Intro to International Relations
Intro to International Relations Poli Sci 175
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This 10 page Class Notes was uploaded by Erin Butler-Córdova on Tuesday January 26, 2016. The Class Notes belongs to Poli Sci 175 at University of Wisconsin - Milwaukee taught by in Fall 2015. Since its upload, it has received 12 views. For similar materials see Intro to International Relations in Political Science at University of Wisconsin - Milwaukee.
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Date Created: 01/26/16
What is Interdependence? : Interdependence: Situations characterized by reciprocal effects among countries or among actors in different countries (Keohane and Nye 1987, 730) o Implies that the actions of states, and significant non- state actors, will impose costs on other members of the system (Keohane and Nye 1987, 730) Foreign policy: how to benefit from international exchange while maintaining as much autonomy as possible. Liberalism: Concerned with: what should be Int’l environment: anarchic Actors: unitary states, groups, NGOs, IGOs, MNCs Actors seek: peace, wealth Assumes: economic incentives will always be more desirable than security; peace and prosperity over war. Incentives = rational. Outcomes from: economic prosperity, concern with human rights, shared institutions *****Mechanisms: economic interdependence (commerce), democracy, institutions War from: power of arms, power of alliance, power of money International system: how to generate and maintain a mutually beneficial pattern of cooperation in the face of competing efforts/interests Social Theories: Constructivism o Interests defined: through interaction o Interaction in focus: b/w the individual actor (person, group, state) and environment (including other actors) o Outcomes from: context shapes identities -> identities shape interests -> interests produce outcomes Other theories: o Constuctivism o Marxism o Postmodernism o Feminism o Peace studies IPE and International Trade- IPE- concerns the social, political, and economic arrangements affecting trade, distribution, etc. Result of human decisions taken in the context of institutions and sets of structural lf-set rules and customs. International trade: underscores the interdependence of states despite political disagreements. o Policy domain- rules, policies, and regulations produced by governments and IGOs. Public sector primacy. o Material domain- the private actor is the main player in the simultaneous pursuit of wealth and power. International Monetary System: a web of IOs, policies, and agreements through which currencies and credits are calculated. o Policy domain o Material domain 5 Basic Characteristics of Global Economy: 1 Dynamic interaction b/w politics and economics. 2 Simultaneous pursuit of wealth and power. 3 Public- private Nexus- intermingling of public activities, focused first on power and second on wealth, and private activities, centered first on wealth and second on power. 4 Global interdependence. 5 Domestic conditions of political- economic stability and change influence behavior in global political economy. Approaches to IPE: Economic Nationalism: the idea that the state should harness and use the country’s economic strength to further national interests. o Modern manifestations: a Imperialism and neo-imperialism b Economic incentives and disincentives c Protectionism and domestic economic support. o Characteristics: Those who subscribe to this approach are not, and cannot be, true capitalists. Economic nationalists want to interfere in and/or control the economy. Marked by policies designed to protect domestic industries from foreign competition, by tariffs, etc. o Primary Theory: Mercantilism Economic Internationalism: seeks to separate politics from economics. o Modern manifestations: a Capitalism b Laissez-faire economics and free trade o Characteristics: Oppose tariffs, trade barriers, and government subsidies. Favor removing the state from the economic control; self-regulating economy. Few adherents; existing forms are modified to include IGOs that regulate competition and unequal distributions of wealth. o Primary theory: economic liberalism Economic Structuralism: The conduct of world politics is based on the way that the world is organized economically. o Modern manifestations- a Haves and have-nots b Rentier states; north-south gap (haves exploiting have-nots) o Primary theory: Marxism (also dependency theory) 2 Dominant IPE Theories: in detail: Mercantilism: Most similar foundation- realism Actors- states Beliefs- a Each state protects its own interests at the expense of others b IOs are not a framework for mutual gains c The importance of economic transactions lies in their military implications; economic outcomes matter for military power d Economics should serve politics as wealth underlies state power e Trade is desirable only when the distribution of benefits favor home state over rivals. Emphasize- a Relative power, not a state’s absolute amount of wellbeing, but its positions relative to rival states. b Conflicting interests Goal: to create the most favorable distribution of wealth through balance of trade. Best for Understanding- macroeconomics Economic Liberalism: Most Similar Foundation: Liberalism Key Actors: Individual households and firms Beliefs: a Cooperation produces common gains. b Shared interests in economic exchanges. c Markets and market competition produces stable patterns and prices; reducing sources of leverage, making power diffuse. d Free trade e Borders hinder market efficiency and free trade f Governments should not interfere; helping only to create market efficiency Emphasize: a Absolute wealth; relative power does not matter, what matters is a state’s power in absolute terms. b Interdependence promotes peace. Goal: create a maximum total of wealth by achieving optimal efficiency. Best for understanding: microfinance Free Trade: Liberal International Economic Order: the post-WWII int’l economic order embodying the traditional liberal preference for free and open trade as a means of promoting economic efficiency and prosperity. The US sought to establish a regime in which the impediments to the movement of capital and goods were minimized. Thus, we see the creation of: o World bank o IMF o GATT -> WTO: to reduce the int’l tariffs to the lowest possible level. Why move to a liberal economic order? o Great Depression: marked by economic nationalism (ever increasing tariffs and quotas) to shield their domestic industries from foreign competition. Economic nationalism -> depression, fascism -> war WWII: the US had the only intact industrial economy meaning that they could produce products where no one else could; US could charge whatever it wanted t/o concern for competition. More trade = more buyers. 