Global Political Economy - cuni.cz

1 Global Political EconomyGlobal Political EconomyUNDERSTANDING THEINTERNATIONALECONOMICORDERR obert GilpinWITH THE ASSISTANCEOFJean M. GilpinPRINCETON UNIVERSITY PRESSPRINCETON AND OXFORDC opyright 2001 by Princeton University PressPublished by Princeton University Press, 41 William Street,Princeton, New Jersey 08540In the United Kingdom: Princeton University Press, 3 Market Place, Woodstock,Oxfordshire OX20 1 SYAll Rights ReservedLibraryofCongressCataloging-in-P ublicationDataGilpin, Political Economy : understanding the international economic order /Robert Gilpin with the assistance of Jean M. bibliographical references and 0-691-08676-1 (alk.)

2 Paper) ISBN 0-691-08677-X (pbk.)1. International economic relations. 2. Free trade. 3. International Technological innovations Economic aspects. 5. Economic Gilpin, Jean M. II..G5516 2001337 dc2100-051684 This book has been composed in paper used in this publication meets the minimum requirements of (R 1997) (Permanence of Paper) in the United States of America by Princeton University Press,Princeton & Oxford1098765432110987654321(Pbk.)Conten tsList of Abbreviations and AcronymsixPrefacexiONE. The New Global Economic Order3 Changes in the World Economy5 Intellectual Perspectives13My Perspective: State-centric Realism15 Purpose of Economic Activity23 Conclusion24 TWO.

3 The Nature of Political Economy25 What You Seek Is What You Find31 The Nature of an Economy38 Embeddedness of the Economy41 Conclusion45 THREE. The Neoclassical Conception of the Economy46 The Discipline of Neoclassical Economics46 Nature of a Market54 Method of Comparative Statics57 Intellectual Limitations60 Economists and Public Policy69 Comparison of Economics and Political Economy74 Conclusion76 FOUR. The Study of International Political Economy77 Distribution of Wealth and Economic Activities78 National Autonomy80 The Politics of International Regimes82 Theory of Hegemonic Stability93 Governance of the Global Economy97 Conclusion102 FIVE.

4 New Economic Theories103 Change and Neoclassical Economics104 World View of the New Theories106vCONTENTSThe New Theories108 Conclusion127 SIX. The Political Significance of the New Economic Theories 129 National Governments and Domestic Economies129 Oligopoly and Power in Economic Outcomes132 Technological Innovation135 Convergent and Divergent Economic Growth141 Conclusion147 SEVEN. National Systems of Political Economy148 Differences among National Economies149 The American System of Market-Oriented Capitalism150 The Japanese System of Developmental Capitalism156 The German System of Social Market Capitalism168 Significance of National Differences174Is One System Superior to the Others?

5 175Do Nations Compete with One Another?180 Convergence, Harmonization, or Mutual Recognition?183 Conclusion195 EIGHT. The Trading System196 The Debate over Free Trade198 Trade and the Economy202 Revisions of Conventional Trade Theory206 Postwar Trade Regime217 The Uruguay Round and World Trade Organization221 New Threats to an Open Trading System224 Conclusion232 NINE. The International Monetary System234 The Postwar International Monetary System235 The End of Fixed Exchange Rates238 The Financial Revolution and Monetary Affairs239 Embedded Technical and Political Issues242 Devising an International Monetary System248 Reform of International Monetary Affairs250 Unity or Fragmentation of the Monetary System?

6 255 Few or Many National Currencies?258 Conclusion259 TEN. The International Financial System261 Partial Globalization of International Finance261 Nature of Financial Crises264 The East Asian Financial Crisis267viCONTENTSC ontroversy over Regulation of International Finance271 Conclusion277 ELEVEN. The State and the Multinationals278 Explanations of FDI and the MNC279 The Multinationals and the International Economy289 Increased Regionalization of Services and Manufacturing292 Debate over the MNC and the Nation-State294An International Regime for FDI and MNCs300Do Global Corporations Pose a Threat?302 Conclusion304 TWELVE.

7 The State and Economic Development305 The Rise and Demise of Development Economics306 Triumph of Neoliberalism309 The Debt Crisis and Structural Adjustment313 Theory of the Developmental State 316 The East Asian Miracle Project321 The East Asian Financial/Economic Crisis329 The Future of the Developmental State331 The Transitional Economies333 Conclusion339 THIRTEEN. The Political Economy of Regional Integration 341 Economic Theories344 Political Theories348An Eclectic Approach358 Conclusion361 FOURTEEN. The Nation-State in the Global Economy362 The Limited Nature of Economic Globalization364 Alleged Consequences of Economic Globalization366 Effectiveness of Macroeconomic Policy369 The Need for a Historical Perspective375 Conclusion376 FIFTEEN.

8 Governing the Global Economy377 Neoliberal Institutionalism379 The New Medievalism390 Transgovernmentalism398 Governance for What?400 Conclusion402 Select Bibliography403 Index411viiAbbreviations and AcronymsADCadvanced developed (or industrialized)countriesAFL-CIOA merican Federation of Labor and Congressof Industrial OrganizationAPECAsia-Pacific Economic CooperationBWSB retton Woods SystemCAPC ommon Agricultural PolicyECLAE conomic Commission for Latin AmericaEECE uropean Economic Community (CommonMarket)EMSE uropean Monetary SystemEMUE conomic and Monetary UnionERME xchange Rate MechanismEUEuropean UnionFDIforeign direct investmentGATTG eneral Agreement on Tariffs and TradeGDPgross domestic productG-7group of seven major developed economiesGroup of 77 coalition of less developed countriesHSThegemonic stability theoryILOI nternational Labor OrganizationIMFI nternational Monetary FundIOinternational organizationIP Einternational Political economyITOI nternational Trade OrganizationLDCless developed countryMITIM inistry of International Trade andInvestment (Japan)

9 MNCmultinational corporationMOFM inistry of Finance (Japan)NAFTAN orth American Free Trade AgreementNATON orth Atlantic Treaty OrganizationNBERN ational Bureau of Economic ResearchNEGnew economic geographyixLIST OF ABBREVIATIONS AND ACRONYMSNIC snewly industrializing countriesNIEsnewly industrializing economiesNGOnongovernmental organizationNIEONew International Economic OrderOCAoptimum currency areaOECDO rganization of Economic Cooperation andDevelopmentOPECO rganization of Petroleum ExportingCountiresR & Dresearch and developmentRTAR egional Trade AgreementSDRS pecial Drawing RightSIIS tructural Impediments InitiativeSTTstrategic trade theoryUNUnited NationsUNCTADU nited

10 Nations Commission for Trade andDevelopmentVERvoluntary export restraintWBWorld BankWTOW orld Trade OrganizationxPrefaceSINCE PUBLICATIONof my book,The Political Economy of Inter-national Relations, in 1987, the internationa leconomy has experi-enced a number of fundamenta changes include theend of the Cold War and the victory of democratic capitalism overauthoritarian communism, the rise of the information or Interneteconomy, and the triumph of neoliberal market-oriented economicideology (deregulation, privatization, and a decreased role for thestate in the Economy ). Important technological advances in telecom-munications, transportation, and information technology have sig-nificantly increased the interdependence of national economies.