Drezner – Global Political Economy Syllabus1
DHP P217
Global Political Economy
Fall 2006
Professor Daniel Drezner
The Fletcher School
Tufts University
OVERVIEW
Most people think that the goal in international relations theory is the identifying the causes of war. Well, they’re wrong. Violence represents only a tiny fraction of global interactions. On the other hand, international regimes, nation-states, non-governmental organizations, and transnational corporations are constantly involved in economic exchange. Individuals have traded goods across territorial borders since the dawn of the city-state. Over time, individuals, firms, and states have altered their economic relations with each other, in response to changes in technology, ideology, and the distribution of power. What determines the direction, magnitude, governance, and fluctuation of these cross-border flows?
This course surveys the theories and issue areas of the global political economy, both in the current day and in the past. The first section of the course will evaluate the existing concepts and theories used to explain the variations in economic exchange over time. For example, the levels of global trade and capital flows were extremely high prior to World War I, sunk rapidly during the interwar period, increased after World War II, and exploded after the end of the Cold War. What causes these fluctuations in the international system? I have organized this section into a series of debates (systemic/domestic, ideas/interests) so as to better distinguish what these range of theories have in common and where they diverge.
The second section surveys various issue areas of the global political economy as a testing ground for the theories discussed in the first section. The issue areas that will be examined include: world trade, monetary orders, global finance; foreign direct investment; and intellectual property rights. The goal of this section is threefold. First, you will actually have some facts to use in your arguments. Second, it should give you an opportunity to use the analytic tools provided in the first section. Third, it will help illuminate the feedback mechanisms that exist in the global political economy. Just as the global political economy is determined by the behavior of states, firms, and individuals, changes in the global economy affect these actors as well. There are myriad forms of the feedback effects between actors and outcomes in the global economy, many of which are addressed by comparative political economists.
The third section will look at topics of current debate in the global political economy to see whether the theories and models discussed previously can explain what’s going on. How does our current understanding of the global political economy explain the political response to offshore outsourcing? The U.S. trade deficit? The Doha round?
COURSE REQUIREMENTS
This is a course that examines the political inputs that affect economic outcomes. I'm therefore assuming a basic grounding in economic theory on your parts. It is strongly recommended that you take or have taken EIB E200 – Introduction to International Trade and Finance. This means I'm expecting you to read terms like comparative advantage or fixed exchange rate and understanding what those terms mean. I've listed Krugman and Obstfeld's textbook as one of the optional textbooks. It is the best starting point for understanding international economics. To repeat: this is not an economics course. Rather, it is a course that asks how political actors cope with the logic of free and governed markets, and how capitalism in turn shapes and affects these political actors.
A note about the readings. This is a combined lecture and seminar course for M.A.L.D. students. This means that I expect you to have done all of the readings in advance and that you are prepared to discuss them in class. I place great importance on this: you will note that 35% of your grade is determined by your class participation. Read all of the assigned materials before class meets. I am aware that this is not the only course you will be taking this quarter, and I have really, really tried to keep the number of pages per week down. Scanning the syllabus, you will probably believe this claim to be insincere, but trust me, there is a lot that is being left out.
You will have one paper to write, and I’m giving you a choice: either a literature review on a topic not covered in the thirteen weeks, or a discussion of a current issue in the global political economy and how well existing theories explain this case. Either way, clear your topic with me before you start. Let me repeat that: CLEAR YOUR PAPER TOPIC WITH ME BEFORE YOU START.
