Department of Politics and International Relations

UNIVERSITY OF OXFORD

Department of Politics and International Relations

Optional Subject for M.Phil. in International Relations:

International Political Economy

Michaelmus Term 2005

Course Provider: Dr Kalypso Nicolaïdis, St Antony’s College () website: www.sant.ox.ac.uk/knicolaidis

Time and Place: Tuesdays, 10:30 am- 12:30pm, European Studies Centre, St Antony’s College (70 Woodstock Road)

Course Aims

The course aims to introduce graduate students to aspects of the interaction between states, societies, firms and markets at the international level, with a focus on the European and Transatlantic context. It also covers the most recent controversies in the field around the theme of globalization and global governance. It does not cover directly the IPE of developing countries, although many of the sessions include a strong North-South dimension. It is intended to develop at an advanced level ideas introduced in the core M.Phil. courses on international relations theory and international history. No background in international economics is required.

Rubric

The interrelationship between the world economy and the international political system, including the principal theories regarding international political economy. The course seeks to integrate readings and discussions on theory and methodology and analysis of contemporary issues in IPE. Topics will include: the reconstruction of the international economy after 1945; the role of the US in the post-war period and theories of hegemonic stability; the politics of international trade and the evolution of the GATT/WTO system; the development of regional economic arrangements and the relationship between regionalism, multilateralism and globalization in the world economy; the political economy of the European Single Market; current issues in transatlantic economic relations; the reformulation of IPE under globalization; and the main schools of thought on global economic governance.

The detail of weekly reading and questions is listed below. If there are additional topics that individual students wish to cover, they should consult Dr Nicolaïdis.

Organization of Teaching

The course will be taught in a small tutorial group. During each weekly 3-hour session, there will be a 30-45 minute lecture on the topic(s) followed by group discussion. Each student should come to class with an outline of a response to each of the week’ questions. In addition to discussion within the group, there will be follow-up tutorials on students’ individual work. Each student taking the M.Phil. option is expected to produce 2 papers on topics of choice covered during term (the length is not critical but around 2500/3000 words is a rough norm). Students will be able to post their paper and discussions around it on the course website (on Dr Nicolaidis’ website). The website will be used to post materials, questions and (optionally) essays.

Readings

Students are expected to cover all of the required readings for each week. A packet of week 1’s readings will be available from Dr. Nicolaïdis’ office. Packets of readings for each subsequent week will be distributed in class. Those writing on one of the topics for a week will also be expected to have a command of the arguments in the recommended readings.

Developing some familiarity with major journals in the field is also highly recommended. Students are also expected to keep up during term with the Financial Times, The Economist and with important websites such as:

o  Europa (http://europa.eu.int/index-en.htm)

o  the OECD website (http: www.oecd.org)

o  the WTO website (http: www.wto.org)

Major journals in the field include: International Organization; International Affairs (London); World Politics; The World Economy; International Studies Quarterly; The Journal of World Trade; The Journal of Common Market Studies; The Journal of European Public Policy; American Political Science Review; Review of International Political Economy; Journal of Economic Perspectives; World Development.

Recommended books: Robert Gilpin’s new Global Political Economy (2001); Robert Keohane, After Hegemony (1986); Frieden, Jeffry A. and David A. Lake (eds). International Political Economy: Perspectives on global power and wealth. 4th ed. (2000).

Course Outline:

Week 1. 1. General Introduction to International Political Economy

2. The Construction of the Post-1945 International Economic Order: Theories of hegemonic stability, regime formation, and regime maintenance.

Case: The General Agreement on Tariffs and Trade

Week 2. Market Integration through Politics and the Courts

Case: The European Single Market

Week 3. Tensions in the World Economic System: Regionalism, and the politics of trade linkages

Case: The North American Free Trade Agreement

Week 4. The Interplay between Ideas, Interests and Institutions

Case: The World Trade Organization and related IOs

Week 5. Domestic Politics Approaches to IPE

Case: Transatlantic Economic Relations

Week 6. Globalization and the Reformulation of the IPE Agenda.

Case: The Internet; World Summit on the Information Society

Week 7. Inequalities of Power and Wealth: Conditionality and Redistribution

Cases: IMF/World Bank lending, USAID, EU structural funds, Lome convention and EU enlargement

Week 8. Future Directions in IPE: A Global Governance Agenda for the New Millennium?

Cases: The Cancun Summit and its aftermath (and relation with The Millennium Agenda)

1.  Introduction AND The Construction of the Post-1945 International Economic Order:

Case: The GATT

Part I: Introduction

We will start this class with an introductory lecture on IPE as a field of enquiry, its goals and scope, and its relations to political science, international relations and economics. This will be followed by a class discussion. Please come prepared with questions or comments on what you see at the major theoretical perspectives on the academic study of international political economy in the last three decades.

Required Readings:

Woods, Ngaire, ‘International Political Economy in an Age of Globalization,’ in John Bayliss and Steve Smith, The Globalization of World Politics (2001).

