Chapter 10 National Economic Competition: The Traditional Road

Theories of International Political Economy Economic Nationalism: Belief that the state should use its economic strength to further national interests. Can do so through colonialism, neocolonialism, protectionism, domestic economic support.

Theories of International Political Economy Economic Internationalism (capitalism, laissez-faire, economic liberalism, free trade): Belief that international economic relations should and can be conducted cooperatively because the international economy is a non-zero-sum game in which prosperity is available to all.

Theories of International Political Economy Economic Structuralism: Belief that economic structure determines politics; argue that he way the world is organized economically determines how world politics is conducted. 1.Marxist Theory 2.Dependency Theory 3.World Systems Theory

Globalization and Interdependence Trade expanding with shrinking world International investments Multinational corporations NGOs Outsourcing

Monetary Relations Increasingly significant in both international and domestic economic health. Exchange rates Globalization of financial services International regulation of money

Economic Patterns Least Developed Countries (LDCs): Southern Hemisphere, less investment opportunities, less stability, extreme poverty, mixed data on some development Economically Developed Countries (EDCs): Northern Hemisphere, more economically active

North and South North economic development declining, resulting in sharpened competition Divergence over political issues South’s Reform Agenda: New International Economic Order (outline p. 294)

Ways to Achieve Economic Goals 1.Tariff Barriers: restrictions on trade and investments; form of protectionism. 2.Non-Tariff Barriers: Health and Safety standard requirements, quotas, administrative requirements.

Ways to Achieve Economic Goals 3.Monetary Barriers: Limit imports, restrict exports. 4.Investment Barriers: prevent control.

Trade and Investment 1.Subsidies 2.Dumping—when company sells product for less abroad than domestically 3.Cartels

Using Economic Means To Achieve Policy Goals National Security Restrictions Economic Incentives Economic Sanctions