On the literature review: I’m looking for a paper (with attached bibliography) that should not exceed 7,500 words. The review should present the theories or issues you have researched, as well as a critique of the literature and what questions remain unanswered. For samples of what I’m looking for, look through “Reflection and Reappraisal” section of any issue of International Studies Review. You can choose from the list below or come up with your own idea, but, one last time, CLEAR YOUR PAPER TOPIC WITH ME BEFORE YOU START. Possibilities include:
Strategic trade theoryThe European Union
The political economy of exchange ratesEconomic security
Private authority in the global economySecond image reversed
Postmodernism and the global economyInterdependence and conflict
Economics and international lawDependency theory
Strong and weak states in the global economyNGOs and the global economy
The Asian financial crisisHegemonic stability theory
Long waves in the global political economyWorld systems theory
Finally, there will be a take-home final that you will schedule. This is open-book and open-note, and is intended to be relatively painless. All told, your grade in this course will be determined as follows:
Class participation35%
Paper35%
Final exam30%
THE READINGS
Required books
David Baldwin, ed., Neorealism and Neoliberalism: The Contemporary Debate (New York: Columbia University Press, 1993).
Daniel W. Drezner, U.S. Trade Strategy: Free Versus Fair (New York: Council on Foreign Relations Press, 2006).
Jeffry Frieden and David Lake, eds., International Political Economy, 4th edition (New York: Wadsworth, 1999).
Robert Gilpin, Global Political Economy: Understanding the International Economic Order (Princeton: Princeton University Press, 2001).
Peter Katzenstein, Robert Keohane, and Stephen Krasner, eds., Exploration and Contestation in the Study of World Politics (Cambridge: MIT Press, 1999).
Recommended books
Jeffry Frieden, Global Capitalism (New York: W.W. Norton, 2006).
Paul Krugman and Maurice Obstfeld. 1997. International Economics: Theory and Policy. Fourth Edition. Boston: Addison-Wesley.
COURSE OUTLINE
PART ONE: THEORETICAL APPROACHES
I: How is political economy different from the study of other aspects of world politics? (9/7)
Gilpin, Global Political Economy, chapters one (chapters four and five are optional).
Jacob Viner, “Power Versus Plenty as Objectives of Foreign Policy in the Seventeenth and Eighteenth Centuries,” World Politics 1 (October 1948): 1-29.
Charles Lipson, “International Cooperation in Economic and Security Affairs,” in Baldwin.
SEPTEMBER 12th – NO CLASS
II: Operationalizing power and authority in the global political economy (9/14 – 9/19)
Joseph Nye, “Soft Power,” Foreign Policy 80 (Fall 1990): 153-171.
Stephen D. Krasner, “Global Communications and National Power: Life on the Pareto Frontier,” in Baldwin.
Ian Hurd, “Legitimacy and Authority in International Politics,” International Organization 53 (Spring 1999): 379-408.
Daniel W. Drezner, “The Hidden Hand of Economic Coercion.” International Organization 57 (Summer 2003): 643-659.
Michael Barnett and Raymond Duvall, “Power in International Relations,” International Organization 59 (January 2005): 39-75.
James March and Johan Olsen, “The Institutional Dynamics of International Political Orders,” in Katzenstein, Keohane, and Krasner.
III: Contending Approaches: Realism vs. Liberalism (9/21)
Robert Axelrod and Robert Keohane, Achieving Cooperation Under Anarchy: Strategies and Institutions,” in Baldwin.
Joseph Grieco, “Anarchy and the Limits of Cooperation,” in Baldwin.
Michael Mastanduno, “Do Relative Gains Matter? America's Response to Japanese Industrial Policy,” in Baldwin.
IV: Contending Approaches: Systemic vs. Domestic (9/26-9/28)
Gilpin, Global Political Economy, chapter seven
Jeffry Frieden, “Sectoral Conflict and U.S. Foreign Economic Policy, 1914-1940,” International Organization 42 (Winter 1988): 59-90.
David Lake. 1983. International Economic Structures and American Foreign Economic Policy, 1887-1934. World Politics 35: 517-543.
Robert Putnam, “Diplomacy and Domestic Politics: the Logic of Two-level Games,” International Organization 42 (Summer 1988): 427-460.
John W. Meyer, “Globalization: Sources and Effects on Nation States and Societies.” International Sociology 15 (June 2000).
Andrew Moravcsik, “Taking Preferences Seriously: A Liberal Theory of International Politics,” International Organization 51 (Autumn 1997): 513-553.
