South’s special needs, they believe that the necessary changes can occur within the liberal order and that a radical redistribution of wealth and power between North and South is not necessary. They also believe in private enter- prise and agree with orthodox liberals that many LDC development problems stem from domestic inefficiencies.72
CRITIQUE OF THE LIBERAL PERSPECTIVE
As this chapter notes, orthodox liberals believe that all states benefit from free trade and foreign investment in a competitive market. They are not concerned about the fact that all states do not benefit equally, because the economic linkages produce mutual benefits. Interventionist liberals note that unemploy- ment can occur under market conditions and that LDCs may require special treatment, but they believe that these problems can be remedied by sup- plementing rather than replacing the liberal economic system. Both realists and historical materialists criticize liberals for their inattention to power and distributional issues. Realists argue that relative gains are more important than absolute gains, because the most powerful states capture the largest share of the benefits. Economic exchanges are rarely free and equal, and bargaining power based on monopoly and coercion can have important political effects. Thus, powerful states can harm weaker states simply by reducing trade, aid, and investment.73 Historical materialists accuse liberals of legitimizing
inequality and exploitation. Domestically, liberals mislead the working class into believing that it will benefit along with the capitalist class, and inter- nationally, liberals disguise exploitation and dependency relations under the cloak of “interdependence.”
Critics also question the liberal view that advances in technology, transportation, and communication can solve the world’s economic and envi- ronmental problems. Even with technological advances, the liberal inter- national order that seemed so positive-sum in the immediate postwar years is becoming more competitive as global resources such as energy, water, and food become less abundant. Furthermore, technological advances may in fact contribute to greater North–South inequalities. Endogenous growth theory posits that technological change is not the result of fortunate breakthroughs in knowledge exogenous to the factors of production. Instead, technological knowledge is an endogenous factor of production along with labor and capital. In other words, technological progress depends on investment in science and education, and on research and development (R&D). Because DCs and their firms have more resources than LDCs to subsidize education and R&D, they continue to increase their productivity and “grow indefinitely at a faster pace” than small and poor economies.74 Although some claims of endogenous
growth theorists are controversial, they raise important questions about the orthodox liberal assumption that “the late-comers to modern economic growth tend to catch up with the early-comers.”75
Orthodox liberals also assume that open economic policies and interde- pendence will improve LDC conditions, without considering North–South political power relationships. Aside from cases such as OPEC, the East Asian NIEs, and the BRIC economies, North–South relations are highly asymmetrical. Thus, Tanzania’s president Julius Nyerere remarked to a G77 meeting,
. . . What we have in common is that we are all, in relation to the developed world, dependent—not interdependent—nations. Each of our economies has developed as a by-product and a subsidiary of development in the industrialized North, and is externally oriented.76
This dependent relationship provides the North with a potent source of power over the South. Economic liberals tend to discount the effects of this power asymmetry by arguing that North–South relations are a positive-sum game in which everyone benefits. One liberal assessment of NAFTA, for exam- ple, indicates that the United States, Canada, and Mexico agreed to “a partial surrender of autonomy in order to achieve the benefits that are available from mutual relaxation of protectionism.”77 However, orthodox liberals avoid
asking whether LDCs (i.e., Mexico in NAFTA) must surrender more auton- omy than DCs (the United States and Canada). Liberals are also criticized for putting too much faith in the market and for disregarding the role of the state. Interventionist liberals view states as performing corrective functions, but even interventionists are criticized for undertheorizing the role of the state. Thus, realists argue that we should “bring the state back in” to our research because of its central role in policy making.78
Whereas liberals and realists accept the capitalist system as a given, historical materialists view capitalism as an exploitative system that should—and will— eventually be replaced by socialism. We discuss historical materialists and other critical theorists in the next chapter.
QUESTIONS
1. What are the similarities and differences among orthodox, interventionist, and institutional liberals?
2. Why did John Gerard Ruggie’s “embedded liberalism” become so important after World War II, and how did it draw upon the ideas of John Maynard Keynes and Karl Polanyi?
