Search

What are the consequences of the rise of foreign state-led investment for international politics? Existing research oscillates between a 'geopolitical' and a 'commercial' logic driving this type of investment and remains inconclusive about its wider international reverberations. In this paper, I suggest going beyond this dichotomy by analyzing its systemic consequences. To do so, I conceptually delineate a geoeconomic approach that emphasizes the globalized nature of foreign state investment. I argue that foreign state investment creates system-level patterns, which can be studied by observing similar sectoral and geographic investment behavior. I map this phenomenon globally for the first time, drawing on the largest dataset on foreign state investment. Empirically, I show how foreign state investment is highly concentrated in Europe, North America and East Asia, and is owned by a handful of dominant states. It is especially European geo-industrial clusters that represent the hotspots of such concentration. The findings also suggest that three global industries - energy production, high-tech manufacturing, and transportation and logistics - form the key areas for current and future state-led investment concentration. With these contributions, the paper illuminates the increasing presence of states as owners in the global political economy, and facilitates its study as a geoeconomic phenomenon.

The paper contributes to the recent growth models debate through a cross-country analysis of growth drivers before and after the 2008 Global Financial Crisis (GFC). It argues that the widely used dichotomy of export-led versus (debt-financed) consumption-led growth has lost its usefulness since the GFC. Specifically, identifying growth models through growth contributions can give misleading results when the drivers of economic growth change. The paper contends that Comparative Political Economy (CPE) has neglected the unstable nature of financial growth drivers, effectively ignores fiscal policy, and overemphasizes price competitiveness as a growth driver. It shows empirically that, first, debt-financed growth is cyclical and financial booms come with busts and debt overhang; second, post-GFC growth dynamics are strongly shaped by the fiscal policy reaction; third, price competitiveness through wage deflation has played a negligible role in driving growth. We conclude that CPE needs to broaden its analysis of growth drivers in order to understand how the GFC transformed growth models.

The Global Value Chains/Global Production Networks (GVC/GPNs) literatures have become the predominant international political economy frameworks to understand the challenge of economic upgrading under 21st century globalization. However, until recently, this literature has overlooked the role of the state (outside its regulatory responsibilities) and the explanatory power of domestic political economy. Meanwhile, literature on developmental states, industrial policy and political settlements has generally taken a methodologically nationalist perspective to examine economic transformation in developing countries. This paper combines insights from the political settlements literature to contribute to the growing agenda within the GVC/GPNs literature to examine how the role of the state and domestic politics shape upgrading pathways in developing countries. Using the example of the Rwandan government’s attempts to increase specialty coffee exports over the last two decades, the paper shows how the public governance of the domestic value chain, combined with governance dynamics in the coffee GVC/GPN, has shaped upgrading pathways in Rwanda’s coffee sector. By developing a domestic political economy approach within the GVC/GPN tradition, this paper contributes to the growing attention within international political economy to focus on how multi-scalar pressures are shaping the outcomes of economic policy in developing countries.

The paper sets out to explain why the European Central Bank and the European Commission relaxed their opposition to debt restructuring and fiscal accommodation for Greece in the shift from the first to second adjustment program. Using the findings of the empirical analysis, the paper shows that EU institutions’ repositioning cannot easily be ascribed to the mechanisms that are typically at play in international negotiations, namely exogenous pressures and internalization of new beliefs through persuasion. Instead, the paper argues that a more nuanced and complete explanation of the relaxation of opposition to the change in the program strategy requires taking into account the institutional and temporal dimensions of the Troika negotiations. Specifically, the paper shows that the evolution of European actors’ preferences was shaped by the layering of new crisis management rules into the machinery of the monetary union. Layering allowed political actors in favor of the status quo achieving their preferences under changed external circumstances.

Countering cross-border crime is conventionally portrayed as a struggle between a new breed of transnational criminals and a defensive reaction by state authorities. In contrast, this paper argues that combating quintessentially transnational crimes like piracy and money laundering increasingly depends on private transnational companies fighting crime for profit by selling their services to other private firms. The paper broadens the literature on private security and global security governance by focusing on transnational responses to transnational threats in previously neglected maritime and financial realms. The rise of such corporate crime-fighters is explained by the recent evolution of environments structured by overlapping sovereignty claims which limit state enforcement while simultaneously creating new markets for security services. These cases represent instances of global governmentality insofar as they are diffuse, networked exercises of indirect power carried out by private actors, si...