V: Contending Approaches: Ideas vs. Interests (10/3-10/5)
John Gerard Ruggie, “International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order,” International Organization 36 (Spring 1982): 379-415.
G. John Ikenberry and Charles Kupchan, “Socialization and Hegemonic Power,” International Organization 44 (Summer 1990): 283-315.
Judith Goldstein, “Ideas, Institutions, and American Trade Policy,” International Organization 42 (Winter 1988): 179-217.
Peter Haas, “Introduction: Epistemic Communities and International Policy Coordination,” International Organization 46 (Winter 1992): 1-35.
Martha Finnemore and Kathryn Sikkink, “International Norm Dynamics and Political Change,” in Katzenstein, Keohane, and Krasner.
VI: Contending Approaches: State-Based vs. Non-State Actors (10/10-10/12)
Paul Wapner, “Politics Beyond the State: Environmental Activism and World Civic Politics,” World Politics 47 (April 1995): 311-340.
Ann Marie Clark, Elizabeth Friedman, and Kathryn Hochstetler, “The Sovereign Limits of Global Society,” World Politics 51 (October 1998): 1-35.
Kal Raustiala, “States, NGOs, and International Environmental Institutions.” International Studies Quarterly 41 (December 1997): 719-740.
Anne-Marie Slaughter, “The Real New World Order,” Foreign Affairs 76 (September/October 1997): 183-197.
Daniel W. Drezner, All Politics is Global, chapters 1-3.
PART TWO: ISSUE AREAS
VII: Trade, part one (10/17-10/19)
Gilpin, Global Political Economy, chapter eight.
Stephen D. Krasner, “State Power and the Structure of Foreign Trade,” in Frieden and Lake, ed.
Barry Eichengreen, “The Political Economy of the Smoot-Hawley Tariff,” in Frieden and Lake.
Michael Hiscox, “Class Versus Industry Cleavages: Inter-Industry Factor Mobility and the Politics of Trade,” International Organization 55 (Winter 2001): 1-46.
Ronald Rogowski, “Commerce and Coalitions: How Trade Affects Domestic Political Alignments,” in Frieden and Lake.
Arthur Stein, “The Hegemon’s Dilemma: Great Britain, the United States, and the International Economic Order,” International Organization 38 (Spring 1984): 355-386.
David Lazer, “The Free Trade Epidemic of the 1860s and Other Outbreaks of Economic Discrimination,” World Politics 51 (July 1999): 447-483.
VIII: Trade – part two (10/24-10/26)
Edward D. Mansfield and Marc L. Busch, “The Political Economy of Nontariff Barriers: A Cross-National Analysis,” in Frieden and Lake.
Judith Goldstein and Lisa L. Martin, “Legalization, Trade Liberalization, and Domestic Politics: A Cautionary Note,” International Organization 54 (Summer 2000): 219-248.
Cletus Coughlin, Alex Crystal, and Goeffrey Wood, “Protectionist Trade Policies: A Survey of Theory, Evidence, and Rationale,” in Frieden and Lake.
Helen Milner and Keiko Kubota, “Why the Move to Free Trade? Democracy and Trade Policy in the Developing Countries,” International Organization 59 (January 2005): 107-143.
Glen Biglaiser and Karl DeRouen, “The Expansion of Neoliberal Economic Reforms in Latin America,” International Studies Quarterly48(September 2004): 561-578.
Jude C. Hays, Sean D. Ehrlich and Clint Peinhardt, “Government Spending and Public Support for Trade in the OECD: An Empirical Test of the Embedded Liberalism Thesis,” International Organization 59 (January 2005): 473-494.
IX: Monetary orders (10/31-11/2)
Gilpin, Global Political Economy, chapters nine and ten.
Lawrence Broz, “The Domestic Politics of International Monetary Order: The Gold Standard,” in Frieden and Lake.
Barry Eichengreen, “Hegemonic Stability Theories of the International Monetary System,” in Frieden and Lake.
Benjamin J. Cohen, “The Triad and the Unholy Trinity: Problems of International Monetary Cooperation,” in Frieden and Lake.
