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 Theory
2. Dependency Theory
3. 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. Subsidies
2. Dumping—when company sells product
for less abroad than domestically
3. Cartels
Using Economic Means To Achieve
Policy Goals
• National Security Restrictions
• Economic Incentives
• Economic Sanctions