Sustainability has become important in the operation of the global economy and its regulatory structure, leading significant shifts in the way powerful ‘lead firms’ in global value chains approach sustainability. In this paper, I argue that private, value chain-oriented forms of sustainability governance are not addressing the environmental problems they are putatively designed to solve. Through the analysis of how lead firms stimulate environmental upgrading along their value chains, I show that the mainstreaming of sustainability in business operations has allowed global buyers to accumulate ‘green’ profits and capital in ways that extract value from suppliers – especially those based in the global South. Drawing from analyses of the wine and coffee value chains, I show how lead firms push the hidden costs of sustainability compliance and related risks upstream towards producers. These processes have important redistributive repercussions as they raise entry barriers for smaller, less organized and/or more marginalized actors. Under the mantle of achieving environmental sustainability, lead firms in value chains stealthily capture value for themselves, while extracting more demands from their suppliers and promoting a further consolidation of their supply base. In the meanwhile, serious environmental challenges remain unaddressed.

This paper is the culmination of a multi-country, multi-method investigation into the export effects of Aid for Trade (AfT). Building on previous single-donor statistical studies of AfT, this paper conducts a statistical study of 19 Organisation for Economic Co-operation and Development (OECD) AfT donors and then examines the delivery and implementation of AfT in four recipient countries - Indonesia, the Philippines, Timor-Leste and Vietnam - from four donor countries - Germany, Japan, Norway and the US. The paper finds considerable variation in the export effects of the AfT programs, ranging from programs with no impact on recipient country exports to programs that are positively correlated with recipient country exports to the donor country and/or the rest of the world. Taking a closer look at the AfT programs of Germany, Japan, Norway and the US suggests that differences in program design and implementation may account for differences in AfT export effects. AMS

Following the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) intellectual property rights, and more specifically copyright, have become the subject of highly politicized conflicts. In this paper we analyze how these conflicts shifted from the political arena to private standard-setting sites, where two opposing coalitions of actors pursued competing initiatives – an industry coalition which aimed at enforcing copyright protection through Digital Rights Management and an emerging coalition of civil society actors which sought to develop a digital commons based on copyleft licenses. Paradoxically, the industry coalition, which had very successfully lobbied international organizations, ran into trouble developing and enforcing private regulation in the market place, while the civil society coalition proved to be more effective in the market than in the political sphere. The findings of our analysis indicate that the strategic use of organizational forms and collective action frames can be more decisive for the mobilization of users than material resources, and that the success of collective action frames depends on their compatibility with user practices. Based on the argument that regime shifting from intergovernmental to private governance can open up new and favorable spaces for weak actors to experiment with alternative forms of regulation, the paper contributes to the literature on the politics of regime complexity. The paper furthermore highlights the importance of studying non-elite actors and their day-to-day practices to gain a better understanding of changes within the international political economy.

European integration is interpreted in this paper as the route by which (West) Germany, profiting from close ties with the English-speaking West, was able to restore its full sovereignty and economic pre-eminence in Europe. Yet in shaping the actual integration process, it was France which played the key role. Most of the landmark steps towards the current EU were French proposals to pre-empt Anglophone-German collusion; creating European structures in which a resurgence of Germany (politically and economically) was made subject to permanent negotiation. German unification in 1991 removed the one reason why successive governments of the Federal Republic had gone along with this. Paradoxically, sovereign Germany today finds itself bound by the dense networks of consultation and decision-making which make the EU unique in the field of regional integration. The paper shows that between 1992 and 2005, German capital has moved to the centre of the network of corporate interlocks in the North Atlantic area. This helps to explain why in the post-1991, post-Soviet era of neoliberal, finance-driven globalisation, Germany is increasingly ‘speaking for Europe’, as its corporations have become nodal points in the communication structures through which the responses to the challenges facing the EU and the West at large are being shaped.