Katzenstein, Keohane and Krasner, ‘International Organization and the State of World Politics’, International Organization, Autumn 1998

Recommended readings

Krugman, Paul and Obstfeld, Maurice, International Economics: Theory and Policy (1999 or any edition since 1985) pp.1-9.

Gilpin, Robert (2001), Global Political Economy, chapters 1 & 4. Skim chapters 2 & 3 for background.

Lawton, Thomas; Rosenau, James; and Verdun, Amy, ‘Introduction: Looking Beyond the Confines,’ in Lawton, Rosenau, and Verdun (eds.), Strange Power: Shaping the Parameters of International Relations and IPE (2000).

Part II: The Construction of the Post-1945 International Economic Order.

Questions

a) How useful is hegemonic stability theory in explaining the nature of the post-45 international economic order? How does it compete with alternative explanatory paradigms, including Ruggie’s concept of ‘embedded liberalism'?

b) To what extent was regime theory developed to supplant or supplement hegemonic stability theory? Under what condition is which approach most relevant?

Required Readings (some can be catch up for week 2)

Skim this reading for the basics on HST:

Krasner, Steve, 'State Power and the Structure of International Trade’ in Frieden and Lake, eds, International Political Economy, (2000).

Then read:

Lake, David, 'British an American Hegemony Compared: Lessons for the Current Era of Decline', in Frieden and Lake, eds, International Political Economy.

Ikenberry, John, ‘A World Economy Restored: Expert Consensus and the Anglo-American Postwar Settlement’, IO, Winter 1992. (details can be skimmed)

Keohane, Robert, After Hegemony (1984), chs 8 and 9. [book in library]

Ruggie, J.G., ‘International Regimes, Transactions and Change: Embedded Liberalism in the Postwar Economic Order’, IO 1982 (vol. 36.2 and vol. 35.4 ) and S. Krasner (ed.), International Regimes (1983), pp. 195-232.

Strange, Susan, ‘Persistent Myths of Lasting Hegemony’, IO, 1987.

Recommended readings

Gilpin, Robert, Global Political Economy, chapter 9.

Eichengreen, Barry, ‘Hegemonic Stability Theories in the International Monetary System’ in Frieden and Lake, eds, International Political Economy.

Finlayson, Jack, and Mark Zacher, ‘The GATT and the regulation of trade barriers: regime dynamics and functions,’ in S. Krasner (ed.), International Regimes (1983), pp. 273-314.

Lairs and Skimmer, International Political Economy: The Struggle for Power and Wealth (1993), pp. 61-95, ‘The Political Economy of American Hegemony’.

Babai, Don, ‘The GATT,’ in Joel Krieger (ed.), Oxford Companion of World Politics (1993), pp. 342-348.

Jackson, John H., World Trade and the Law of the GATT, ch. 1-2 (1969).

Walter, A., World Power and World Money (1993), chs. 1-3, 6-7.

Gardner, R., Sterling-Dollar Diplomacy in Current Perspective (1980).

Frieden, Jeffry, ‘Sectoral Conflict and US Foreign Economic Policy, 1914-1940’, IO Winter 1988.

Culbert, Jay, ‘Wartime Anglo-American Talks and the Making of the GATT’, The World Economy 10 (4), 1987.

Van Dormael, A., Bretton Woods (1978).

Nau, H., The Myth of America’s Decline, part II and III (1990).

Dam, Kenneth, The GATT (1970).

Diebold, W., The End of ITO (Princeton Essays, 1952).

Krugman, Paul, and Obstfeld, Maurice, International Economics, ch.19 (4th edn., 1994).

Bretton Woods Commission, Bretton Woods: Looking to the Future (1994).

Gowa, J., Closing the Gold Window (1983).

Calleo, David, The Imperious Economy (1982).

Triffin, R., Gold and the Dollar Crisis (1961).

Gilbert, M., The Quest for World Monetary Order (1980).

Solomon, R., The International Monetary System, 1945-81 (1982).

Week 2. Market integration through Politics and the Courts

Case: The European Single Market as the paradigm case

Questions:

a)  What are the different biases (or ‘preferred factors’) of alternative theories European integration? How do they relate to IR and IPE theories in general?

b)  What where the different phases towards the completion of the European Single Market? What actors or forces were the driving force behind each of these phases? Specifically: why do authors disagree over the causal factors that led to the Single European Act and the implementation of the ‘Europe 1992’ project? How much influence did supranational leadership and entrepreneurship have on the final outcome? What was the role of multinational business? How much can simply be explained through intergovernmental bargaining? Is this confirmation of neo-functionalist predictions? How would we know?

c)  What are the problems associated with applying the principle of mutual recognition in the European Union?

Required Reading:

For this session students should familiarize themselves (to the extent possible!) with the relevant portions of The Treaties Establishing the European Communities, 1987 and Treaty on European Union (also known as the Maastricht Treaty). The treaties are available online at http://ue.eu.int/amsterdam/en/traiteco/en/main.htm.

