A rchive Date
[ 27-03-2004 ]
Category
[ International Relations ]
sub-Categoy
[ Political Science ]
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[http://www.findarticles.com/cf_dls/m1181/n110/20492569/p1/article.jhtml
International political economy: beyond hegemonic stability
Spring, 1998, by Helen V. Milner
International political economy is a growth industry. Beginning its boom after the oil crises in the 1970s shook both world markets and states, the field now encompasses not only a great deal of political economy but of comparative and international politics as well. The end of the Cold War also helped shift attention to the field's main focus: how markets and states affect one another.
Scholars in the field have tried to explain at least four aspects of the international political economy. First, many of its pioneers thought that economics was too narrow to explain central aspects of the international economy.
Consider one of the more visible theoretical gaps: Although economic theory showed that free trade was optimal, in reality, protectionism characterized most states' trade policies for years. Seeking to explain such paradoxes created by economic theory, scholars have proposed explanations that are more political. In particular, they have emphasized how politics determines the stability and openness of the international economy, a focus inspired by the trauma of the Great Depression in the 1930s and the desire to avoid repeating any such experience.
Second, scholars have focused on explaining states' foreign economic policy choices. In part, many believe that these choices are the most important factor shaping the nature of the international economy. For example, explaining why states choose to protect their economies, or how they set their exchange rates, or why they give foreign aid have been central preoccupations for the field. These explanations, however, have sought to interpret such choices by adducing domestic and international factors as well as economic and political ones.
Third, the field has paid attention to why certain states grow rapidly and develop over time, while others fail to do so or decline. This interest in the changing positions of states in the world economy has also been approached eclectically. Economic causes for such changes are usually supplemented by political ones, while domestic causes of the rise and decline of states are paired with international factors.
Finally, scholars have been interested in the impact of the international economy on domestic politics, an issue often explored under the rubric of the globalization of national economies.
Researchers in this field have generally sought answers to these kinds of questions by looking into four categories of explanatory factors: 1) the distribution of world power, especially the role of a hegemonic state; 2) the structure, function, and consequences of international institutions; 3) the impact of nonmaterialist factors such as ideas and beliefs; and 4) the effect of domestic politics.
DOES HEGEMONY BREED STABILITY?
Robert Gilpin, Stephen Krasner, and other scholars from the realist tradition have identified the distribution of power among states as a central factor in explaining the openness and stability of the international economy. "Hegemonic stability theory," first espoused by Charles Kindleberger in the 1970s, focuses on the role of leading states for example, Great Britain in the nineteenth and the United States in the twentieth centuries - and on how changes in the distribution of capabilities affect the world economy. This theory argued that the overwhelming dominance of one country was necessary for the existence of an open and stable world economy. Such a hegemon served to coordinate and discipline other countries so that each could feel secure enough to open its markets and avoid beggar-thy-neighbor policies. Conversely, the theory asserted that the decline of a hegemon tends to be associated with economic closure, instability, and the creation of competing regional blocs.
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