The paper explores a case of failure of economic ideas at bringing about institutional change. Specifically, it investigates the mechanism of legitimacy feedback that facilitated and, later, prevented the policy idea of orderly liberalization from being institutionalized into the amendment of the IMF’s Articles that would have extended the Fund’s mission to the liberalization of capital flows. Drawing on archival research and interviews with IMF officials, the paper argues that the convergence of member countries’ expectations around the proposal to amend the Articles was the product of the interaction between IMF-sponsored ideas and the validation of those actors that make up the Fund’s social constituencies for legitimation within a specific historical context. The idea of orderly liberalization was consequential not because it was supported by the U.S. or backed up by a homogenous IMF staff but because it reflected the economic interests of those actors – member states and private sector – who would bore the costs of an extension of the Fund’s mission. Having raised new expectations on the outcome of the process of liberalization and on the role of the IMF in it, the idea of orderly liberalization rhetorically entrapped its suppliers during the Asian crisis, when those expectations went disappointed. At that point, the sociopolitical feedback weakened, leading to the failure of the amendment

Warnings that a breakdown in multilateral trade liberalization would bring about an upsurge in protectionist sentiment, the possible collapse of the multilateral trading system and, in the most doomsday of scenarios, the fragmentation of the global economy have been an intrinsic part of trade negotiations since the General Agreement on Tariffs and Trade (GATT) was first negotiated. What is seldom acknowledged, however, is the role that this language of crisis and collapse – what might be called a ‘crisis discourse’ – has had on framing trade negotiations and in maintaining forward momentum in the liberalization process. This discourse has played a role in facilitating the kind of institutional development that the GATT and the World Trade Organization (WTO) has undergone – helping to push through bargains among GATT contracting parties and WTO members that have been (and remain) deeply asymmetrical – and driving the trade agenda forward at moments when the institution appears deadlocked; and it has continued to play a role in the current round of negotiations. The aims of the paper are twofold. First, the paper explores the content of the crisis discourse. Second, it examines the way in which the discourse has been deployed as a means of reframing trade negotiations in such a way that the likelihood of their continuation and ultimate conclusion increases. The paper does this by focusing on the collapse and resumption of the negotiations in the wake of the WTO's 2005 Hong Kong ministerial meeting, though the crisis discourse and its intensification at moments of intransigence has been a key feature of trade negotiations since the Allies first sat down to develop a trade architecture in the wartime and early post-war years.

With increasing economic interdependence, the scholarly treatment as well as the practice of economic nationalism is either seen as theoretically redundant or practically impossible. Contrary to this conclusion, I argue that economic nationalism is not inconsistent with globalization. States are not only active participants in globalization but they continue to strategically express nationalism in new global settings by supporting national firms and citizens overseas. By redefining economic nationalism from protectionism to the leveraging of national resources to secure economic benefits from the world economy, this paper provides an alternative view of economic nationalism. This paper analyzes economic nationalism as a dynamic concept. Empirically, it takes up three Indian industries (steel, auto, software) since 1950 to understand how nationalism was practiced and how it has changed under globalization. The paper establishes India's pursuit of economic nationalism under globalization through it...

This paper investigates political-economic backlash to economic globalization in industrialized polities. It analyzes data on the content of party platforms to develop measures of party support for, or opposition to, political-economic closure, anti-democratic nationalism, and xenophobia in all party platforms of 23 Organization for Economic Cooperation and Development countries for all national elections between 1960 and 2003. These allow broader judgments of trends in autarky and autarchy than focusing on electoral success of particular extreme-right parties. Based on these measures, the paper quantitatively analyzes how international trade and capital openness and flows, and immigration flows, all influence the embrace or rejection of political-economic backlash among parties. The main explanatory finding is that immigration and capital flows and openness tend to increase marginally such backlash when national welfare compensation is very modest, but to reduce it when national compensation is ...

Most economists examining the question of ‘pollution havens’ have concluded that the level of environmental regulation and activism in different states is not generally a significant determinant of international patterns of trade and foreign direct investment. This paper argues on the basis of extensive primary research that with respect to Japan's foreign direct investment during the 1970s, at any rate, this conclusion needs to be rethought. In the early 1970s, Japanese actors were remarkably forthright in ascribing their investment decisions to a desire to move polluting industry overseas. These statements allow us to examine ‘pollution export’ as a state strategy, a project advocated by industry organizations, and a response of individual firms to high levels of protest and regulation. The paper also traces the development of the Japanese debate over pollution export through the 1970s.