3. When did neoliberalism emerge, and why? How did it draw on the ideas of Milton Friedman? How did it differ from the liberalism of Adam Smith?
4. In what way do both the provision of public goods and prisoners’ dilemma demon- strate “collective action problems”? How and why do liberals and realists differ in their views regarding the possibilities for cooperation under prisoners’ dilemma? 5. What are international regimes, and what are the views of regime theorists regard-
ing the formation, maintenance, and results of regimes?
6. In what way does regime theory draw on both the liberal and realist perspectives? What are the major criticisms of regime theory? Is “global governance” a more useful concept than “regimes”?
Further Reading 97
KEY TERMS
endogenous growth theory 95 global governance 89 governance 89 institutional liberals 78 institutions 84 interdependence 84 international organizations 88 interventionist liberals 78 market economy 78 orthodox liberals 77 Pareto-deficient outcome 86 Pareto-optimal outcome 86 prisoners’ dilemma 85 two-level game theory 927. In what ways have studies of foreign economic policy making, concentrated and diffuse domestic interests, and two-level game theory increased our understanding of domestic–international interactions in IPE?
8. How do orthodox and interventionist liberals approach the issue of North–South relations? What are some of the criticisms of their approach?
FURTHER READING
Important studies on the changes in economic liberalism include Karl Polanyi, The Great
Transformation (Boston, MA: Beacon Press, 1965); John G. Ruggie, “International
Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order,” in Stephen D. Krasner, ed., International Regimes (Ithaca, NY: Cornell University Press, 1983), pp. 195–231; and Mark Blyth, Great Transformations (New York: Cambridge University Press, 2002).
Basic studies on game theory and prisoners’ dilemma include Robert Axelrod, The
Evolution of Cooperation (New York: Basic Books, 1984); and Kenneth A. Oye,
ed., Cooperation Under Anarchy (Princeton, NJ: Princeton University Press, 1986). Basic studies on regime theory include Stephen D. Krasner, ed., International Regimes (Ithaca, NY: Cornell University Press, 1983); Stephan Haggard and Beth A. Simmons, “Theories of International Regimes,” International Organization 41, no. 3 (Summer 1987), pp. 491–517; and Volker Rittberger with Peter Mayer, eds., Regime Theory and
International Relations (New York: Oxford University Press, 1993). On private regimes,
see A. Claire Cutler, “Private International Regimes and Interfirm Cooperation,” in Rod- ney B. Hall and Thomas A. Biersteker, eds., The Emergence of Private Authority in
Global Governance (New York: Cambridge University Press, 2002), pp. 23–40.
The literature on global governance includes Miles Kahler and David A. Lake, eds.,
Governance in a Global Economy: Political Authority in Transition (Princeton, NJ:
Princeton University Press, 2003); Rorden Wilkinson and Steve Hughes, eds.,
Global Governance: Critical Perspectives (New York: Routledge, 2002); and David
Held and Anthony McGrew, eds., Governing Globalization: Power, Authority and
Global Governance (Malden, MA: Polity, 2002).
On domestic–international interactions, see Peter J. Katzenstein, ed., “International Relations and Domestic Structures: Foreign Policies of the Advanced Industrial States,” special issue of International Organization 31, no. 4 (Autumn 1977); G. John Ikenberry, David A. Lake, and Michael Mastanduno, eds., “The State and American Foreign Economic Policy,” special issue of International Organization 42, no. 1 (Winter 1988); Robert O. Keohane and Helen Milner, eds., Internationalization and
Domestic Politics (New York: Cambridge University Press, 1996). On two-level game
Two-Level Games,” International Organization 42, no. 3 (Summer 1988), pp. 427–460; Peter B. Evans, Harold K. Jacobson, and Robert D. Putnam, eds.,
Double-Edged Diplomacy (Berkeley, CA: University of California Press, 1993); and
William P. Avery, ed., World Agriculture and the GATT (Boulder, CO: Lynne Rienner, 1993).
