IPE Theories

							IPE Theories
The Realist Perspective
Time-tested School of Thought
     Thucydides (471-400 b.c.)
         the first IR/realist work The History of the
          Peloponnesian War
             on wars between the Greek city-states
Popularity among world powers
  (influencing foreign policy decisions)
        US: a hegemonic power for much of the 20th
         century
        USSR: military weakness invites aggresion
        PRC: China must have nuclear capability to deter
         aggression from the West & the USSR
The Realist Perspective
Time-tested School of Thought
Popularity among world powers
Weakness of Realism in the subfield of IPE
     Realist theory was based more on politics & history
      rather than on economics.
     Realist theory focuses too much attention on
      security matters rather than on economic issues.
Two strains of realism
     Machiavelli realism
         Expanding military power is more important to the Prince
          than the acquisition of wealth.
             Military strength can bring wealth.
The Realist Perspective
Two strains of realism
     Machiavelli realism
     Thucydides/Mercantilist realism
         Thucydides: the Greek city-state wars are attributable to
          economic changes, trade growth and rise of new
          commercial powers

              Wealth is an important source of military power.
              “War is a matter not so much of arms as of money,
              which makes arms of use.”
         Mercantilists: Wealth expansion should be the goal of the
          states that intend to enlarge their military capabilities.
The Realist Perspective
Basic Tenets of Realism
     International system
         Anarchy, lack of a centralized power exercising authority
          over states
         Self-help, each state taking care of own survival and
          well-being
     Nation-states
         the principal/unitary/rational actors of
          international system
         Obsessed with the challenge of national survival and
          security
         Obsessed with the need to enlarge national power to
          defend sovereignty and independence
The Realist Perspective
Basic Tenets of Realism
     International system
     Nation-states
     Societal groups
         Non-state actors operate within the rubrics of state politics
         Limited influence over the actions of the states.
     International Economic Relations & Power Politics
         A state‟s power position in the international system
          determines its foreign policy
         Aggressive states may use the international economy to
          pursue imperialist expansion or extend their power
         A hegemonic state with dominant power & influence is
          likely to defend the status quo of the system
The Realist Perspective
Basic Tenets of Realism
     International Economic Relations & Power Politics
     Other arguments
         Powerful states can structure economic relations at the
          international level
         Globalization is a myth; if globalization does exist, states
          remain the dominant actors and allow such a process to
          happen.
         Major powers can close or open world markets and they
          can use globalization to improve their power positions vis-
          à-vis smaller & weaker states
         A hegemonic state has the ability to create an open and
          stable economic order that can further the globalization
          process.
The Realist Perspective
Mercantilists & Economic Nationalism
  When: 1500-1750
  Main arguments:
        state power based on size of national wealth
        Acquisition of wealth is a means of gaining power
Post-mercantilist economic nationalism
   When: 1750-1850
  Main arguments:
        Industrialization was a central requirement for
         countries seeking to gain national security, military
         power & economic self-sufficiency
The Realist Perspective
Post-mercantilist economic nationalism
  Main arguments:
        National security and independence requires economic
         growth that gives priority to industrial development,
         economic self-sufficiency, state intervention and trade
         protectionism
        Manufacturing was more essential for diversifying the US
         economy and decreasing its vulnerability to external forces.
         (Alexander Hamilton (1755-1804) and his Report on the
         Subject of Manufactures)
        Imposition of trade barriers, promotion of national unity,
         and development of „human capital‟ are key to a national
         rise in wealth and power.
         (Friedrich List, The National System of Political Economy)
The Realist Perspective
The Rise of Realist IPE
  When: 1970s-1980s
  What triggered the realist IPE:
     1.   Decline of Cold War, disarray in the global economy forced
          many realists to look beyond security issues
     2.   Realists could not remain silent to the liberal and Marxist
          economic analysis of IPE.
     3.   Major changes in the post-war economic system such as
          the rise of the OPEC, relative decline of the US economic
          hegemony, increasing friction & competition between US &
          other DCs; and the onset of the debt crisis
The Realist Perspective
Hegemonic Stability Theory
  When: 1970s-1980s
  Central arguments:
        A global hegemon contributes to economic openness
         and world stability
            International economic system (IES) is most likely to be
             open and stable when there is a single dominant or
             hegemonic state
        A hegemonic power is one that:
            Has a sufficiently large share of resources that it is able
             to provide leadership
            Is willing to pursue policies necessary to create and
             maintain a liberal economic order
            Whose decline in power is likely to undercut economic
             openness
The Realist Perspective
Hegemonic Stability Theory
  When: 1970s-1980s
  Central arguments:
        A global hegemonic power helps maintain an open and
         stable economic system by:
            Creating and maintaining liberal international regimes
                Sets of implicit or explicit principles, norms, rules
                 and decision-making procedures
            Providing public goods and rewards and the use of
             coercion to encourage compliance and punish rule-
             breaking behaviors.
The Realist Perspective
Hegemonic Stability Theory (HST)
  Critics of the HST
        Can generalizations be drawn about hegemonic
         behavior based on the experiences of two global
         hegemons during limited historical perioods?
        What constitute a hegemonic power and how to
         measure its power?
        On what ground can HST claim that a hegemon
         contributes to economic openness and global
         stability?
The Realist Perspective
Defining a hegemonic power
  1.   Robert Gilpin‟s realist definition
       a hegemonic power is one that is capable of controlling
       or dominating the lesser states in the international
       system.
  2.   Immanuel Wallerstein's definition
       a hegemon is one that possesses such a predominant
       power that enables it to impose its rules and wishes (or
       by using veto power) in the economic, political, military,
       diplomatic and even cultural arenas.
  3.   Gramscian definition
       Hegemony is viewed as a complex web of ideas that
       social groups use to assert their legitimacy and authority
             hegemony of ideas such as capitalism
The Realist Perspective
Three Types of Hegemon
     A benevolent hegemon
         The hegemon is benovolent in both goals and means.
         It is more concerned about promoting generalized benefits
          than its self-interest.
         It uses rewards rather than threats to ensure compliance.
     A coercive hegemon
         is exploitative
         exerts leadership out of self-interest
         is more inclined to use coercion to extract compliance
     A third hegemon
         Pursues general as well as self interest
         More inclined than the benevolent hegemon to use coercion
         More inclined than the coercive hegemon to use rewards.
The Liberal Perspective
Main Arguments
    Individual Freedom
      Individuals have natural rights that cannot be infringed upon
       by groups or state
      Individual freedom is vital for the pursuit of political and
       economic interest
      Individual endeavor benefits the society as a whole

