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KCA University Group 5: Subject: International Political Economy

This document discusses key concepts in international political economy (IPE), including: 1) IPE examines the interaction between international politics and economics. It focuses on how power operates between states and was illustrated by OPEC's oil embargo in 1973-74. 2) Major IPE theories include realism, liberalism, constructivism, Marxism, feminism, and the English school. Realism examines state power and interests while liberalism considers economic and social influence. 3) International trade and finance involve political decisions around issues like exports, imports, exchange rates, and international institutions that impact state interests. Trade can be used as a foreign policy tool through embargoes.

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25 views

KCA University Group 5: Subject: International Political Economy

This document discusses key concepts in international political economy (IPE), including: 1) IPE examines the interaction between international politics and economics. It focuses on how power operates between states and was illustrated by OPEC's oil embargo in 1973-74. 2) Major IPE theories include realism, liberalism, constructivism, Marxism, feminism, and the English school. Realism examines state power and interests while liberalism considers economic and social influence. 3) International trade and finance involve political decisions around issues like exports, imports, exchange rates, and international institutions that impact state interests. Trade can be used as a foreign policy tool through embargoes.

Uploaded by

Scorpio Girl
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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KCA

UNIVERSITY
GROUP 5
Subject: International
Political Economy

Unit: International Relations


International Economics & Politics
• International Political Economy is important because
the mutual interaction of International Politics and
International Economics is today widely appreciated
and the subject of much theoretical research and
applied policy analysis.
• The international politics focuses on how power
operates within and between states in the international
arena. The rise of the Organization of Petroleum
Exporting Countries (OPEC) and the Arab oil embargo
of 1973-74 illustrated dramatically at least five key
dimensions of International Political Economy.

IE & IP 2
International Political Economy Theories
Major Theories
• Realism – struggle for power & independence i.e. Russia strategic
interests in Syria
• Liberalism – economic & social power also leads to increased
influence other than military power i.e. China & USA rely on
economic & social influence
• Constructivism – states are motivated and influenced by the
behaviors & actions of member states i.e. end of cold war by USA &
Soviet Union by Mikhail Gorbachev

“WHY IS THERE NO INTERNATIONAL THEORY” WRIGHT (1966). 3


International Political Economy Theories
Other Theories
• Marxism – focuses on capitalism by states implementing socialist theories into
their policies i.e. Vietnamese students to study Marxism in exchange for free tuition
• Feminism – argues the concept of power, dominion & security stemming from other
international theories are gender biased. i.e. Hooper “ War made men takers of life
and women as givers”
• English School – combines idea of realism and liberalism & argues that
international political system is more civil and orderly than suggested
• Green Theory – focuses on cross-boundary problems concerning the ecology and
environment & affects interaction between member states i.e. UNCED

“WHY IS THERE NO INTERNATIONAL THEORY” WRIGHT (1966). 4


International Trade
Politics and economics approach international trade from different
points of view.
• The borders of markets are dynamic
• International trade raises many political questions of national interest
• Exports –(Monetary reserves , fears of economic dependency, create
jobs, may affect national security)
• Imports –(Reduce national reserves, threaten domestic business and
labor interest, create dependency , raise complex security issues )
• International trade can be used as a bargaining chip in negotiations
with countries.
• Trade embargoes are economic tool of foreign policy and great deal of
IPE (Embargos restrict trade between countries for a variety of
reasons).

INTERNATIONAL TRADE 5
International Finance
Includes the analysis of the following:
a) Exchange rate policies
b) Foreign exchange systems
c) International capital movements
d) International and domestic institutions in relation to their
political structures.
Examples
• Political implications of international economic institutions e.g.
Bretton Woods.
• IPE of the Euro, single currency adopted by members of the EU
• IPE of International financial crises

INTERNATIONAL FINANCE 6
Hegemony in IPE
• Hegemony.
• The hegemon.
• The theory of hegemonic stability was arguably IPE's most important contribution to
Cold War.
• These public goods include stable money, security and a system of free trade that can
be shared by all.
• The theory of hegemonic stability holds that the world system is most prosperous
when a hegemon exists.
• Public goods Periods of Dutch (1620-72), British (1815-73), and U.S. hegemony (1945-
71) are commonly cited as evidence of this link between hegemony and prosperity.
• When hegemony breaks down, the international system falls into disorder and conflict,
with the resulting decline in peace and prosperity.
• hegemony is a self-limiting, self-defeating, and therefore
temporary condition
• Britain's decline in the 19th century (followed by World War I) is frequently cited as an
example of hegemonic decline as is the collapse of the Bretton Woods system (viewed 7
as the mechanism of US hegemony). The Iron Curtain's fall in 1989.
CAUSES OF UNDER DEVELOPMENT

Underdevelopment means economically poor and


technologically backwardness.

• POVERTY
• UNDERDEVELOPED NATURAL RESOURCES
• UNEVEN DISTRIBUTION OF INCOME
• CORRUPTION
• NATURAL DISASTORS
• POOR GOVERNANCE

NORTH - SOUTH GAP 8


North & South Gap
This is a global social - economic and
political division of (1973) that
exists between wealthy developed
countries known collectively as the
north and poorest developing
countries (least developed
countries) the south.

NORTH - SOUTH GAP 9


Features of Multinational Corporations
1. High turnover and many assets
2. Control
3. Aggressive marketing
4. Technological advantage
5. Management by professionals

MULTINATIONAL CORPORATIONS (MNCs) 10


Advantages of Multinational Corporations

• Improve local infrastructure


• Creates employment opportunity
• Creates available import and export market
• Improves capital inflows
• Reduces the need for foreign Aid
• Diversification

MULTINATIONAL CORPORATIONS (MNCs) 11


Disadvantages of Multinational Corporations

• Monopolistic Markets
• Multinational corporations put SMEs out of business
• Take advantage of the international standards of living.
• Political corruption
• Causes of harm to the environment
• Profits often go back to the multinational company instead of staying in the local
• Importation of skilled labour
• Lack of individual influence
• Dependency of unhealthy business for the economy
• Removal of raw material from local economy
MULTINATIONAL CORPORATIONS (MNCs) 12
The End

13

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