POS 486 International Political Economy Dr. Okey Iheduru
SAMPLE Mid-Semester Examination Fall 2015
Instruction: Write short notes on FIVE of the following items. Your answer should be no more than one page of the blue book for each question.
1(a) Describe TWO conditions under which states may discriminate in favor of domestic companies according to Adam Smith. (b) Discuss THREE reasons (provide specific examples) why Adam Smith probably would not approve of today?s global corporate behemoths like Wal-Mart or Microsoft. (c) List TWO main ideas, TWO policy tools and ONE contemporary thinker (indicate contribution) associated with the ?developmental state? model of state-market relations.
2 (a) Identify and discuss THREE contending perspectives in the debates about the ?hegemonic stability? theory in IPE? (b) Drawing specific examples from your readings and class discussions explain FOUR differences between the era of British hegemony and the era of U. S. hegemony.
(c) Discuss FIVE specific tenets of Antonio Gramsci?s theory of cultural hegemony as a means of achieving social order?
3 (a) Identify and explain FIVE “mistakes of the past? (i.e., the inter-war years, 1919-1938) and the policies or institutions adopted at the Bretton Woods Conference to respond/deal with EACH of them. (b) Identify and explain TWO monetary policies and TWO fiscal policies that states may adopt in response to balance of payments deficits and TWO types of loan facilities available to member-countries in the IMF. (c) Explain FIVE ways (provide specific examples) in which recent global financial crises have led to reassessment of orthodox liberalism.
4. (a) Discuss TWO specific arguments each made by Friedrich von Hayek, Margaret Thatcher and Milton Friedman against the state?s role in the market. (b) Explain the major differences between liberalism and mercantilism in terms of their unit of analysis, most serious threat to national security, the role of international regimes, and the relationship between politics and economics.
5 (a) What major disagreements do feminists and constructivists have with the mainstream IPE perspectives? (b) Make a list of THREE positive and THREE negative potential effects of a more integrated global economic system, and explain the basis for your choice or opinion.
6. Discuss FOUR main contributions of Marxism to contemporary structuralism.
(b) Provide TWO structuralist explanations why the socialist revolution did NOT occur in industrialized countries. (c) Outline THREE structuralist explanations of the global financial crises that have lingered since 2008.
7. (a) In what TWO specific ways do the writings and ideas of Alexander Hamilton differ from those of David Ricardo? (b) Discuss TWO differences between the ?Keynesian Compromise? and the ?Washington Consensus.? (c) Identify and explain TWO major differences between Lenin?s theory of imperialism and Immanuel Wallerstein?s World System Theory.
(8) Discuss FIVE arguments for ?free? or unrestricted international trade (b) Identify and explain FIVE non-tariff barriers to international trade (give one example for each). (c) What are THREE most important North-South trade issues that have hindered talks at the Doha ?Development? rounds? (b) Discuss THREE ways in which the World Trade Organization (WTO) has been an improvement over the defunct General Agreements on Tariffs and Trade (GA TT) since its inception in 1995. (b) Discuss TWO benefits of ?monetary sovereignty? and TWO of its disadvantages.
WHAT IS INTERNATIONAL
II. Defining the IPE as a Discipline or Field
III. Origins of IPE in North American
IV. Elements of IPE
V. Why Should You Study IPE?
VI. Summary and Conclusions I. Introduction to I.P.E. International Political Economy
? Economics: distribution of scarce resources
? Politics: the role of the state in such
? International: flows of such resources across
borders 2 Who is this guy? WEGG
3 International Flows Goods & Services (trade) Finance People Pollutants Others?…
4 II. IPE AS A DISCIPLINE OR FIELD OF STUDY
An eclectic mixture of analytical and methods
and theoretical perspectives Central Questions:
(1) How does the state and its associated political
processes affect the production and
distribution of wealth?
(2) In particular, how do political decisions and
interests influence the location of economic
activities and the distribution of the costs and
benefits of these activities?
(3) What are the effects of markets and economic
forces on the distribution of power and welfare
among states and other political actors?
