April 23, 2012
Changes in the Global Economy since
1989
 End of the Cold War
 Acceleration of Globalization
 September 11
 Rise of Neo-Liberalism
 Washington Consensus
 Welfare to Workfare
 Empowerment and personal responsibility replaced
protection of the vulnerable in rationale for government
social programs
 Financial Crisis of 2007-8
 Rise of China and India
The Euro Crisis
 What is the future of the Euro
Zone?
 Is austerity the answer to current
difficulties?
 Is Greece just the tip of the
iceberg?
 Sarkozy defeated in the first round
of French presidential elections in
2012, may not be reelected
 G20 pledged $430 billion for IMF
Austerity protest in Italy
Attention turns to Spain
What comes next in the study of
International Political Economy?
 How to deal with growing volatility of world financial
markets
 How to deal with the growing power of MNCs and
other transnational actors
 How to preserve and expand democratic governance in
the face of growing vulnerability of the system to
major disruptions (military, economic, and terrorist)
 How to reconcile the global interests in economic
growth and environmental protection
A Renewed Focus on the Local
 Globalization makes it difficult for governments to
protect local communities and regions from its
negative effects (especially under the influence of neoliberal ideas)
 In industrialized countries, environmental concerns
are producing a greater focus on local issues
 In developing countries, social safety nets were too
thin to begin with; increasing the burden on local
communities
 Governments everywhere have been scaling back their
efforts to help the vulnerable
What are the Issues that Both Sides
Have to Address?
 Inability of either globalization or localism to
overcome forces that lead to domestic violence and
war
 Redefining the role of local and national governments,
along with international governance institutions, so
that the global economy can produce better results
 Continued poverty in the Fourth World and elsewhere
 Threats to the environment (e.g. climate change)
Recent Concerns
 Global financial crisis may lead to a return to greater
regulation of financial markets
 Other types of regulation may become more
acceptable also:
 Anti-trust and competition policies
 Environmental regulations to deal with global climate
change and toxic waste
 Relaxation of intellectual property enforcement to deal
with AIDS and other global pandemics
 Renewed focus on education and infrastructure
Who is thinking about these
things? Just a few names…
 Saskia Sassen
 Suzanne Berger
 William Easterly
 Hernando de Soto
 Joseph Stiglitz
Saskia Sassen
 Professor, Sociology, University of
Chicago
 Books:
 Cities in a world economy
 Deciphering the Global: Its Spaces,
Scales and Subjects
 The Global City: New York, London,
Tokyo
 Focuses on emerging social practices
video
Suzanne Berger
 Professor, Political Science, MIT
 Books:
 National Diversity and Global
Capitalism
 How We Compete
 Focuses on the political economy of
globalization and particularly on
convergence
video
William Easterly
 Argues against panaceas
 Argues for proper structuring of group incentives
 Formerly employed by World Bank
 Now professor at NYU
 Video
 Bill Gates hated his books
Hernando de Soto
 Peruvian economist
 Head of Institute for Liberty
and Democracy in Lima
 Focuses on the role of property
rights
 Book:
 The Mystery of Capital: Why
Capitalism Triumphs in the
West and Fails Everywhere Else
video
Joseph Stiglitz
 Former chief economist of the World Bank turned
critic of the IMF after the Asia Crisis
 Argues the IMF mismanaged globalization
 Too focused on inflation and fiscal rectitude
 Neglected economic growth and employment
video