Foreign Economic Policy

This chapter provides an overview of foreign economic policy. First, it defines the subject as it relates to the discipline of Political Science in order to demonstrate how this discipline’s research on foreign economic policy is problem-centered and what problem is its focus: explaining the variation in policy related to trade, external investment, capital, exchange rates, and immigration. Second, it reviews two major research programs related to this problem: the state-level variation based on political regime type and the individual-level preference variation for different foreign economic policies. Third, this chapter highlights the obstacle to connecting these two research programs: how to explain outcomes at the state-level based on preferences at the individual-level.

Modern IPE

Although there is some disagreement, a remarkable consensus exists that IPE as a formal subject of study emerged in the late 1960s or early 1970s, as the Bretton Woods system was dissolving. This chapter interrogates such a consensus by considering why modern IPE failed to materialize as an organized subject of enquiry after World War II, when there was a demonstrable calling for knowledge of the type it provides. To explore this puzzle I establish that an ongoing academic conversation was available through the work of three eminent intellectuals who would today be clearly recognized as IPE scholars: Karl Polanyi, E.H. Carr and David Mitrany. Although they all advanced distinct IPE-centered ways of framing the central problems of the post-1945 world, their work failed to launch a systematic and coherent conversation about IPE because of the absence of key conditions for this to occur. There are two lessons which we may draw from this case: disciplines require institutional homes from which to carry out “conversations,” and, more controversially, these homes might best be assembled within an architecture provided by a single discipline rather than within multi- or inter-disciplinary venues in which few agreed-upon rules exist.

Territory

The concept of territory has rarely been directly interrogated in International Political Economy (IPE) literature. Territory involves more than geography or space; instead it invokes a set of ideas and practices of political authority and control. While there are research programs in IPE that deal with spatial scale—including the study of global cities, regionalism, the size of states, offshoring, and special economic zones—there are important ways that IPE can draw on work from other fields that explicitly focuses on territory. Importantly, the literature on territory lays bare some of the territorial assumptions of common IPE models which, if further explored, have the potential to lead to better model specification and the opening up of new and fertile areas of research.

Work and Workers in International Markets

Four “problems” drive the International Political Economy (IPE) literature on work and workers in a globalized world: the economic determinants of workers’ political orientations; the role and future of labor unions; the regulation and governance of international supply chains; and migration. There remain walled gardens in the IPE literature on labor that inhibit productive exchange but the literature on supply chain governance and labor standards stands out for its policy relevance and active collaboration among scholars from different IPE traditions. The chapter concludes with reflections on how the implicit definition of “problems,” as opposed to explicit normative claims might not be “first best.”

Experiments in IPE Research

Over the last decade, experiments have developed from a marginally employed to an increasingly standard method in the study of International Political Economy (IPE). After a short discussion of causal inference and the potential outcomes framework, this chapter outlines different kinds of experiments used to study questions concerning trade, migration, foreign aid, or investment. The chapter thereby not only strives to provide an overview of the state-of-the-art in experimental IPE research but also to outline the different roles or functions experimental studies can fulfill to further our knowledge on IPE. The chapter concludes by critically discussing both advantages and disadvantages of the experimental turn in IPE.

From Silos to Barns? Regional Institutions in International Political Economy

The explosion of research on regional economic institutions (REI) over the last two decades has led to a richer understanding of why they emerge, what form they take, and what effects they have. This chapter argues that research on REI is not a monopoly of any particular theoretical, methodological, or epistemological approach. Ongoing work leans not merely on standard political science and economics but on sociology, psychology, and critical theory. Yet, REI studies cluster in silos more often than barns, although this chapter highlights some research programs with potential for fostering barns. Exclusive attention to power, economic efficiency, transaction costs, and transnational normative diffusion—the common analytical currency in standard accounts of REI—may conceal deeper domestic drivers underlying REI dynamics.

Development Policy

A variety of policies implemented by the wealthy countries of the world can have an impact on economic development in poor countries. We argue that the field of international political economy has underinvested in studying the determinants of non-foreign-aid policies that affect development. We review literature from a set of eight policy areas where there are identifiable development consequences and discuss the findings of the International Political Economy (IPE) literature with regard to policy origins, changes, and consequences. We find a consistent role of non-governmental organization (NGO) pressure on wealthy-country governments in bringing about pro-development policies, although we also identify instances where pro-development policies originate in domestic and strategic interests. Overall, we argue that there is significant space for additional exploration through a development lens of how policies come into being in the wealthy countries of the world.

Non-Governmental Organizations

Research on non-governmental organizations (NGOs, often international NGOs, or INGOs) has advanced over the last several decades from demonstrating that NGOs matter in shaping economic development and foreign aid to examining the potential for NGOs to advocate for new rights, set standards for environmental protections, and establish alternative economic arrangements in international relations. The study of NGOs as organizations has opened their potential as interest groups as well as economic actors in their own rights. Moving forward, new data and new theory is needed to fully develop International Political Economy (IPE) understandings of NGO motives, intentions, strategies, and power in global governance.

Climate Crisis

International relations scholarship on climate change exists primarily in the field of Global Environmental Politics (GEP) and outside the substantive purview of mainstream International Political Economy (IPE). This chapter argues that the climate crisis is fundamentally an IPE problem, and it requires attention from IPE scholars as a primary subject of interest. To facilitate engagement, the chapter reviews a diverse literature at the intersection of IPE and climate across three substantive areas: the global climate regime, trade, and renewable energy transitions. Each section offers avenues for research, and provides ideas on how to put concepts and ideas from IPE to work in climate crisis scholarship.

The Evolving State of the State in International Political Economy

Three established conceptions of the nation-state have a long and well-established tradition in the field of International Political Economy (IPE), each aligning with a major research paradigm within IPE or the broader field of international relations: realism, open economy politics, and constructivism. A fourth, emerging, research paradigm called the “New Interdependence Approach” or the “Political Economy of Complex Interdependence” offers a promising new conceptualization of the nation-state that encompasses the best insights offered by traditional paradigms. This article reviews the evolution of scholarly thinking about the nation-state within the field of IPE and proposes a new, more encompassing conception of the nation-state as a cross-section of the international political economy multiplex.