GlobalPolitical
Economy
Contents
01
Introduction
02
International Political
Economy
03
Three classical
theories of IPE
04
05
06
Neo-Liberalism
Globalization
Conclusion
International
Political Economy
IPE has focused on the interplay of economics and politics in
the world affairs
IPE tries to explains what creates and perpetuates
institutions and what impact institutions have on the world
economy
IPE is centered on the trinity of trade, production, and
finance, but also touches on development, inequality, the
environment, and migration
Recently, the field has evolved in more diverse directions,
concerned with the interplay between public and private
power
Traditional
approaches to IPE
Three seperate traditions dominated
historically: liberalism, nationalism/realism, and
Marxism
- Liberals focus on free trade and the
efficiency of markets
- Realists focus on the competition among
states to maximize their power and security,
and highlight the role of hegemonic power in
the global political economy
- Marxism views world economic relations as a
class struggle between oppressor and
oppressed and is concerned with capitalism as
the structure of the global political economy
Neo-Liberalism
Neo-Liberalism draws on the NeoClassical economics of Adam
Smith and modernization theory of
1950s
It is anti-keynes and “development
economics”
Overriding importance of free
market and free trade
Failure of development due to
state intervention
Strongly pro-capitalist (foreign
investment encouraged)
Encompassed in structural
adjustment programs
Three classical theories of IPE
New approaches to IPE
Policy prescriptions of the
Neo-Gramscianism combines the
Neoliberal Globalization Marxist attention to the power
structures the underpin capitalism with
Project
Liberalization (free markets)
Deregulation of markets and
business
Removal of government controls on
wages, prices etc.
Privitization of state enterprises and
functions
A business-friendly investment
climate
Elimination of tariff and other barriers
to free trade
“Individual Responsibility” rather than
provision of services by the state
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greater emphasis on the ‘ideology’ that
forms a part of the structure of the
global political economy
Social constructivism asks how ideas
shape outcomes in the global political
economy - Some look at the role of
ideology, while others focus on the
interests that define actors’
preferences
Feminism focuses on how the power
structures, interest, and ideas that
underpin the global political economy
are fundamentally gendered in their
nature and consequences
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Globalization
● Globalization has proceeded through many phases since the
sixteenth century
● At end of WW2, foundations laid for post-war international
economic order 1. ‘Embedded Liberalism’
2. Construction of international architecture
Bretton Woods System (IMF, World Bank, GATT WTO)
Deepening European Integration (Treaty of Rome EEC EU)
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The 1970s: end of the ‘Golden Age’
- Closing of the gold window; stagflation
- Developing countries viewed Bretton Woods institutions as
systematically undermining their interests
- Non-aligned Movement (NAM) and New International
Economic Order (NIEO) emerged in the 1960s-70s to reduce
developing countries’ dependence on the international
economy
1980s debt crisis triggered ‘Neo-liberal Counter-revolution’
Pushed trade liberalization, deregulation, and privatization
worldwide the Washington Consensus
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● Post-WW2, the development gap grew between different
countries and religions
- For some, a ‘Golden age’ of economic growth and increasing
living standards; the ‘East Asian Miracle’
- Both others were left behind
Why did divergence occur?
1. Modernization theory (1950s and 1960s): the world is divided
into the ‘advanced’ West and the underdeveloped South,
2. Underdevelopment theory (1960s): ‘catching up’ is not
possible because the structure of capitalism means that
development requires underdevelopment
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What Drives
Globalization?
1. Ideas and ideology (neoliberalism
and globalization are constructed)
2. Powerful interests and institutions
(corporate interests, especially TNCs,
although states and international
institutions still make the rules)
3. Technological revolution
(compresses time and space,
allowing for greater international
economic exchange)
4. Power of states (emphasis has
shifted from the US to include China;
previously saw powerful states as
sponsors of globalization, but this
assumption is now in question)
Who wins and who loses from globalization?: inequality
Expectations that neoliberal globalization would lift the
world’s population out of poverty have been misplaced
Even where progress has been made, the distribution is
highly uneven
Some argue that the dynamics of globalization itself are
responsible for growing inequality
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Who wins and who losses from globalization?: Labour
Exploitation
Labour exploitation is an expression of inequality due to
globalization
Global production is built on processes that maximize profits
for firms and private actors, leading them to search for cheap,
flexible labour
Informal, migrant, and contract workers have become the
backbone of the global labour force
This work is precarious and unprotected
‘Feminization’ of labour means that women are among the
most vulnerable
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Who wins and who losses from
globalization?: Migration
Migration is now truly ‘global’,
involving not just Europe or southnorth movement, but also southsouth migration
Migrants who are highly mobile,
paid, and educated do well, while
others are exploited in low-paid, lowskilled positions
Migrant workers are vulnerable
because they often lack political
power and rights
Migrants can be seen as both
winners and losers from globalization
Migration is itself a driver of
globalization
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The future of globalization
The future of globalization is now in question
given the rise of anti-globalist, nativist, and
populist strains of politics
Left-leaning politics have long included
questions about the value of globalization
But not clear that ‘globalization’ has run a
ground
- Perhaps only ‘neoliberal globalization is in
trouble - Perhaps an alternative model of
globalization will emerge - Perhaps forces of
globalization are so powerful that the status
quo will be maintained
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Globalization
and
Marginalization
The poorest countries have seen little profit
from the recent boom in international
financial flows, while suffering a great deal
from major cuts and reorientations in aid
flows from advanced nations.
Net official development assistance over the
past decade has stagnated in terms of value
and has declined as a share of donors GDP,
reaching in 1994 its lowest level since 1973.
● The gains for those developing countries that have
benefited from greater access to international financial
resources have come at a significant price
. International financial integration entailed an important
loss of policy autonomy has increased most countries’
vulnerabilites to external financial stocks
Globalization has increased inequality between countries
The income gap between the fifth of the world’s people
living in the richest countries and the fifth in the poorest
was 74 to 1 in 1997, up from 60 to 1 in 1990 and 30 to 1 in
1960.
In the 19th century, too, inequality grew rapidly during the
last three decades: the income gap between the top and
bottom countries increased from 3 to 1 in 1820 and 11 to 1 in
1913
By the late 1990s the fifth of the world’s people living in
the highest-income countries had: - 86% of world GDP - the
bottom fifth just 1% - 82% of world export markets - the
bottom fifth just 1% - 68% of foreign direct investment - the
bottom fifth just 1% - 74% of world telephone lines, today’s
basic means of communication - the bottom fifth just 1.5%
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Case Study I: The BRICs and the rise of China
Since 1980s, dramatic growth for Indian and
Chinese economies
Term ‘BRICs’ was coined in 2001 (Brazil,
Russia, India, China and sometimes South Africa)
2016: Chinese Yuan included in IMF
Reserve currency
Since 2018, increasing trade tensions
between US and China
China is the largest foreign holder of US debt
Will China’s rise mean a new global politicaleconomic order; a challenge to neoliberal
dominance and US?
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Case Study II: Slavery and forced labour in
global production
ILO estimates that 24.9 million people are
working in conditions of forced labour (2017) 152 million children in child labour worldwide
Occurs even in ‘rich’ countries and across a
range of industries and sectors
Coercion is expressed through: - Lack of
formal contracts - Debt manipulation - Withheld
wages that may not be paid - Threats of
imprisonment when workers want to leave jobs Restrictions on free movements - Threatened or
actual use of violence
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Opposing Opinions: National
states are irrelevant in an era of
economic globalization
Thank you
2CL BERNABE
2CL LATAYAN
2CL MENDOZA
2CL SORIANO
2CL YPULONG
SEC A