chapter 10 national economic competition: the traditional road

Chapter 10

National Economic Competition: The Traditional Road

Theories of International Political Economy

• Economic Nationalism: Belief that the state should use its economic strength to further national interests. Can do so through colonialism, neocolonialism, protectionism, domestic economic support.

Theories of International Political Economy

• Economic Internationalism (capitalism, laissez-faire, economic liberalism, free trade): Belief that international economic relations should and can be conducted cooperatively because the international economy is a non-zero-sum game in which prosperity is available to all.

Theories of International Political Economy

• Economic Structuralism: Belief that economic structure determines politics; argue that he way the world is organized economically determines how world politics is conducted.

1.Marxist Theory2.Dependency Theory3.World Systems Theory

Globalization and Interdependence

• Trade expanding with shrinking world• International investments• Multinational corporations• NGOs• Outsourcing

Monetary Relations

• Increasingly significant in both international and domestic economic health.

• Exchange rates• Globalization of financial services• International regulation of money

Economic Patterns

• Least Developed Countries (LDCs): Southern Hemisphere, less investment opportunities, less stability, extreme poverty, mixed data on some development

• Economically Developed Countries (EDCs): Northern Hemisphere, more economically active

North and South

• North economic development declining, resulting in sharpened competition

• Divergence over political issues• South’s Reform Agenda: New International

Economic Order (outline p. 294)

Ways to Achieve Economic Goals

1. Tariff Barriers: restrictions on trade and investments; form of protectionism.

2. Non-Tariff Barriers: Health and Safety standard requirements, quotas, administrative requirements.

Ways to Achieve Economic Goals

3. Monetary Barriers: Limit imports, restrict exports.

4. Investment Barriers: prevent control.

Trade and Investment

1. Subsidies2. Dumping—when company sells product

for less abroad than domestically3. Cartels

Using Economic Means To Achieve Policy Goals

• National Security Restrictions• Economic Incentives• Economic Sanctions