In an effort to protect a rapidly eroding international payments accounts balance, American policy makers pursued a capital controls program through much of the 1960s, contrary to the interests of private finance. How can we explain this outcome when, through much of the postwar period, private finance appears to have been well served by the state's foreign and domestic economic policy? This paper argues that, in responding to international pressure to bring its international payments account into balance, American state elites pursued a conservative Keynesian growth agenda that reconfigured the relationship between the American executive and central bank, which dramatically increased the state's autonomy from the influence of private financial interests. This paper therefore takes up the question of state autonomy and offers a new interpretation of the transition to neoliberal global financial structures from the Bretton Woods system of international monetary relations.

The World Bank is delegated the authority to provide long-term stabilization and general purpose balance of payments loans, what the Bank once described as ‘program loans’. Yet after a brief period in its early years, the Bank stopped disbursing these loans for an extended period. Why? This paper shows that changes to the Bank's early lending practices can be understood largely as a product of intra-organizational dynamics and change that facilitated the construction of a ‘project-oriented culture’ that delegitimized the disbursement of program loans. Though providing a number of compelling reasons to expect autonomous behavior from international organizations (IOs), such dynamics present a blind spot for rationalist approaches, which offer little insight into the processes that shape preference formation ‘from within’ IOs. The paper augments constructivist approaches by going beyond structuralist and static conceptions of IO staff as simply reacting to initiatives ‘from above’ or ‘from below’ an...

In recent years, the economic determinants of international currency status have attracted growing attention among economists. But what about the political determinants? This paper proposes a framework or taxonomy for thinking about this question. It identifies two distinct channels – one indirect and one direct – through which politics can influence the international standing of a currency. In the former category, politics is important through its impact on three key economic determinants of international currencies: confidence, liquidity, and transactional networks. In the latter category, politics matters more directly when a currency's international status is supported by states for reasons unrelated to these economic determinants. The paper explores briefly how these two channels of political influence might influence the dollar's future as an international currency. This exploration is not designed to provide a new definitive answer to the question of the dollar's future, but rather the goa...

The last two decades saw sweeping changes in the pharmaceutical patent policies of the developing countries from weak/non patentability to strong patent regimes. Analysing the policy change from a political economy approach, this paper pursues two simultaneous objectives. Firstly, it explores the common factors underlying the recent changes in the pharmaceutical patent policies of the developing countries. Secondly, it analyses the sources of the differential policy outcomes on pharmaceutical patents in India and Turkey. Against the state-centric theories that interpret the policy change primarily as a matter between the nation states from developed and developing countries, the paper presents two arguments. Firstly, it argues that the increased structural power of the transnational capital has been the common factor underlying the recent changes in the pharmaceutical patent policies of the developing countries. Secondly, it argues that the nature, scope, and outcomes policy processes on pharmace...

The paper ventures forward into the largely unknown terrain of the political economy of statistical measurement. National Accounts data are shown to be indispensable for economic governance, yet, it is argued, they can also be misused in this context when spurious conclusions about economic policy are drawn from spurious differences in growth performance. That the US economy grows faster than most European economies since the mid-1990s is widely accepted as a stylized fact; and this had a strong impact on policy reform debates in Europe over the last decade. The paper questions the legitimacy of this debate by calculating the proportion of the US lead in growth over the European Union that can be explained simply in terms of differing statistical methods.

This paper employs a global value chains (GVC) perspective to recent developments in the coffee market, associated with the behavior of market structure in a context of widening spreads around declining prices and affirms that due to their imperfect inclusion in the global economy, primary markets have entered ‘terminal crisis’. The paper asserts that while the role of state-territorial regimes of governance has noticeably weakened in the current (‘terminal crisis’) context, the combined strategic positioning of (‘related’) players, residing at highly imperfect, monopolized nodes has become the key shaper of development and this has had a de-stabilizing effect on the poorest. The paper observes that systemic crisis appears to be resolvable, subject to the ability of emerging new redistributive outcomes to reposition the coffee system at a qualitatively new equilibrium. In contributing to a more systematic (value-chain centered) line of enquiry on the relationship between development and inequalit...

