Routledge Handbook of International Political Economy (IPE)

IPE as a Global Conversation

Mark Blyth

• Publisher: Routledge
• Year: 2009
• ISBN:
  9781135984007
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Business allgemein

The study of the International Political Economy (IPE), like the IPE itself, is plural and unbounded. Despite what partisans sometimes say, rather than there being 'one way' of studying the IPE that is the 'right way', we find across the world great variation in IPE scholarship in terms of focus, questions, and methods. How then can we make sense of this and understand the field as a whole rather than simply learn one part of it?

This Handbook is designed to address precisely this concern. It maps the shifting boundaries and diverse theoretical commitments of IPE around the world. It engages the geographical and theoretical diversity of the different versions of IPE found in North America, the UK, in Asia and Australia; and notes the absences of distinctive versions of IPE in Europe and Latin America. The volume groups together the essential attributes and positions of each school, inviting the reader to engage with and learn about IPE in all of its guises through this evolving 'global conversation.' Rather than adjudicate 'the one true version' of IPE, it argues that the intellectual diversity we see around the world is an essential, and positive, feature of the field.

With over twenty contributors from a wide range of countries Routledge Handbook of International Political Economy is an essential resource for all those with an interest in this complex and rapidly evolving field of study.

Part I North American IPE

1 The multiple traditions of American IPE

DOI: 10.4324/9780203881569-3

Benjamin J. Cohen

International Political Economy (IPE) came late to the United States. Although astute observers had long acknowledged the obvious linkage of economics and politics in global affairs, it was just a few short decades ago that IPE began to emerge as a formal, recognized field of scholarly inquiry with its own standards, concerns, and career opportunities. The birth of American IPE is generally dated from the late 1960s or early 1970s—the result of a conscious campaign to marry the academic specialties of international economics and international relations (IR). What emerged from those early years was by no means a monolithic orthodoxy. From the start American IPE has been characterized by multiple intellectual traditions, reflecting the hybrid nature of the field itself.

Commonalities exist, of course. In the United States, IPE has become essentially a sub-specialty of the study of IR—in effect, a branch of political science. Most scholars working in the American style take for granted that, first and foremost, IPE is about sovereign states and their interactions, as in IR more generally. In the words of one popular textbook, IPE is about “the relationship of the world economy to the power politics among nations” (Lairson and Skidmore 2003: 6). National governments are the core actors. Public policymaking is the main concern. Analysis is directed largely to understanding the sources and implications of state behavior.

Further, most scholarship in the United States tends to hew close to the norms of conventional social science. Priority is given to scientific method—what might be called a pure or hard science model. Analysis is typically based on the twin principles of positivism and empiricism, which hold that knowledge is best accumulated through an appeal to objective observation and the systematic evaluation of evidence. Normative concerns are downplayed and grand theorizing is generally eschewed. Instead, most emphasis is placed on mid-level theory, concentrating on key relationships isolated within a broader structure whose characteristics are unquestioned and assumed, normally, to be given and unchanging. All these commonalities are distinctive enough to warrant designation of a unique “American school” of IPE, in contrast to alternative styles of inquiry that have arisen elsewhere (Cohen 2008b).

Yet for all that is shared in common, the American school rarely speaks with one voice. Within the US-based research community diverse camps have emerged over time, making for lively debate and a fruitful cross-fertilization of ideas. The earliest divide stemmed from natural differences between economics and political science, American IPE’s two parent disciplines. The pioneers of the field in the United States were international economists or students of IR. Though the political scientists, as it turned out, largely predominated in shaping the US version of IPE, the economics profession has always remained influential, particularly in matters of methodology. Additional divides reflect paradigmatic differences, particularly among political scientists.

The aim of this essay is to explore the origins and interactions of American IPE’s multiple traditions. Three themes are stressed: the early capture of the field by political scientists, who took custody of a terrain largely abdicated by economists; the subsequent emergence of the US community’s diverse camps in an ongoing dialectical process of intellectual development; and, most recently, at the level of methodology, the gradual recapture of a good part of American IPE by the research techniques of economics. The field may be young in chronological terms. But it already has a rich and diverse history.

Capture

The origins of the American school go back, first and foremost, to the pioneering efforts of a remarkable generation of political scientists, led by the likes of Robert Keohane and Joseph Nye (1972, 1977), Robert Gilpin (1972, 1975a), Peter Katzenstein (1976, 1978), and Stephen Krasner (1976, 1983). The historical circumstances that triggered a systematic interest in IPE are not difficult to understand. More puzzling is why economists, by and large, so conspicuously absented themselves while the field was being built.

