Political Science 222 Notes:
Global Political Economy
WEEK 1: Introduction to the Course & the Nature of GPE:
Chapter 2: IPE and its methods
1. What is GPE?
2. What methods are used to study GPE? How do they differ from one another?
3. How has globalisation impacted on research priorities in GPE?
4. What are the assumptions of O’Brien and Williams (2016) approach to GPE?
Lecture Notes:
● What is GPE?
○ Emerged in the mid-1970s as a subfield of IR.
○ Why was this a significant time:
■ Nixon shock: economic policy shift in USA; end of Bretton Woods system; move
US dollar off gold standard; easier to manage money in some ways.
■ Arab-oil embargo: ramification of Arab-Isreali war; retaliation for US supporting
Israeli military.
■ Increasing demand for interdependence: states cooperating; strengthening UN.
■ Non-state actors emerging with more weight.
○ It is interdisciplinary in nature: tries to bridge the divide between politics & economics.
○ Concerned with:
■ Development of States
■ Relationships between States
■ Obsessed with globalisation (process of interaction)
○ Referred to as GPE or IPE –Terms used interchangeably.
● The bridging of the divide:
○ Economics:
■ Dominated by Neo-classical Economics.
■ Concerned with the allocation of resources.
■ Efficient operation of markets.
■ Based on rationality, not emotions (unlike politics).
■ Politics is a hindrance to the economy & the Free Market.
, ○ NB! Keynesian Economics:
■ Government is crucial to a well-functioning economy.
■ Government spending is needed to move states out of recession
○ Political Science:
■ Power.
■ Decision-making influenced by argument, ideology, threat of violence etc - all
involve POWER.
■ Focus on institutions: states, governments etc.
○ International Relations (IR:
■ Emerged in the aftermath of WW1.
■ Understand the cause of the war.
■ Highly focused on issues of war and conflict.
■ Realism: “the lack of any overreaching power in the international system
(anarchy) and the continuous competition for power between states”
● Moving to GPE:
○ Political Economy:
■ Integrates Political Science and Economics ( to an extent).
■ NB! Figures: Adam Smith, Karl Marx, David Ricardo
■ Oxford Handbook of Political Economy: the methodology of economics applied
to the analysis of political behaviour and institutions.
● “The unit of analysis is the individual and that individual follows a
rational decision-making behaviour to maximise their goals.”
○ Important Figures in Political Economy:
■ Adam Smith:
● Wealth of Nations (1776)
● “Our individual need to fulfil self-interest results in societal benefit, in
what is known as his "invisible hand”
● This, combined with the division of labour in an economy, results in a
web of mutual inter-dependencies that promotes stability and prosperity
through the market mechanism.
● Smith rejects government interference in market activities, and instead
states governments should serve just 3 functions: protect national
borders; enforce civil law; and engage in public works (e.g., education).
■ Karl Marx:
, ● Critique of the political economy of capitalism.
● The inequality of the world is linked to the functioning of capitalism.
● Root cause of social and economic inequality = capitalism.
● Understanding GPE thus far:
○ Just Politics of Just Economics is not sufficient
○ GPE demands an interdisciplinary approach
○ “The whole point of studying IPE rather than IR is to extend more widely the
conventional limits of the study of politics…” - Susan Strange
○ Understand GPE in terms of wealth vs. power
■ Politics: Power as the ability to produce intended effects (tends to ignore wealth
as power) / IR
■ Economics: scarcity, distribution, consumption (tends to ignore power as
determining economic decisions)
■ GPE: Wealth as power (disparities in wealth between nations)
○ “[IPE is] the set of international and global problems that cannot usefully be understood
or analysed as just international politics or just international economics.” – Michael
Veseth
○ “Since most economic questions are notoriously political, and almost all political
questions involve some economic considerations, one cannot describe issues any more as
‘purely economic’ or as ‘purely political’. Both are both.” – Susan Strange
○ Interplay between the state, market and society
○ The State: IPE challenges IR notions of states and power by suggesting that states can
lose power to, for example, market actors
○ The Market: efficiency vs. power
○ Society: what role does society and its values and beliefs play?