       State or social groups should stay out of individual decision-
       making
   Int‟l Economic Relations
       Int‟l groups such as IMF and World Bank are
        politically neutral
       If states conform to their rules, they will all grow
The Liberal Perspective
Main Arguments
   Int‟l Economic Relations
       The int‟l economic system benefits all as long as
        states are willing to pursue rational liberal
        economic policies.
       The roadblock to development is low efficiency and
        lack of freedom, not distributional disparity
        between the North and South.
       Today‟s LDCs have advantages the DCs did not
        have when the latter were taking off
          LDCs have access to capital and technology from DCs
      Globalization contributes to growth of LDCs if they
       follow open and liberal policies.
The Liberal Perspective
Main Arguments
   Politics & Economy
       Politics and economics are two separate &
        autonomous realms
       Government should not interfere with domestic &
        int‟l economic transaction
       Government‟s role should be limited to
         Creating a favorable business environment
         Providing public goods
         National defense
The Liberal Perspective
Adam Smith & Orthodox Liberalism
     Adam Smith (1723-1790)
         Advocated laissez-faire economics
             Opposed mercantilist policies
         Advocated freely operating markets based on a division of
          labor
             Free market with division of labor maximizes efficiency &
              prosperity
         Called for eliminating barriers of mercantilist states so that
          goods can be exchanged across national borders
         Free trade is important because nations are
          interdependent on one another.
The Liberal Perspective
John Maynard Keynes & Keynesian Liberalism
     John Maynard Keynes (1883-1946)
         Advocated state intervention at times of economic
          downturn spiral
         Opposed extreme levels of economic nationalism
         Argued that self-interest and public interest do not always
          converge as Adam Smith suggested
         Argued that market did not tend inherently toward a
          socially beneficial equilibrium.
         Argued for government intervention to create demand at
          time of sluggish economy
         Placed less emphasis on specialization and int‟l trade
         Argued that import restrictions may be necessary to
          bolster domestic employment
The Liberal Perspective
Interdependence Theory
   Main Arguments:
     Advances in transportation, communications & technology are
      negating distinction between internal & external policies
     States are losing some autonomy in managing their own affairs
      because of growing economic interdependence
     Cooperation among states is the best response to the new
      situation

