectives” (Ruggie, 1982)objectives” (Ruggie, 1982)
Embedded Liberalism : Embedded Liberalism : variants on a themevariants on a theme
• Reconcile openness with the commitment to Reconcile openness with the commitment to full employmentfull employment– E.g. contraction and unemployment are not E.g. contraction and unemployment are not
satisfactory solutions for deficit countriessatisfactory solutions for deficit countries– Keynes: management of currency must not Keynes: management of currency must not
undermine domestic expansionary policies undermine domestic expansionary policies – Unique blend of laisser-faire and interventionismUnique blend of laisser-faire and interventionism
• social welfare must dictate international social welfare must dictate international economic plans not the other way around. economic plans not the other way around.
• Not liberal with domestic cheating- Not liberal with domestic cheating- Internationalism based on a sense of shared Internationalism based on a sense of shared purpose : ”political power represents a fusion purpose : ”political power represents a fusion of power with social purpose” of power with social purpose”
• Differentiated commitment among countries Differentiated commitment among countries yet sharedyet shared
Negotiating at Bretton Negotiating at Bretton WoodsWoods
Laisser-faire1930s
Imperial systemImperial system
of preferencesof preferences
Keynes 1Keynes 1?
Openness with convertibility…White / US
…But safeguards (Double screen to cushion domestic economy):Keynes 2 / Europe
1. Assistance in case of BoP deficit (IMF)2. Adjustment of exchange rate – who adjusts?
No : international currency; Tax excess reserves of creditors; Exchange control
Hegemonic Stability “theory” Hegemonic Stability “theory” Creating the GATT (1947)Creating the GATT (1947)• Trade liberalization –non discrimination: 1) Trade liberalization –non discrimination: 1)
National treatment ; 2) most favored nation (MFN)National treatment ; 2) most favored nation (MFN)=> Multilateralism NOT free trade=> Multilateralism NOT free trade• BUT safeguards, exemptions, exceptions to BUT safeguards, exemptions, exceptions to
protect social policies:protect social policies: (Wide range of responses to protectionist (Wide range of responses to protectionist
pressures)pressures)– Progressive liberalisationProgressive liberalisation– Domestic industry injuryDomestic industry injury– Surge of imports and BoP crisis - EmploymentSurge of imports and BoP crisis - Employment
• Discrimination authorised:Discrimination authorised:– superior public policy goals such as the protection of superior public policy goals such as the protection of
human life or health, the conservation of exhaustible human life or health, the conservation of exhaustible natural resources, or the protection of public morals natural resources, or the protection of public morals
– - regional preferences admitted- regional preferences admitted
What What Next?Next?
1950s to 1980s:1950s to 1980s:Hegemonic Stability “theory” Hegemonic Stability “theory” revistedrevisted• Presence of Hegemon => order-stability-Presence of Hegemon => order-stability-
wealth wealth
(1)(1) (3) (3) (2)(2)
-> What can we observe? (in the 70s-80s)-> What can we observe? (in the 70s-80s)
1) Declining hegemony?1) Declining hegemony?
2) Declining “order”? Chaos?2) Declining “order”? Chaos?
3) Causal relationship?3) Causal relationship?
( Absence of Hegemon =>….instability?)( Absence of Hegemon =>….instability?)
After Hegemony? After Hegemony? ((KeohaneKeohane))The diagnosis of the 1980sThe diagnosis of the 1980s
Assumption 1: Hegemonic decline? Don’t panic! Assumption 1: Hegemonic decline? Don’t panic! Post hegemonic cooperation is possible.Post hegemonic cooperation is possible.
1.1. SupplySupply and and demanddemand: May be necessary to supply : May be necessary to supply international order but then demand quicks ininternational order but then demand quicks in
2.2. CreationCreation of the international order of the international order vs ……….vs ……….Maintenance (life of their own; congruence of Maintenance (life of their own; congruence of
social purpose)social purpose)
=> international regimes=> international regimes : principles, rules and : principles, rules and procedures around which expectations convergeprocedures around which expectations converge
=> The function of regimes: information; reduce costs of => The function of regimes: information; reduce costs of agreement; coping with uncertainty; diffuse agreement; coping with uncertainty; diffuse reciprocityreciprocity
After Hegemony? After Hegemony? The diagnosis of the 1980sThe diagnosis of the 1980s
Assumption 2:Assumption 2: significant disorder?significant disorder?- Post 1971 inconvertibility of the dollar Post 1971 inconvertibility of the dollar
(inevitable liquidity requirements)(inevitable liquidity requirements)- New protectionismNew protectionism- AdjustementAdjustement- Debt crisisDebt crisis
- In fact consistent with embedded In fact consistent with embedded liberalismliberalism
After Hegemony?After Hegemony?The role of international The role of international regimesregimesAssumption 3: Causal relation Assumption 3: Causal relation
H=>orderH=>order
– 1) liberal hegemon1) liberal hegemon– 2) influential hegemon2) influential hegemon– 3) responsible hegemon3) responsible hegemon
Hegemonic Stability “theory” : Hegemonic Stability “theory” : Change in the 1970s? 80s? Change in the 1970s? 80s? 90s?90s?
Continued Continued hegemonic stabilityhegemonic stability
Q: other causes?Q: other causes?
Hegemony not Hegemony not necessarynecessary
-> International -> International RegimesRegimes
(“After Hegemony”)(“After Hegemony”)Hegemony not sufficientHegemony not sufficient
-> Hegemony -> Hegemony withoutwithout
leadershipleadership
Hegemonic declineHegemonic decline
=> New => New protectionism; protectionism; regionalismregionalism
Hegemony?
Stability?
Yes
Yes
No
No
The long view: US vs EUThe long view: US vs EU• Long term growth of GDP/cap: the Long term growth of GDP/cap: the
post war anomalypost war anomaly
The long view: US vs EUThe long view: US vs EU
US vs EU: The long viewUS vs EU: The long view
2004 trade pop GDPEurope: 18% 450 m 25%US: 15% 291 m 21% (?)
US vs EU: US vs EU:
Western Western Hegemony…Hegemony…Or Rival Projects?Or Rival Projects?