International Political Economy

496 Pages·2003·1.74 MB·English

INTERNATIONAL
POLITICAL
ECONOMY
PERSPECTIVES ON
GLOBAL POWER
AND WEALTH
FOURTH EDITION
Jeffry A.Frieden
Harvard University
David A.Lake
University of California, San Diego
London and New York
For Bedford/St. Martin’s
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First published 2000 by Bedford/St. Martin’s. Simultaneously published and distributed
outside North America by
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and representatives throughout the world.
This edition published in the Taylor & Francis e-Library, 2003.
Library of Congress Catalog Card Number: 99–62343
Copyright © 2000 by Bedford/St. Martin’s
All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or
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Acknowledgments
Acknowledgments and copyrights appear at the back of the book on pages 471–473, which
constitute an extension of the copyright page.
It is a violation of the law to reproduce the selections in this book by any means whatsoever
without the written permission of the copyright holder.
PREFACE
The readings in International Political Economy: Perspectives on Global Power
and Wealth are primarily intended to introduce the study of international political
economy to those with little or no prior knowledge of it. The book is designed for
use in courses in international political economy, international relations, and
international economics. The selections present both clear and identifiable theoretical
arguments and important substantive material. Fifteen of the 31 articles are new
to this fourth edition of our book, and the theoretical approach has been updated
to reflect the changing state of both the world and the field of international political
economy.
Although the selections can be read in any order, they are grouped in seven
parts, which reflect some of the more common organizing principles used in
international political economy courses. Each part begins with an introduction by
the editors that provides background information and highlights issues raised in
the readings. Each reading is preceded by an abstract summarizing its specific
arguments and contributions. The readings were edited to eliminate extraneous or
dated information, and most footnotes were removed.
The introduction defines the study of international political economy,
summarizes major analytical frameworks in the field, and identifies several current
debates. In earlier editions, the introduction and readings were largely structured
around three analytic perspectives: Realism, Marxism, and Liberalism. This
framework is substantially downplayed in this edition. The field of international
political economy has made significant progress over the last two decades, and
this division—while useful as a pedagogic device—has become increasingly
obsolete. To capture the most important work and current debates in the
international political economy, we now highlight the analytic tensions between
international and domestic explanations, on the one hand, and institutionalist-
and society-centered explanations, on the other. These two dimensions create
four distinct views, which we refer to as the international political, international
economic, domestic institutionalist, and domestic societal approaches. Part I
presents examples of these different perspectives on international political
economy. The readings in this part are intended to suggest the underlying logic
and types of arguments used by proponents of each approach. Although they
are representative of their respective schools, they do not necessarily capture
the wide range of opinion within each approach.
iii
iv Preface
Part II, which reviews the history of the international economy since the
nineteenth century, provides the background and perspective necessary to understand
the contemporary international political economy. The selections describe the major
developments in the history of the modern international economy from a variety
of different theoretical viewpoints.
The remainder of the book is devoted to the modern international political
economy. Separate sections on production, money and finance, and trade look at
the principal broad issue areas associated with the politics of international economic
relations. Part VI focuses on the particular political and economic problems of
developing and transitional economies. Finally, Part VII examines current problems
in the politics of international economics.
The selections in this volume have been used successfully in our courses on
international political economy at the University of California, Los Angeles; Harvard
University; and the University of California, San Diego (UCSD). In our own
research, we approach the study of international political economy from very
different perspectives. Yet we find that this set of readings accommodates our
individual approaches to the subject matter while simultaneously covering the
major questions of the field.
For this edition, Patricia Lindenboim and Michael Spence at Harvard and Angela
O’Mahony at UCSD provided valuable research and editorial assistance. Leslie
S.Connor of Stratford Publishing Services prepared the manuscript for publication.
We want to thank our respective spouses, Anabela Costa and Wendy K.Lake, for
their continuing encouragement.