(4) Particularly, how do these economic forces
alter the international distribution of political
and military power? II. IPE AS A DISCIPLINE OR FIELD OF STUDY, cont?d. Neither state nor market is primary;
the causal relationships are
interactive (dynamic) and indeed
IPE therefore focuses on the mutual
interactions of very different means
of ordering and organizing human
activities: states and markets.
eclectic; intellectual silo-buster
Multi-level and multidimensional
analysis So what, exactly, do we
want the state to do? The state versus the
market? A stylized history of the
debate? With a pugilist analogy 7 ROUND 1:
The market comes out strong with a powerful blow to the body of the state : Adam Smith?s work leading (eventually) to? The fundamental theorems of welfare econs:
1. Competitive allocations are efficient
2. Any efficient allocation (distribution) can be reached
from an appropriate distribution of initial endowments
3. There is No role for the state to play in the
economy (except perhaps to redistribute initial
endowments) 8 ROUND 2: But the state returns a powerful punch to
the market: The traditional market failures:
? Monopolies (failure of perfect competition).
? Public Goods (efficient price is 0, since
these are non-rival goods).
? Externalities (consumption by one
individual affects the utility of another
As the bell rings to end this round, the state has a
big role to play in the economy. But wait? the market has a major blow in store for the
state? 9 ROUND 3: The market returns with ? what looks to
be ? a knock-out blow to the jaw of the state.
? Why assume that the state will perform any
better than the market?
? Private individuals are privately motivated
? Why assume governments are public spirited??
? Opens the possibility of ?rent-seeking? behavior
? The ?principal-agent? problem which we will
address soon! For better or worse, we?re stuck with the market.
Keep the state out of the economy. 10 ROUND 4:
The state is cut & it?s bleeding, but it?s on
its feet and it?s on the move. Delivers a
monumental blow to the belly of the market.
Stiglitz questions the assumptions of the
model which under girds ?the market.? ? MISSING MARKETS ? Practical: Futures markets. No risk market
for some things (moral hazard).
Logic: trade-off between thinness and
Normative: we don?t want some markets
to exist. IMPERFECT INFORMATION Utility functions are not ?well-behaved.? 11 The contest is a
DRAW? 12 III. ORIGINS OF IPE IN THE NORTH AMERICAN
ACADEME Inadequacies of ?political
realism? in the late 1960s and
The rise of multi-polar economic
world of the late 1960s and early
The OPEC oil shocks and the
significance of ?economic
Détente and the obsolescence of
nuclear weapons III. ORIGINS OF IPE IN THE NORTH AMERICAN
ACADEME, cont?d. Third World solidarity and demand for a
?New International Economic Order?
Economic recession and ?the fiscal
crisis? of the welfare state in 1970s
The end of the Cold War and ?the end
of ideology? thesis
Heightened globalization and the
9/11: ?the day everything changed? or
China rising; BRICS & econ change IV. FUNDAMENTAL ELEMENTS OF IPE (a) Structural mismatch between a
formal state system based on
territory (i.e., nation-states) and an
increasingly non-territorial &
globalized economic system
States = realm of collective action
and collective interests
Markets = realm of individual
action and self-interest
Differences: values; methods; and
goals IV. FUNDAMENTAL ELEMENTS OF IPE,
cont?d. Dynamic nature of state-market
(b) the economic & political causes
and the effects of the rise of a market
(c) relationship between economic
change and political change
(d) significance of a world economy
for domestic economies
(e) Justice and the problem of
inequality (?who benefits??) V. WHY SHOULD YOU STUDY IPE? Globalization and interdependence
Vulnerability vs. sensitivity to global
Global competency and global workforce
development for the 21st century
Global awareness and the future of
America?s global leadership
IPE is about you and me and your hometown
Antidote to a boring college and adult life
So, quit watching ?TMZ? and tune to Wolfe
Blitzer & Christian Amanpour!!! Why Study IPE? Main Questions and Issues Globalization: Efforts to manage its negative
externalities and impacts on the environment,
resources, and society.
Tensions between market fundamentalism and
protectionism and efforts to re-embed the market
into society and its cultural institutions.
Tensions between rising production and
distribution of gains.
Tensions between a state?s domestic needs and
its international obligations (throughout the text).
Balancing security and freedom.
Focusing more on how social groups influence
markets and states. Main Questions and Issues Global inequality between and within
How the rise of China, India, and other
newly industrializing countries is
fundamentally reshaping the global
Development and transformation:
strategies and dilemmas.
Regionalism as a development strategy
many countries, such as those in the
European Union, use to maintain wealth
and power. Main Questions & Issues The impact of technological changes on
political economic institutions and
The issue of hegemony or leadership over
the global political economy.
Global governance, management, and
systemic order provided by a variety of
institutions, along with resistance to them.
The increasing analytical and policy
linkages of issues to one another. VI. SUMMARY AND CONCLUSIONS Q&A