European Governance Global Governance Introduction to International Political

European Governance, Global Governance Introduction to International Political Economy Kalypso Nicolaidis Vincent Wright Chair, Sciences Po (2005) Oxford University

European Governance => Global governance Our EU-topia? Ø The EU as an actor in its own right : economic giant? Political actor? What kind of power Ø 1) 2) The EU as a possible model of integration between states in the rest of the world At the global level Ø Discourse/reality Ø neo-colonial vs post-colonial?

International Political Economy Questions: Ø How to govern a world which is multipolar economically and unipolar militarily? (eg can we live with the US? ) Ø Can an international system which is a product of US hegemony, and more broadly of western hegemony, be made to serve the interests of developing countries? (eg whose interests? !) Ø Are regionalism and multilateralism contradictory or complementary? (eg. Is the EU hypocritical? )

Questions (cd)… § Should trade be used as an instrument to change domestic governance arrangements, including for instance human and labor rights? (eg is this not economic imperialism? ) § What is the score-sheet of global governance through public-private partnerships? (should we like Bill Gates Global fund? ) § Has globalisation gone too far? (eg. A nos pavés!)

Questions (cd) Ø Check out the website: “making poverty history”! Ø In what ways is the year 2005 - “the year of development”- likely to make a difference ? Ø How can trade be used to combat global poverty?

Questions (cd)… Ø Yahoo 1, 2, 3: Can state sovereignty survive the era of the internet? Ø Can the WTO, IMF and World Bank really be made more democratic? ! Ø “alter-globalization” : good questions…good solutions?

International Political Economy Definitions: Yesterday: • John Stuart Mill “Political Economy teaches a nation how to become rich” : The Wealth of Nations Today: David Lake: “IPE is the study of the interplay of economics and politics in the world arena” Economy: system of producing, distributing and using wealth Politics: set of institutions/rules governing social and economic interactions

IPE - definitions § • Robert Gilpin: “IPE is the study of the Problems and Questions arising from the Parallel Existence and Dynamic Interaction of State and Market. ” § • Both: Separation politics (states) and economics (markets) and mutual influence -> IS THIS ASSUMPTION FRUITFUL? § The IPE as fundamental tension between state power, competing ideas and transnational economic exchange.

IPE theories and their limits • Liberalism : IPE cooperative Limits : markets as political institutions • Marxism: IPE conflictual Limits: modes of accomodation • Realism: IPE conflictual Limits: Prism of the state • Institutionalism: IPE cooperative Limits: socio-economic order of the CW

International Political Economy Some History: • The legacy: Adam Smith, John Stuart Mill, Karl Marx • The Interwar divergence: Professionalisation; micro-economics vs politics of war and peace • The Post-War II incipient debate: - Cold War: Security at the Core -- Economics at the margin; International Economic Rules as given -Understanding the collapse of interwar (ec) order - Politics of IOs: Analysis of the UN and desillusion - post WWII trend towards policy analysis and methodological emphasis; behavioralism

Some History (cd) • The 1970 s: The emergence of IPE as a distinct field of study The Study of the EC and other regions: Integration theory, nefunctionalism (Mitrany, Haas) -> how to account for such high levels of cooperation , voluntary agreements and role of non-state actors -> transnational communities, identity formation, communication (Deutsch) -> The fallacy of pessimistic induction 2) The end of US led global growth: economy is political -> collapse of BW; OPEC: the politics of economic choices -> The NIEO: the politics of the global economic order -> GATT, Japan and the new protectionism: the political economy of trade -> Détente and the political function of ‘low politics’

• The 1970 s (cd) Some History 3) Economic Interdependence and transnational relations : - Disaggregating “the state” (not a unified rational actors): -> Pluralism and bureaucratic politics (Dahl) - Ties across borders not controlled by the state - MNEs (Vernon; Cooper) - Cost and benefit of interdepence for state autonomy (Keohane and Nye) 4) Realists address the challenge - Defense of state-centred paradigm (Gilpin and Krasner) - Hegemonic Stability: Power and liberalism - English school of IPE (Susan Strange) - SUM: IPE through the lenses of liberalism vs realism

Some History (cd) • The 1980 s: IPE takes central stage 1) -> The coming of age of Multinational Corporations 2) –FDI- Enters globalisation -> Explosion of financial sphere; the rise of trade in services -> The Reagan revolution on the neo-liberal ideology -> The advent of structural conditionality; WTO round -> The deepening of economic integration: state policies and regulations in question 2) The new liberal challenge: Regime theory and neo-liberal institutionalism -> role of ideas and shared understandings, expectations - > analogies from economic theory (transaction costs; market failure); game theory as a euristic (Axelrod; Oye) -> Anarchy yes/absence of rules no: commitments and reciprocity -> Rationalist explanations of institutions (Keohane)

Some History (cd) • The 1990 s: PCW meets WWW 1) The end of the CW: Economics trumps security; - change in the character of American leadership (contested); - the use of sanctions as a political tool; The rise of regionalism 2) Globalization and its critics - NGOs and two level games - Technological change and IPE (communication studies) - from state-dominated to market dominated world economy? - Growing linkages between issue areas (trade and aid; environment; trade and health; labor; human rights) - IPE and international law 3) IPE meets political theory - a) The Global Justice agenda - b) the Global democracy and legitimacy agenda - c) From politics of interests to the politics of identity

IPE themes vconflict/cooperation replaces war and peace v. International institutions are norms not places v domestic politics/comparative politics matter

IPE: Framing horizontal questions • WHY? What is the driving force in the global economy? In this case? v. Market competition - Collective search for efficiency v national ambitions and interstate rivalries vtechnology …OR Ideas and values • WHO? Who adjusts? v. Importer/ exporters v. My constituency / your constituency v. Low skill labor in the North/in the South v. EU / candidate countries • FOR WHOM? In Whose Interest? Great power; Collective; those in need

International Political Economy Caveat emptor (Ce que je crois) -> An actor-centred “good story” -> liberal assumptions: opportunity to cut deals; positive sum game; shared stake in a stable international economic order; governance issues -> realist assumptions: state centric but not always relative gains -> outside liberal framework: issues of global justice, issues of identity and norms -> Structure and agency -> Role of narratives: “Europe as a model”