This paper analyzes Vietnam's health policies. It adopts an interpretative framework stressing that policy approaches to strategic and commercial services, on one hand, and social services, on the other hand, should be fundamentally different, given the structurally different nature of such diverse services activities. The paper analyzes the evolution of health policies during the doi moi period and reviews the national and international debate on health systems reforms, arguing that an approach prone to blur the intrinsic difference between social and non-social services has led to market-oriented health reforms that are severely flawed in Vietnam, with negative impacts on universality of access, equity, poverty, and efficiency. In sum, social services policies, and policies in the domain of health in particular, appear to constitute the weakest and most contentious component of Vietnam's otherwise extremely successful development strategy. Therefore, they are a prime candidate for critical re-e...

This paper examines the construction of green money, a civil society-based initiative in Hungary as a case study of the ‘institutional’ approach to the transition from command to market economies in East/Central Europe, which argues for the development of civil society organizations to facilitate structural changes in the economy. The paper compares programmes developed endogenously in Hungary through the diffusion of ideas about sustainability and economic democracy through international activist networks with those developed by a Hungarian NGO with support from western aid agencies. For the former, green money was a radical project aimed at developing alternative forms of livelihood through localized money networks, while for the latter it was a tool for ameliorating transition through the construction of mutual aid and community feeling. The paper points to problems in building new civil society institutions, arguing that while some of the difficulties encountered were technical problems that ...

Global and national governance are sometimes seen to stand in a zero-sum relationship, particularly in the post-GATT era of multilateral trade. A more nuanced view expects states to seek the benefits of multilateralism whilst finding convenient loopholes and escape routes from its policy constraints. This paper steers a different course, focusing on the overt (‘legitimate’) measures industrialized states are undertaking to succeed in the international arena. Rich nations as a group have carved out a multilateral order which best suits their current developmental trajectory – one that diminishes space for promoting industries critical to their climb up the development ladder, while increasing scope for sponsoring the technology-intensive sectors now critical to securing national prosperity. State activism continues and in some respects has taken on a more strategic and collaborative quality. This paper discusses several forms of ‘strategic activism’ in trade, technology, and finance and considers ...

This paper analyzes the developmental trade-offs involved in multilateral versus regional-bilateral strategies of integration into the international economy. I contrast the regulations that guide policy in the areas of trade, investment, and intellectual property in the World Trade Organization (WTO) and in regional-bilateral agreements between the US and developing countries. Both strategies of integration feature similar trade-offs, in that developing countries gain increased market access and opportunities for specialization in exchange for diminished space for use of industrial policy instruments to create new productive capacities. However, the trade-offs are intensified in the case of regional-bilateral agreements: countries receive more market access, but in exchange make significantly deeper concessions regarding the management of inward investment and intellectual policy. I argue that countries whose integration into the international economy is guided by their obligations as members of the WTO still have opportunities to implement industrial strategies that are designed to alter comparative advantages and achieve upward mobility in the international economic order, but the obligations under the regional-bilateral strategy greatly circumscribe these options. The paper thus points to the need for new terms of reference in the debate over 'policy space' in the international political economy. In analyzing contemporary development strategies, the most useful contrast is not between the alternatives that countries have under the WTO and the alternatives that countries had in the past under the WTO's predecessors, but between a constraining multilateral environment and even more constraining regional and bilateral environments that condition increased market access on the sacrifice of the very tools that countries have historically used to capture the developmental benefits of integration into the international economy.

Until the 'Basel 2' reforms to banking supervision, operational risk was largely a residual category for risks and uncertainties which were difficult to quantify, insure and manage in traditional ways. This paper examines the rapid emergence of operational risk from this low epistemic status to its institutionalisation as a key component of global banking regulation. However, the meaning and implications of the Basel proposals have been fiercely contested by international banks and three key domains of policy controversy have been, and remain, particularly visible: definitional issues, data collection and the limits of quantification. Tensions in these three areas are discussed and reveal the significance of operational risk as a meeting point for diverse concerns and interests, and as a potential reinvention of a management knowledge hybrid between auditing and finance. The paper draws attention to the ironies and contradictions of this operational risk programme, which is part of a visionary project to extend 'enforced self-regulation' deep into the operations of banking, combining advanced technical modelling ideas on the one hand and softer corporate governance thinking on the other. The Basel 2 proposals also demonstrate the policy effectiveness of 'operational risk' as an agenda-forming category, whose success lies as much in the catalytic visibility of the issue, as in the in the details of implementation.