Textbook Notes:
Locating the Field:
● International political economy = IPE: the academic field of study examining the interaction of
economic and political phenomena across state borders & the history of economic and political
activity across state borders.
● Global political economy = GPE: the environment from the last quarter of the 20th century until
today; an era where states, corporations and citizens struggle to order their environment in a
world characterised by intensified globalisation.
, ○ How economic and political environments of the world interact with each other.
○ NB: look at how information is conveyed to you.
● Three usual approaches to IPE: economic nationalist, liberal, critical.
● IPE is a distinct subfield of international relations; in recent years, analysis has shifted from a
concern with interdependence to an obsession with globalisation.
● The specialisation of knowledge in the social sciences corresponded with the solidification of
nationstates in western Europe. In some respects this made sense: national states were becoming
more developed and their regulatory activity was having an increasingly significant impact on the
people within the hardening borders. However, this methodological nationalism meant that the
connections between societies and their relationship to the outside world were neglected. IPE
tries to bridge some of these historic divides. It crosses the boundaries between the study of
politics and economics, as well as the national and the international.
● Approaches to economics:
○ Neoclassical economists: seek to fashion their subject into a science and separate it from
the study of politics and philosophy; view government intervention as inefficient.
○ Keynesian economists: see government as crucial to a well-functioning economy.
○ Institutional economists: markets are not ‘natural’ but are the result of a series of
institutions such as the legal structure, the financial system and social values; thus the
discipline should focus on the real world.
○ The field of economics brings many useful ideas and concepts to the study of GPE. Key
theories explaining macroeconomics, comparative advantage, supply and demand and the
operation of markets can explain particular events and have informed the actions of
decision makers.
● Political science: despite disparities in the field, many political science studies share a number of
common characteristics: concerned with power or the ability of one set of actors to have their
preferences implemented (different from economists: individualistic); focus on institutions,
especially the government (neoclassical economists: operation of the market).
○ As a result of this perspective, political science brings a number of elements to the study
of GPE: the focus on power, the state and the welfare of particular communities (as
opposed to all communities).
● Political economy:
○ The term ‘political economy’ has meant a number of different things to different people
over time; within the mainstream, it can mean an attempt to integrate politics and
Global Political Economy
WEEK 1: Introduction to the Course & the Nature of GPE:
Chapter 2: IPE and its methods
1. What is GPE?
2. What methods are used to study GPE? How do they differ from one another?
3. How has globalisation impacted on research priorities in GPE?
4. What are the assumptions of O’Brien and Williams (2016) approach to GPE?
Lecture Notes:
● What is GPE?
○ Emerged in the mid-1970s as a subfield of IR.
○ Why was this a significant time:
■ Nixon shock: economic policy shift in USA; end of Bretton Woods system; move
US dollar off gold standard; easier to manage money in some ways.
■ Arab-oil embargo: ramification of Arab-Isreali war; retaliation for US supporting
Israeli military.
■ Increasing demand for interdependence: states cooperating; strengthening UN.
■ Non-state actors emerging with more weight.
○ It is interdisciplinary in nature: tries to bridge the divide between politics & economics.
○ Concerned with:
■ Development of States
■ Relationships between States
■ Obsessed with globalisation (process of interaction)
○ Referred to as GPE or IPE –Terms used interchangeably.
● The bridging of the divide:
○ Economics:
■ Dominated by Neo-classical Economics.
■ Concerned with the allocation of resources.
■ Efficient operation of markets.
■ Based on rationality, not emotions (unlike politics).
■ Politics is a hindrance to the economy & the Free Market.
, ○ NB! Keynesian Economics:
■ Government is crucial to a well-functioning economy.
■ Government spending is needed to move states out of recession
○ Political Science:
■ Power.
■ Decision-making influenced by argument, ideology, threat of violence etc - all
involve POWER.
■ Focus on institutions: states, governments etc.
○ International Relations (IR:
■ Emerged in the aftermath of WW1.
■ Understand the cause of the war.
■ Highly focused on issues of war and conflict.
■ Realism: “the lack of any overreaching power in the international system
(anarchy) and the continuous competition for power between states”
● Moving to GPE:
○ Political Economy:
■ Integrates Political Science and Economics ( to an extent).
