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Chapter 10
National Economic Competition: The Traditional Road
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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.
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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.
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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
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Globalization and Interdependence
• Trade expanding with shrinking world• International investments• Multinational corporations• NGOs• Outsourcing
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Monetary Relations
• Increasingly significant in both international and domestic economic health.
• Exchange rates• Globalization of financial services• International regulation of money
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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
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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)
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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.
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Ways to Achieve Economic Goals
3. Monetary Barriers: Limit imports, restrict exports.
4. Investment Barriers: prevent control.
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Trade and Investment
1. Subsidies2. Dumping—when company sells product
for less abroad than domestically3. Cartels
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Using Economic Means To Achieve Policy Goals
• National Security Restrictions• Economic Incentives• Economic Sanctions