Also, do visit the EU site (http://europa.eu.int/), in particular on the single market.

Those with very little background: For a very general introduction to the EU you may want to read: William Wallace, The Transformation of Western Europe (Royal Institute of International Affairs, 1990) OR William Wallace, Regional Integration, Brookings, 1994

Analyzing the Single Market

Moravcsik, The Choice for Europe, pp 314-378. For a detailed story of ‘Europe 1992’.

Egan, Michelle, Constructing a European Market, OUP, 2001 (chapters 1 and conclusion)

Nicolaïdis, Kalypso, ‘Mutual Recognition of Regulatory Regimes: Some Lessons and Prospects’, Regulatory Reform and International Market Openness (Paris OECD Publications, 1996). Repr. as part of the Jean Monnet Paper Series, Harvard Law School, 1997. Skip pp. 13-19.

Majone, Giandomenico, ‘ The Rise of Statutory Regulation in Europe,’ and ‘ The European Commission as Regulator,’ Regulating Europe (1996), pp. 47-82. Skim.

Nicolaïdis, Kalypso and Michelle Egan ‘Regional Policy Externality and Market Governance: Why Recognize Foreign Standards?’ w/, in Journal of European Public Policy, August 2001 [read EU part up to p463].

Theory

Pollack, ‘International Relations Theory and European Integration’ JCMS, June 2001.

Mattli, Walter, The Logic of Regional Integration, pp 19-40.

Weiler, ‘Journey to an Unknown Destination: A Retrospective and Prospective of the European Court of Justice in the Arena of Political Integration’ in Journal of Common Market Studies, Vol 31, n4, Dec 1993. OR Weiler, Joseph, ‘The Transformation of Europe’ in Yale Law Journal, 100/8, 2403-83.

Kenneth Armstrong and Simon Bulmer, The Governance of the Single European Market (1998), pp. 13-89 and 276-318; (read chapters on case studies according to your particular interest).

Recommended readings

Laffan et al, Europe’s Experimental Union, Ch 4.

Keohane, Robert, and Stanley Hoffmann, ‘Institutional Change in Europe in the 1980s’, in The New European Community, ch. 1.

Tsoukalis, Loukas, The New European Economy Revisited (2nd edn., 1997), skim pp. 33-40 , read 61-78.

Egan, Michelle, Constructing a European Market, OUP, 2001 (chapters 1-6; toy directive and conclusion).

Mayes, The Evolution of the Single Market, Elgar 1997.

Pierson, Paul, ‘The Path to European Integration: A Historical- Institutionalist Analysis’ in Sandholtz and Stone Sweet, European Integration and Supranational Governance (1998)

Pelkman, Jacques, European Integration, chs. 5-10 –This is for more detailed economic analysis.

Moravcsik, Andrew, ‘Preference and Power in the European Community: A Liberal Intergovernmentalist Approach’, in Simon Bulmer and Andrew Scott (eds.), Economic and Political Integration in Europe (1995), pp. 29-80.

Stone Sweet, and Sandholtz, ‘Integration, Supranational Governance, and the Institutionalization of the European Polity’ in Sandholtz and Stone Sweet, European Integration and Supranational Governance (1998).

Nicolaïdis, Kalypso and Raymond Vernon, ‘Competition Policy and Trade Policy in the European Community,’ in Edward Graham (ed.), Competition Policy in a Changing World Economy (1997).

Ross, Georges, Jacques Delors and European Integration (1995), pp. 16-50 and 227-247.

Dinan, Desmond, Ever Closer Union? (1994), pp. 39-64, 199-201, 206-227, 325-333.

Stevens, Christopher, ‘EU Policy for the Banana Market: The External Impact of Internal Policies,’ in Wallace and Wallace (eds.), Policy-Making, pp. 325-351.

Duff, Andrew, ‘The Main Reforms,’ Maastricht and Beyond, Andrew Duff et al. (eds.), pp. 36-52.

Moravcsik, Andrew, ‘Negotiating the Single European Act,’ in Keohane and Hoffman (eds.), The New European Community, ch. 2..

Moravcsik, Andrew, The Choice for Europe: Social Purpose and State Power from Messina to Maastricht (1998), ch. 3, pp. 159-237.

Wallace, Helen, and Alasdair Young, ‘The Single Market: A New Approach to Policy,’ in Wallace and Wallace (eds.), Policy-Making, pp. 125-155.

Haas, Ernst B., ‘Technocracy, Pluralism and the New Europe,’ in Joseph S. Nye (ed.), International Regionalism: A Reader (1968), pp.149-166. [Also can be found as Stephen R. Graubard (ed.), A New Europe? (1964), pp. 62-8.

Muttimer, D., ‘1992 and the Political Integration of Europe: Neo-Functionalism Reconsidered.’

Sandholtz, W., and J. Zysman, ‘1992: Recasting the European Bargain,’ in A. Bressand, ‘Futures for Economic Integration,’ in O’Neill (ed.), Politics, pp. 283-287, 300-306, 311-314.