On liberalism and North–South relations, see Lloyd G. Reynolds, Economic Growth in
the Third World, 1850–1980 (New Haven, CT: Yale University Press, 1985); and
Independent Commission on International Development Issues, North–South, A
Program for Survival (Cambridge, MA: MIT Press, 1980).
NOTES
1. Robert. D. McKinlay and Richard Little, Global Problems and World Order (London: Pinter, 1986), p. 41.
2. Andrew Moravcsik, “Taking Preferences Seriously: A Liberal Theory of International Politics,” International Organization 51, no. 4 (Autumn 1997), p. 517.
3. Adam Smith, The Wealth of Nations, vol. 1 (London: Dent, Everyman’s Library no. 412, 1910), bk. 4, p. 398.
4. Walter Wriston, “Technology and Sovereignty,” Foreign Affairs 67, no. 2 (Winter 1988–1989), p. 71.
5. Geoffrey Garrett, “The Causes of Globalization,” Comparative Political Studies 33, no. 6/7 (August/September 2000), pp. 941–991.
6. John Locke, Two Treatises of Government (Cambridge, UK: Cambridge University Press, 1964), ch. 9 of the Second Treatise, p. 368. Locke believed that governments should be able to levy taxes and require military service.
7. Smith, The Wealth of Nations, p. 436.
8. Smith, The Wealth of Nations, vol. 2, bk. 4, pp. 180–181. For an alternative view see Andrew Wyatt-Walter, “Adam Smith and the Liberal Tradition in International Relations,” Review of International Studies 22, no. 1 (1996), pp. 142–172. 9. Peter A. Hall, “Introduction,” in Peter A. Hall, ed., The Political Power of Economic
Ideas: Keynesianism Across Nations (Princeton, NJ: Princeton University Press,
1989), p. 4.
10. John M. Keynes, The General Theory of Employment, Interest, and Money (New York: Harcourt, Brace & World, 1936), pp. 378–379.
11. Hall, “Introduction,” p. 7.
12. John M. Keynes, “National Self-Sufficiency,” The Yale Review 22 (1933), p. 758. On Keynes’s changing view of trade protection, see Barry Eichengreen, “Keynes and Protection,” Journal of Economic History 44, no. 2 (June 1984), pp. 363–373. 13. Fred L. Block, The Origins of International Economic Disorder: A Study of United
States International Monetary Policy from World War II to the Present (Berkeley,
CA: University of California Press, 1977), pp. 62–69.
14. Anthony Arblaster, The Rise and Decline of Western Liberalism (New York: Basil Blackwell, 1984), p. 292; Donald Winch, “Keynes, Keynesianism, and State Inter- vention,” in Peter A. Hall, ed., The Political Power of Economic Ideas: Keynesian-
ism Across Nations (Princeton, NJ: Princeton University Press, 1989), pp. 109–110.
15. Karl Polanyi, The Great Transformation (Boston, MA: Beacon Press, 1965). 16. John G. Ruggie, “International Regimes, Transactions, and Change: Embedded
Liberalism in the Postwar Economic Order,” in Stephen D. Krasner, ed., International
Notes 99 17. Peter Gourevitch, Politics in Hard Times: Comparative Responses to International
Economic Crises (Ithaca, NY: Cornell University Press, 1986), pp. 166–169; Adam
Przeworski, Capitalism and Social Democracy (New York: Cambridge University Press, 1985), pp. 205–211.
18. Friedrich A. Hayek, The Road to Serfdom (Chicago: University of Chicago Press, 1944). Hayek and Keynes had a complex relationship that lasted over a period of years.