Historical circumstances

The birth of a new field of study does not take place in a vacuum. Particularly in the social sciences, intellectual developments tend to be tied to historical context—to new events and trends that make old ways of thinking inadequate. And so it was with American IPE. Fundamental changes were occurring in the world. Both the politics and the economics of global affairs were mutating, calling for new understandings of how things work and how they might be studied.

Most striking was the remarkable recovery of the European and Japanese economies after the devastation of World War II. By the 1960s, a decisive shift seemed to be taking place in the balance of economic power among industrialized nations. At mid-century, the United States had bestrode the world economy like a colossus. But with its growth rate slowing and its balance of payments mired in deficits, America now looked to be on the brink of decline. Continental Europe and Japan, meanwhile, were roaring back, once again forces to be reckoned with. America’s moment of economic dominance appeared to be just about over. Meanwhile, postwar decolonization had brought new attention to the challenges and dilemmas of economic development. Pressures were mounting for a New International Economic Order that would fundamentally transform the rules governing relations between the wealthy North and the poverty-stricken South.

Behind these changes was a growing interdependence of national economies, which seemed to threaten the ability of governments to manage economic affairs. Year by year, world trade was growing more rapidly than output, bringing greater openness and mutual dependence. And soon financial flows began to accelerate as well with the growth of offshore currency markets—the so-called euro-currency markets—from the late 1950s onwards. By the end of the 1960s it was evident that the spread of international economic activity had reached a critical juncture, soon to be manifest in a breakdown of the Bretton Woods monetary order, rising protectionism, oil shocks, and stagflation. Power now seemed to be slipping from states, limiting their ability to attain critical goals. Yet mainstream economics seemed incapable of providing effective solutions.

Conversely, the salience of national security concerns now appeared in abeyance. This was because of a growing détente between the United States and the Soviet Union, the two nuclear superpowers. For years, the Cold War had held center stage, reaching a dramatic peak in the brinkmanship of the 1962 Cuban Missile Crisis. But by the late 1960s, despite the distractions of the protracted Vietnam conflict, the competing Western and Soviet blocs seemed to be entering a new era of decreased tensions. Détente did not mean that the high politics of war and peace had suddenly lost all relevance; indeed, in the 1980s the Cold War was to intensify once again, as Ronald Reagan declared battle on the “Evil Empire.” But for the time being at least, it provided an opening to political scientists. Students of world politics could now safely divert some of their attention elsewhere—for example, to the politics of the global economy.

Abdication

The new field did absorb elements of international economics, of course. But for Keohane and Nye and others of their generation, IPE seemed most naturally a logical extension of their interest in IR. As one colleague has suggested to me in private correspondence, Keohane and Nye “opened the door for scholars with an IR framework to think systematically about international economic relations.” Soon every self-respecting political science department began to reserve a faculty slot or two for specialists. Every political science curriculum began to feature one if not several IPE courses. Textbooks in the field—once a trickle, now a veritable flood—were targeted directly at students of political science. Effectively, American IPE was captured by political scientists.

The critical question is: Why didn’t economists fight harder for “ownership” of the field? Economists were there at the creation, after all. In fact, most of the field’s earliest work in the United States was by economists, before the political scientists took over. One example, dating back to 1948, was Jacob Viner, who sought to explore the relationship between “power” and “plenty” as objectives of foreign policy. Twenty years later Richard Cooper (1968) published The Economics of Interdependence, highlighting the political challenges posed by the growing connections between national economies. In 1970, there was Power and Money, a short book by Charles Kindleberger (1970) on the growing tension between economic and political activity in an increasingly interdependent world. And in 1971 came Raymond Vernon’s memorable Sovereignty at Bay (1971), which heralded the arrival of the multinational corporation as a key political actor on the global stage. The period also saw the reissue of a long-neglected study by Albert Hirschman, National Power and the Structure of Foreign Trade (1969 [1945]), now rightly regarded as a classic.