Jeffry A.Frieden
David A.Lake
CONTENTS
Preface iii
About the Editors ix
Introduction: International Politics and International Economics 1
I
CONTENDING PERSPECTIVES ON INTERNATIONAL
POLITICAL ECONOMY 17
1 State Power and the Structure of International Trade 19
STEPHEN D.KRASNER
2 The Political Economy of the Smoot-Hawley Tariff 37
BARRY EICHENGREEN
3 Institutions and Economic Growth: A Historical Introduction 47
DOUGLASS C.NORTH
4 States, Firms, and Diplomacy 60
SUSAN STRANGE
II
HISTORICAL PERSPECTIVES 69
5 The Rise of Free Trade in Western Europe 73
CHARLES P.KINDLEBERGER
6 International Trade, Domestic Coalitions, and Liberty:
Comparative Responses to the Crisis of 1873–1896 90
PETER ALEXIS GOUREVITCH
v
vi Preface
7 International Investment and Colonial Control:
A New Interpretation 109
JEFFRY A.FRIEDEN
8 British and American Hegemony Compared:
Lessons for the Current Era of Decline 127
DAVID A.LAKE
III
PRODUCTION 141
9 The Multinational Enterprise as an Economic Organization 145
RICHARD E.CAVES
10 Third World Governments and Multinational Corporations:
Dynamics of Host’s Bargaining Power 156
SHAH M.TARZI
11 “A New Imperial System”? The Role of the
Multinational Corporations Reconsidered 167
DAVID FIELDHOUSE
12 Strategic Trade and Investment Policies: Implications
for the Study of International Political Economy 180
JEFFREY A.HART AND ASEEM PRAKASH
IV
MONEY AND FINANCE 193
13 The Domestic Politics of International Monetary Order:
The Gold Standard 199
LAWRENCE BROZ
14 Hegemonic Stability Theories of the
International Monetary System 220
BARRY EICHENGREEN
15 The Triad and the Unholy Trinity:
Problems of International Monetary Cooperation 245
BENJAMIN J.COHEN
16 Exchange Rate Politics 257
JEFFRY A.FRIEDEN
17 EMU: Why and How It Might Happen 270
CHARLES WYPLOSZ
Preface vii
18 The Obsolescence of Capital Controls?
Economic Management in an Age of Global Markets 280
JOHN B.GOODMAN AND LOUIS W.PAULY
V
TRADE 299
19 Protectionist Trade Policies: A Survey of Theory,
Evidence, and Rationale 303
CLETUS C.COUGHLIN, K.ALEC CHRYSTAL, AND GEOFFREY E.WOOD
20 Commerce and Coalitions: How Trade Affects
Domestic Political Alignments 318
RONALD ROGOWSKI
21 The Political Economy of Trading States:
Factor Specificity, Collective Action Problems,
and Domestic Political Institutions 327
JAMES E.ALT AND MICHAEL GILLIGAN
22 Are Your Wages Set in Beijing? 343
RICHARD B.FREEMAN
23 The Political Economy of Nontariff Barriers:
A Cross-national Analysis 353
EDWARD D.MANSFIELD AND MARC L.BUSCH
24 Explaining Business Support for Regional Trade Agreements 366
RONALD W.COX
VI
ECONOMIES IN DEVELOPMENT AND TRANSITION 377
25 International Development: Is It Possible? 383
JOSEPH E.STIGLITZ AND LYN SQUIRE
26 Development: The Market Is Not Enough 392
ROBIN BROAD, JOHN CAVANAGH, AND WALDEN BELLO
27 Globalization and Inequality, Past and Present 405
JEFFREY A.WILLIAMSON
28 Inflation and Stabilization 417
STEPHAN HAGGARD
viii Preface
VII
CURRENT PROBLEMS IN INTERNATIONAL
POLITICAL ECONOMY 431
29 Environmental Protection and Free Trade:
Are They Mutually Exclusive? 433
ALISON BUTLER
30 Globalization and the Changing Logic of Collective Action 446
PHILIP G.CERNY
31 Sense and Nonsense in the Globalization Debate 461
DANI RODRIK
INDEX 471
ABOUT THE EDITORS
Jeffry A.Frieden (Ph.D., Columbia University) is professor of government at
Harvard University. He specializes in the political economy of international monetary
and financial relations. His book publications include Debt, Development, and
Democracy: Modern Political Economy and Latin America, 1965–1985 (Princeton:
Princeton University Press, 1991) and Banking on the World: The Politics of
American International Finance (New York: Harper & Row, 1987), which has
been issued in both Japanese and British editions.
David A.Lake (Ph.D., Cornell University) is professor of political science at
the University of California, San Diego, and coeditor of the journal International
Organization. He has published widely in the field of international relations
and international political economy. His principal book publications include
Power, Protection, and Free Trade: International Sources of U.S. Commercial
Strategy, 1887–1939 (Ithaca: Cornell University Press, 1988) and Entangling
Relations: American Foreign Policy in its Century (Princeton: Princeton
University Press, 1999).
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