2 Int’l components of free trade: o Division of Labor: states do not (and should not) produce everything they need and want. Why not?: For there to be a division of labor, trade is necessary o Comparative Advantage: the idea that all nations benefit when they trade those commodities that each produces most efficiently. Theory of Comparative advantage? o Explains why states engage in int’l trade even when one;s country’s workers are more efficient at producing every single good then workers in other countries o If 2 states that are capable of producing 2 commodities engage in the free market, each country will increase it overall consumption by exporting the good for which it has the comparative advantage and importing the other good. Occurs when one country can produce a good at a lower opp. Cost than another country. Why trade? Comparative Advantage: occurs when one country can produce a good ant a lower opportunity cost than another country. o Results from differences in factor endowments, and technological process. o Factor endowments: land, labor, capital Free Trade: Link Between Free Trade and Comparative Advantage: Comparative advantage results in efficiency, lower prices, production orients to market (supply and demand) The idea behind the theory is that all nations benefit when they produce those commodities that each produces most efficiently. Free trade allows nations and consumers to benefit from their different comparative advantages. From the standpoint of economic theory, tariffs and other barriers to imports are bad because they distort the market. In a free market, prices convey info to consumers about who is producing a commodity most efficiently (cheaply); this results in lower prices and thus consumers tend to buy those lower priced items. So when people argue: free trade keeps prices low, but protectionism keeps job- both are correct. This, how do states choose between the 2? Benefits: o free trade promotes economic efficiency o Diffuse benefits Challenges: o Completely open free trade has never been achieved. o All states impose tariffs and other restrictions o Nontariff barriers: policies designed to inhibit trade and imports without imposing direct tariffs on imports o Free rider problems Effects of Free Trade: Importing Cheap Goods: o Prices remain low o Inflation remains low o Consumers spend more $, Employment goes up o Short term job loses o Longer-tern wage gaps. o Decrease incentives to address HR violations o Decreased incentives for safe environmental practices o Production orients marketing Graph: Too much demand = high prices Surplus = layoffs, factory closures, etc. Selecting the Balance: High demand- production increases; to meet demand Low Supply: lower the supply of a good, the more a company can charge for it. High Supply: As demand drops, goods flood the market. Given that those goods were made at a cost, companies must try to unload these goods for whatever price they can get. Why Interfere? Int’l trade occurs in the world market; no world gov’t owns industries, provides subsidies, or regulates prices. Political Interference in the form of: Long term benefits may incur short term costs. Newly imported goods may disrupt economies o Jobs o Non-convertible capital o Uneven distribution of a wealth within a state; political consequences. Incomplete info To protect infant industries Interfering levels the playing field, allowing non-competitive home business the opportunity to exist and/or become competitive Strategic trade policy; using trade policy to enhance national power and leverage over others. Market imperfections: deviations from a free market. o Include political intrusions o Reduce efficiency Forms of Interference: Monopoly; oligarchy (290) Corruption Taxation (tariffs) Nontariff barrier o Quotas o Subsidies o Regulations Sanctions Cartels Policy-Based Interference: Protectionism: Infant Industries o The new industry may never be competitive o Creation = political reality Strategic Industries: o We are less likely to share info (via trade) on industries vital to our security Developing Nations and the Problems of Underdevelopment: o Fair trade to equalize the playing field Chronic Trade Imbalances Free Trade vs Fair Trade: Fair trade is based on the understanding that some states are more disadvantaged than others. Three visions: Free Rider Problem: States enjoy access to foreign markets, but do not allow others access to their market. o Should we demand reciprocity and punish if it is not given? Wealthy Nations vs Impoverished Nations: Implementing trade policies to promote human rights (HR); only trade with those who meet min. safety requirements for their workers. Giving the Option to Consumers: some products are now being labeled as fair trade. Those items come from poorer countries and also come at a cost over market value. o It is expected that wealthier consumers will make buying decisions based on values not just on price. Institutional Oversight: WTO: General Agreement on Tariffs and Trade (GATT) o Developed in 1947 o 23 states agreed to bilateral concessions; formed the basis of GATT. o Provides for multilateral negotiations on reducing tariffs and trade barriers. GATT -> WTO o Based in reciprocity, most favored nation principle o WTO has formal decision- making World Bank o Founded in 1944 o Founded at UN Monetary fund and financial conference in Bretton Woods, NH o Established to support reconstruction efforts in Europe after WWII. o Evolved into a bank of loans that allowed Global South countries to borrow loans at lower interst rates; now has strong development forces. Decision-Making: o Decision made by board of governors IMF: o Founded 1944 bretton woods conference o US pushed for an institution focused on currency exchange o Functions to maintain currency exchange stability by promoting int’l monetary cooperation and orderly exchange arrangement. o Serves as lender in financial crisis Operations: o Derives funds from 187b member states o Financial constitutions based on quotas Multinational Corporations (MNCs) o A type of NGO referring to business enterprises organized in one society with activities in other societies growing out of direct investment abroad. Possesses resources, capital; thus, power. o Modern Movements: A shift toward outsourcing- relocating headquarters and/or ops to locations where wages and costs are lower but skills are substantial. Increasingly influential as primary agents of the globalization of production. Some efforts toward social responsibility, sustainability, and HR promotions. Trade and the Economy: Autarky Capitalized economics Centrally planned (command) Mixed economics
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