Jeffry A. Frieden, “Exchange Rate Politics,” in Frieden and Lake.
Wesley W. Widmaier, “The Social Construction of the ‘Impossible Trinity’: The Intersubjective Bases of Monetary Cooperation,” International Studies Quarterly 48(June 2004): 433-453
George E. Shambaugh, “The Power of Money: Global Capital and Policy Choices in Developing Countries,” American Journal of Political Science 48 (April 2004): 281-295.
X: Financial policy coordination (11/5-11/12)
Michael Webb, “International Economic Structures, Government Interests, and International Coordination of Macroeconomic Adjustment Policies,” International Organization 45 (Summer 1991): 309-42.
Ethan Kapstein, “Between Power and Purpose: Central Bankers and the Politics of Regulatory Convergence.” International Organization 46 (Winter 1992): 265-287.
John Goodman and Louis Pauly, “The Obsolescence of Capital Controls?” in Frieden and Lake.
Beth Simmons, “The International Politics of Harmonization: The Case of Capital Market Integration,” International Organization 55 (Summer 2001): 589-620.
Daniel Drezner, All Politics is Global, chapter five.
XI: Foreign Direct Investment (11/14)
Gilpin, chapter eleven
Louis Pauly and Simon Reich, “National Structures and Multinational Corporate Behavior: Enduring Differences in the Age of Globalization,” International Organization 51 (Winter 1997): 1-30.
Mitchell Bernard and John Ravenhill, “Beyond Product Cycles and Flying Geese: Regionalization, Hierarchy, and the Industrialization of Asia,” World Politics (1995): 173-209.
XII: Intellectual Property Rights (11/16)
Aseem Prakash and Susan Sell, “Using Ideas Strategically: The Contest Between Business and NGO Networks in Intellectual Property Rights,” International Studies Quarterly 48 (Spring 2004): 143-175
Kenneth C Shadlen, Andrew Schrank, and Marcus Kurtz, “The Political Economy of Intellectual Property Protection: The Case of Software,” International Studies Quarterly49(January 2005),45-71.
Drezner, All Politics is Global, chapter seven.
PART III: CURRENT TOPICS
XIII: Offshore outsourcing (11/21)
Daniel W. Drezner, “The Outsourcing Bogeyman.” Foreign Affairs 83 (May/June 2004): 22–34.
Alan Blinder, “Offshoring: The Next Industrial Revolution?” Foreign Affairs 85 (March/April 2006): 113-128.
Richard Freeman, “Are Your Wages Set in Beijing?” in Frieden and Lake.
XIV: Bretton Woods II (11/28)
Owen F. Humpage, “A Hitchhiker’s Guide to the U.S. Current Account Problem.” Federal Reserve Bank of Cleveland, October 2004.
Ben Bernanke, “The Global Savings Glut and the U.S. Current Account Deficit.” Homer Jones Lecture, St. Louis, MO, April 14, 2005.
David H. Levy, and Stuart S. Brown. “The Overstretch Myth.” Foreign Affairs 84 (March/April 2005): 2–7 (and response by Setser and Roubini).
Barry Eichengreen, “Global Imbalances: The New Economy, Dark Matter, the Savvy Investor, and the Standard Analysis,” Journal of Policy Modeling, forthcoming.
XV: Trade in the 21st Century (11/30)
Daniel W. Drezner, U.S. Trade Strategy, all.
XVI: The Global Political Economy of Energy Markets (12/5)
G. John Ikenberry, “The State and Strategies of International Adjustment,”World Politics 39, (October 1986): 53-77
Joshua S. Goldstein, Xiaoming Huang, and Burcu Akan, “Energy in the World Economy, 1950–1992,” International Studies Quarterly41(June 1997): 241-266.
Michael L. Ross, “The Political Economy of the Resource Curse,” World Politics 51 (January 1999): 297-322.
Thomas Friedman, “The First Law of Petropolitics,” Foreign Policy (May/June 2006):
XVII: Review Session and/or new topic (12/7)