13. The Political Economy of Development

This chapter focuses on the political economy of development. It first considers the different (and competing) ways of thinking about development that have emerged since the end of World War II, laying emphasis on modernization, structuralist, and underdevelopment theories, neo-liberalism and neo-statism, and ‘human development’, gender, and environmental theories. The chapter proceeds by exploring how particular understandings of development have given rise to particular kinds of development strategies at both the national and global levels. It then examines the relationship between globalization and development, in both empirical and theoretical terms. It also describes how conditions of ‘mal-development’ — or development failures — both arise from and are reinforced by globalization processes and the ways in which the world economy is governed.

8. The Evolution of the International Monetary and Financial System

This chapter examines the evolution of the international monetary and financial system since the late nineteenth century. It first considers how changing political circumstances, both internationally and domestically, during the interwar years undermined the stability of the globally integrated financial and monetary order of the pre-1914 period. It then looks at the Bretton Woods monetary system created in 1944 for the post-war period, along with the causes and consequences of challenges to the Bretton Woods order which have emerged since the early 1970s with the globalization of financial markets, the collapse of the gold standard, and the move to a floating exchange rate regime among the major economic powers. The future of the United States dollar is also assessed.

11. Globalization’s Impact on States

This chapter examines the impact of globalization on the nation state. It analyses the case for and against the globalization thesis, focusing on the extent to which global economic integration might restrict the parameters of domestic political autonomy. The chapter first distinguishes between the politics of globalization and the globalization of politics before discussing the principal mechanisms in and through which globalization is seen to impact upon the nation state, along with the empirical evidence that might either substantiate or question the existence of such mechanism. It then considers the complex and sometimes paradoxical relationship between globalization, democracy, and the nation state, with emphasis on both the impact of globalization on states and the state's impact on globalization.

10. The Logics of Economic Globalization

This chapter examines the dynamics of economic globalization by focusing on its underlying causes (or logics). It compares and contrasts the principal theoretical accounts of economic globalization, with particular emphasis on how they contribute to our understanding of the current phase of globalization and its future prospects. The chapter explains what economic globalization is and discusses its principal features, along with the key trends associated with the globalization of economic activity in respect of trade, finance, production, and labour. It also considers how theories of international political economy help us in explaining and understanding economic globalization; whether the global financial crisis of 2008 has precipitated the demise of globalization or the emergence of a ‘new wave’; and whether globalization is still the dominant trend or tendency in the world economy today.

9. The Political Economy of Global Financial Crises

This chapter examines the political economy of global financial crises. The current world economy reflects an experiment involving the opening and integration of financial markets on the one hand, and the dispersion of political authority on the other hand, The resulting governance challenges are evident in the circumstances surrounding financial crises spilling ever more readily across national borders. In the late twentieth century, most such crises began in emerging-market countries. In 2008, however, the experiment almost failed catastrophically when policy mistakes in the United States combined with an economic downturn to spawn a global emergency. This chapter considers the changing political economy of systemic risk assessment, crisis prevention, and emergency management as the experiment continues. The timeline for the financial crisis of 2008 is presented.

1. The Study of Global Political Economy

This volume provides an introduction to the field of Global Political Economy (GPE). It explores some of the approaches that have addressed the key concerns of theorists of GPE; for example. what conditions are most conducive to the emergence of collaborative behaviour among states on economic issues, or what are the determinants of the foreign economic policies of states. It examines various aspects of the debate about globalization as well as the impact of globalization on world poverty, inequality, and the environment. It also considers how globalization has changed the relations between industrialized and less developed economies. This chapter discusses the global financial crisis and the world economy pre-1914, in the interwar period, and post-1945. It also analyses the emergence of GPE as a field and describes a number of approaches to the study of GPE.

4. The Domestic Sources of Foreign Economic Policies

This chapter examines the domestic sources of foreign economic policies, with a particular focus on the domestic politics of trade, immigration, foreign investment, and exchange rates. It begins by discussing two main tasks that need to be performed in order to understand the domestic origins of foreign economic policies: first, identify and map the policy preferences of different groups in the domestic economy; second, specify how political institutions determine the way these preferences are aggregated or converted into actual government decisions. The chapter also considers the general relationship between democratization and foreign economic policymaking by looking at elections and representation, legislatures and policymaking rules, and bureaucratic agencies.

2. The Nineteenth-Century Roots of Theoretical Traditions in Global Political Economy

This chapter discusses the historical origins and the subsequent intellectual lineage of what many textbooks inform the beginning student are the three core theoretical positions within contemporary Global Political Economy (GPE): realism, liberalism, and Marxism. It first considers the use of textbooks in teaching GPE before analysing the historical relationship between realist GPE and the nineteenth-century nationalist political economy tradition, focusing in particular on the political economy foundations of nineteenth-century economic nationalism. It then examines the link between GPE liberalism and Smithian political economy, taking into account Adam Smith's political and moral critiques of mercantilism as well as his views on self-command. The chapter also assesses GPE Marxism's roots in the nineteenth-century Marxian political economy tradition and concludes by looking at GPE feminism and its relation to the nineteenth-century popularization of classical economics for women.

12. Global Growth, Inequality, and Poverty: The Globalization Argument and the ‘Political’ Science of Economics

This chapter examines the globalization argument, which warns that mutual benefits will be at risk if countries start to backslide on market liberalization. It begins with a discussion of trends in globalization over the past century, and the kind of evidence provided by mainstream economists to support the globalization argument. It then considers global-level trends in economic growth, income inequality, and poverty over the past few decades. It also explains why the consensus among economists about the virtues of globalization has been so resilient. It concludes by outlining some challenges for economists, especially in the field of professional ethics. The chapter argues that the evidence for the globalization argument is not as robust as the policy mainstream presumes.

7. The Globalization of Production

This chapter examines how advances in transportation and technology allow a firm to divide up a global value chain — the sequence of activities that lead to the production of a particular good or service — and how these decisions create new opportunities and challenges for both companies and the societies within which they operate. It first considers the rise of global production and the forces that have led to dramatic increases in foreign direct investment and outsourcing. It then describes two dimensions of a global value chain: governance (how to coordinate activities) and location (where to locate each activity). It also explores trends in the globalization of production by focusing on the case of China.