Yet once the political scientists arrived on the scene, economists for the most part abdicated. Since the early 1970s, IPE has been a preoccupation only at the fringes of the economics profession. On the conservative right are scholars like Thomas Willett (1988; Willett and Vaubel 1991) who extend so-called public-choice theory to the international arena, following the early lead of Swiss economist Bruno Frey (1984). Public choice is the study of politics using the tools of economic theory; its focus is on implications that can be drawn from the underlying motivations of individuals in the political process. Both members of the general public and government leaders are analyzed as rational, self-interested actors striving to maximize some objective utility function, in a manner analogous to the behavior of individuals and firms in the marketplace. The insights of public choice make a valuable contribution in helping us to evaluate policy outcomes in terms of standard efficiency criteria. But it is also a limited contribution since it makes little serious attempt to incorporate the insights or intuitions of political science into the equation. With its methodological individualism, along with its emphasis on formal modeling, public-choice IPE amounts to little more than an application of traditional economic concepts to decision-making in the global economy. It might best be labeled the microeconomics of international relations.

Conversely, on the radical left are scholars of a more critical persuasion, best represented by the Union for Radical Political Economics (URPE), founded in 1968. URPE’s origins lay in the New Left politics of the turbulent 1960s, driven especially by a revulsion with the war in Vietnam. The group’s aim was to promote a new interdisciplinary approach to political economy, a fresh look at the connections between economics and politics, with particular emphasis on the dynamics and evolution of global capitalism. According to the group’s website, URPE “presents constructive critical analyses of the capitalist system and supports debate and discussion on alternative left visions of a socialist society” (URPE). The value of such an approach lies in its emphasis on the broader historical structures within which political and economic activity takes place. But with its self-conscious iconoclasm and its Marxist overtones, URPE has never managed to exercise much influence on the mainstream of the US economics profession.

Indeed, despite the dramatic changes in the international environment that were evident when American IPE was first getting started, the mainstream of the economics profession remained largely indifferent. The reasons were three-fold: ideological, ontological, and epistemological.

First, there was the chilling effect of postwar anti-communism. Political economy tended to be equated unthinkingly with Marxism or other unacceptable leftist doctrines. By the late 1960s détente may have been melting the ice of the Cold War, reducing tensions between the nuclear superpowers. But even so, the battle to defend the market system went on—a battle in which economists inevitably found themselves on the front lines. Political scientists might be called upon to defend the virtues of democracy, but not capitalism. Economists, on the other hand, could not avoid being drawn into the ongoing contest between Marxism and market liberalism. Apart from the youthful founders of URPE, few American economists at the time had much taste for ideas or arguments that might smack of anti-capitalist sentiment. In any attempt to integrate economic and political analysis, most of the profession saw ideological bias.

Second was a kind of intellectual myopia in the prevailing ontology of economics. Ontology, from the Greek for things that exist, is about investigating reality: the nature, essential properties, and relations of being. In other contexts, ontology is used as synonym for metaphysics or cosmology. In social science, it is used as a synonym for studying the world in which we actually live. What are the basic units of interest and what are their key relationships? Most economists preferred to concentrate their attention on the private sphere, mainly addressing considerations of technical efficiency and economic welfare. They were simply not trained to think in terms of the public sphere—the issues of authority and conflict that are inherent in processes of governmental decision-making. Nor were they comfortable when confronted with the very political question of distribution—how the economic pie gets divvied up.

This created two blind spots. First, the importance of institutions was discounted. In the timeless analytical framework favored by mainstream of the profession, political structures, if considered at all, were introduced only as a constraint on economic activity, with underlying power relationships taken more or less for granted. Conventional economics at the time discouraged any interest in questions concerning how rules or norms are created or how over time they might support or undermine different patterns of economic activity. And second, attention was traditionally directed to the outcomes of policy rather than to its inputs. The aim of theory was to evaluate policy, not explain its origins in the give and take of distributional conflict. An old adage has it that politics is like sausage making: You really don’t want to know what goes into it. Economists took that advice seriously.

Finally, there was resistance to IPE on epistemological grounds. Epistemology, from the Greek for knowledge, has to do with the methods and grounds of knowing. What methodologies do we use to study the world? What kinds of analysis will enhance our understanding? Mainstream economists were understandably hesitant to take up issues that could not be addressed comfortably using the standard toolkit of conventional economics. For a century, especially in the United States, the discipline had been growing increasingly abstract, relying ever more on deductive logic and parsimonious formal models to pare messy reality down to its bare essentials. The style was reductionist. The aim was to uncover core relationships—“to p...

Table of contents

• Cover Page
• Half-Title Page
• Title Page
• Copyright Page
• Table Of Contents
• List of tables
• Acknowledgments
• Introduction: IPE as a global conversation
• Part I: North American IPE
• Part II: British IPE
• Part III: IPE in Asia
• Part IV: IPE elsewhere—exemptions, exclusions, and extensions
• Bibliography
• Index