  Richard Cooper: The Economics of Interdependence (1968)
      Interdependence can be asymmetrical
         A less dependent state has more power in the relationship
      Interdependence can be complex
      Robert Keohane and Joseph Nye
The Liberal Perspective
Interdependence Theory
   Main Assumptions
      States are not unitary actors
      States are not the only important actors in IR
      Military means are not always useful for promoting national
       interests
      IR includes both inter-state and domestic issues, intermestic


The Prisoners‟ Dilemma & Int‟l Cooperation
      The Prisoners‟ Dilemma
          Each is motivated to defect rather than cooperate
          Each strives for sub-optiomal outcome rather than best collective
           outcome
       Cheating by states is prevalent and hinders cooperation.
The Liberal Perspective
The Prisoners‟ Dilemma & Int‟l Cooperation
      The Prisoners‟ Dilemma
       Cheating by states is prevalent and hinders cooperation.
       A hegemon or international orgazations can solve the defection
        problem. How?
          A hegemon prevents cheating by rewards or coercions
          Int‟l organizations prevent cheating by enforcing rules,
           punishing cheaters, and making public state policies
              A state in the global economy is less likely to cheat
               because of the inevitability of retaliation
The Historical Structuralist Perspective
       Basic Tenets of the Perspective
         The concept of class and class dichotomy
            The oppressing class v the oppressed class
            State=agent of the dominant class
            State reflecting and serving the interests of the dominant
             class
            State to be eliminated as a tool of class exploitation only
             through proletarian revolution by eliminating private
             ownership & class distinctions
         Inter-state economic ties
            Zero-sum game
            Conflictual
                Between the advanced contries & LDCs
                Among the advanced countries
The Historical Structuralist Perspective
Dependency Theory
  A theory to explain development of Latin American countries
  Main Arguments
      On the source of LDC underdevelopment
       External factors hinder development in the South
      On domestic elites (compradores)
         Served as intermediatories between capitalist int‟l order
          and the subjected local people
         Allied with the elites in the capitalist states to maintain the
          pattern of LDC dependency
      On potential of LDC development
         Little potential because development of the capitalist
          economies in the core required the underdevelopment of
          the periphery
The Historical Structuralist Perspective
Dependency Theory
  A theory to explain development of Latin American countries
  Main Arguments
     On potential of LDC development
         LDCs cannot develop as long as they have links with the core.


Dependent Development Theory
  A theory to explain away development in East Asia
  Main Arguments
         Some LDCs can develop when a particularly favorable
          alliance forms between foreign capital, domestic capital,
          and the LDC.
         The alliance allows some development in LDCs.
         Yet, LDCs and NICs are fundamentally dependent
         Their development is conditioned by the needs in the core.
         Workers in NICs are low paid; NIC produce low end goods
The Historical Structuralist Perspective
World System Theory
   Main Arguments
      Modern world system (the main unit of analysis)
          It is a world economic system
      Components of the world system
          Core states
          Periphery states
          Semi-periphery states
      Mobility of states is possible
          Countries have moved from periphery up to core
              USA, Japan
          Countries have moved from periphery to semi-periphery
              Mainland China, Taiwan, Singapore, South Korea…
          Yet, upward mobility is rare
      The unique role of semi-periphery
          Unity of the periphery is undermined
The Historical Structuralist Perspective
World System Theory
   Main Arguments
      The unique role of semi-periphery
          Unity of the periphery is undermined
              Semi-peripheral states tend to think they are better off than the
               peripheral states rather than worse off than the core states
              Semi-peripheral states are both exploiters and exploited
          Core-dominated system is thus stabilized
      The core states dominate the system
          They set market rules for transnational transactions
          They use force to enforce the rules when peripheral states
           challenge the rules
          They impose unequal exchange relations on weaker states
          They appropriate surplus of the whole world economy