This paper examines the degree to which a new global mode of regulation (MOR) or social structure of accumulation (SSA) has emerged which may help to promote long wave upswing in the world economy. A series of institutional proxies are employed in this paper. Attention is given to the system-functions of global productivity and demand , through the performance of the prevailing system of production-distribution (SPD); global financial stability , proxied by the operations of the IMF; and global conflict resolution over trade issues, proxied through the workings of the WTO. The main findings are threefold. First, the SPD is only partially developed so as to promote productivity and demand. Second, some significant financial stability functions have been instigated through the IMF. And third, the WTO is undergoing major conflict due to the opposing policy proposals and criticisms by non-government organizations. This supports the conclusion that only limited success has been made in the emergence of a globa...

This paper offers a critique of the recent work on global economic and state restructuring in the broader political economy literature. It argues that much of this work, because of its theoretical reliance on regulation theory, offers only a partial account of the state and state restructuring. The paper offers a framework for understanding state restructuring and the state's role in economic regulation that adds more explicitly political imperatives to the existing regulation account. The methodological goals of the regulationist literature have led it to focus too heavily on the reproduction of capitalist relations as the primary object of state policies and institutions. That focus should be enlarged to include an explicit analysis of the important element of state-citizen relations. In addition to helping reproduce capitalist relations, state policies must also reproduce a condition of political legitimacy between state and citizen in order to ensure the continued reproduction of state institutions an...

Most authors analysing the 'New Economy' study it as an isolated phenomenon. This approach, however, misses the continued significance of structural economic and socio-political fundamentals, both domestically and within the world economy. This paper examines the current changes in the global economic environment in a historical and structural context and identifies change as a pattern constantly discernible in at least the past 1,000 years. The changes leading to the New Economy are neither unique in a historical context, nor do they represent the end of the nation state and its role in the global economy. Instead, the changes represent a common pattern observed over an extended period of time. A convincing framework to study and explain the question of economic and political global leadership in the course of history is the leadership long cycle paradigm. The paper identifies the Internet as the new leading sector of the nineteenth K-wave and the US as the country most likely to be the old and new leadi...

In the last 15 years the term 'restructuring' has been used by scholars from a wide range of disciplines to explain the economic and social changes experienced within Australia and other Western nations. While these analyses have been productive in accounting for restructuring in terms of the historical structural relations between fractions of capital and the state, this paper argues for an understanding of the more subtle ways through which programmes of economic reform are assembled at the state level. Using the Foucauldian-inspired literature on governmentality, the paper draws attention - through a historical analysis of the emergence in Australian political discourse of formal managerial skills - to the specific rationalities and technologies of governing that enable particular forms of 'restructuring' to be constituted and assembled into a programmatic form. The emergence of farm business management, as a means of improving agricultural productivity, is conceptualized as embedded within a series of problematizations of governing. These problematizations sought to constitute the national economy as in a state of crisis, and previous forms of governing as failing to enhance the capacities of farmers to compete internationally. On this basis, the managerial capacities of farmers emerged as the proper sites through which to pursue 'reform'.

The US is now the most important political force on the world scene calling for the establishment of transnational labour protections as a means of 'humanizing' the ongoing globalization of the capitalist economy. This paper raises critical questions about the US advocacy of transnational labour standards and norms by critically examining the existing system of US transnational labour protections. By means of a survey of different forms of transnational labour protections presently endorsed by the US, the paper argues that their internal legal weaknesses – in particular, their failure to institutionalize the minimal rudiments of modern formal legality – render them at best ineffective and at worst an instrument for attempts to assure the political and economic hegemony of the US, especially in those parts of the world in which the US has traditionally played a dominant role. Notwithstanding the understandable appeal of transnational labour standards, the US model of transnational labour protections repres...