■ NB! Figures: Adam Smith, Karl Marx, David Ricardo
■ Oxford Handbook of Political Economy: the methodology of economics applied
to the analysis of political behaviour and institutions.
● “The unit of analysis is the individual and that individual follows a
rational decision-making behaviour to maximise their goals.”
○ Important Figures in Political Economy:
■ Adam Smith:
● Wealth of Nations (1776)
● “Our individual need to fulfil self-interest results in societal benefit, in
what is known as his "invisible hand”
● This, combined with the division of labour in an economy, results in a
web of mutual inter-dependencies that promotes stability and prosperity
through the market mechanism.
● Smith rejects government interference in market activities, and instead
states governments should serve just 3 functions: protect national
borders; enforce civil law; and engage in public works (e.g., education).
■ Karl Marx:
, ● Critique of the political economy of capitalism.
● The inequality of the world is linked to the functioning of capitalism.
● Root cause of social and economic inequality = capitalism.
● Understanding GPE thus far:
○ Just Politics of Just Economics is not sufficient
○ GPE demands an interdisciplinary approach
○ “The whole point of studying IPE rather than IR is to extend more widely the
conventional limits of the study of politics…” - Susan Strange
○ Understand GPE in terms of wealth vs. power
■ Politics: Power as the ability to produce intended effects (tends to ignore wealth
as power) / IR
■ Economics: scarcity, distribution, consumption (tends to ignore power as
determining economic decisions)
■ GPE: Wealth as power (disparities in wealth between nations)
○ “[IPE is] the set of international and global problems that cannot usefully be understood
or analysed as just international politics or just international economics.” – Michael
Veseth
○ “Since most economic questions are notoriously political, and almost all political
questions involve some economic considerations, one cannot describe issues any more as
‘purely economic’ or as ‘purely political’. Both are both.” – Susan Strange
○ Interplay between the state, market and society
○ The State: IPE challenges IR notions of states and power by suggesting that states can
lose power to, for example, market actors
○ The Market: efficiency vs. power
○ Society: what role does society and its values and beliefs play?
Textbook Notes:
Locating the Field:
● International political economy = IPE: the academic field of study examining the interaction of
economic and political phenomena across state borders & the history of economic and political
activity across state borders.
● Global political economy = GPE: the environment from the last quarter of the 20th century until
today; an era where states, corporations and citizens struggle to order their environment in a
world characterised by intensified globalisation.
, ○ How economic and political environments of the world interact with each other.
○ NB: look at how information is conveyed to you.
● Three usual approaches to IPE: economic nationalist, liberal, critical.
● IPE is a distinct subfield of international relations; in recent years, analysis has shifted from a
concern with interdependence to an obsession with globalisation.
● The specialisation of knowledge in the social sciences corresponded with the solidification of
nationstates in western Europe. In some respects this made sense: national states were becoming
more developed and their regulatory activity was having an increasingly significant impact on the
people within the hardening borders. However, this methodological nationalism meant that the
connections between societies and their relationship to the outside world were neglected. IPE
tries to bridge some of these historic divides. It crosses the boundaries between the study of
politics and economics, as well as the national and the international.
● Approaches to economics:
○ Neoclassical economists: seek to fashion their subject into a science and separate it from
the study of politics and philosophy; view government intervention as inefficient.
○ Keynesian economists: see government as crucial to a well-functioning economy.
○ Institutional economists: markets are not ‘natural’ but are the result of a series of
institutions such as the legal structure, the financial system and social values; thus the
discipline should focus on the real world.
○ The field of economics brings many useful ideas and concepts to the study of GPE. Key
theories explaining macroeconomics, comparative advantage, supply and demand and the
operation of markets can explain particular events and have informed the actions of
decision makers.
● Political science: despite disparities in the field, many political science studies share a number of
common characteristics: concerned with power or the ability of one set of actors to have their
preferences implemented (different from economists: individualistic); focus on institutions,
especially the government (neoclassical economists: operation of the market).
○ As a result of this perspective, political science brings a number of elements to the study
of GPE: the focus on power, the state and the welfare of particular communities (as
opposed to all communities).
● Political economy:
○ The term ‘political economy’ has meant a number of different things to different people
over time; within the mainstream, it can mean an attempt to integrate politics and