19. Hayek gave priority to social as well as economic relationships. See Walter Block, “Hayek’s Road to Serfdom,” Journal of Libertarian Studies 12, no. 2 (Fall 1996), p. 365; Charles R. McCann, “F. A. Hayek: The Liberal as Communitarian,”
Review of Austrian Economics 15, no. 1 (2002), pp. 5–34.
20. Milton Friedman and Rose Friedman, Free to Choose: A Personal Statement (New York: Harcourt Brace Jovanovich, 1980), pp. 54–55.
21. Robert Cox, Production, Power, and World Order: Social Forces in the Making of
History (New York: Columbia University Press, 1987), pp. 286–288; Alain Lipietz, Towards a New Economic Order: Postfordism, Ecology and Democracy, trans.
Malcolm Slater (New York: Oxford University Press, 1992), pp. 30–31.
22. Mark Blyth, Great Transformations: Economic Ideas and Institutional Change in
the Twentieth Century (New York: Cambridge University Press, 2002).
23. Robert O. Keohane, “Neoliberal Institutionalism: A Perspective on World Politics,” in Robert O. Keohane, ed., International Institutions and State Power:
Essays in International Relations Theory (Boulder, CO: Westview Press, 1989),
pp. 3–4.
24. John G. Ruggie first used the regime term in IPE in “International Responses to Technology: Concepts and Trends,” International Organization 29, no. 3 (Summer 1975), pp. 570–573; Krasner, International Regimes.
25. Robert O. Keohane and Joseph S. Nye, Power and Interdependence, 2nd ed. (Glenview, IL: Scott, Foresman, 1989), pp. 8–9.
26. Richard N. Cooper, The Economics of Interdependence: Economic Policy in the
Atlantic Community (New York: McGraw-Hill, 1968). Earlier studies include Sir
N. Angell, The Foundations of International Polity (London: Heinemann, 1914); William A. Brown, Jr., The International Gold Standard Reinterpreted,
1914–1934, 2 vols. (New York: National Bureau of Economic Research, 1940);
Albert O. Hirschman, National Power and the Structure of Foreign Trade (Berkeley, CA: University of California Press, 1945).
27. Richard N. Cooper, “Economic Interdependence and Foreign Policy in the Seventies,”
World Politics 24 (January 1972), p. 179.
28. Cooper, “Economic Interdependence and Foreign Policy in the Seventies,” pp. 170–171.
29. Keohane and Nye, Power and Interdependence, p. 11.
30. See Keohane and Nye, Power and Interdependence, pp. 24–29, and ch. 7.
31. Ricardo Grinspun and Maxwell A. Cameron, eds., The Political Economy of
North American Free Trade (Montreal, QC: McGill-Queen’s University Press,
1993). Some Canadian analysts go even further and characterize Canada’s relation- ship with the United States as dependence rather than interdependence. See Glen Williams, “On Determining Canada’s Location Within the International Political Economy,” Studies in Political Economy 25 (Spring 1988), pp. 107–140.
32. Bayless Manning coined the term intermestic in “The Congress, The Executive and Intermestic Affairs: Three Proposals,” Foreign Affairs 55 (June 1977), pp. 306–324.
33. James D. Morrow, Game Theory for Political Scientists (Princeton, NJ: Princeton University Press, 1994), pp. 1–8.
34. Robert O. Keohane, After Hegemony: Cooperation and Discord in the World
Political Economy (Princeton, NJ: Princeton University Press, 1984), p. 68.
35. Robert Axelrod, The Evolution of Cooperation (New York: Basic Books, 1984), p. 9. The terms Pareto-optimal and Pareto-deficient are named after an Italian sociologist, Vilfredo Pareto (1848–1923).
36. Keohane, “Neoliberal Institutionalism,” pp. 1–20; Robert Axelrod and Robert O. Keohane, “Achieving Cooperation Under Anarchy: Strategies and Institutions,” in Kenneth A. Oye, ed., Cooperation Under Anarchy (Princeton, NJ: Princeton University Press, 1986), pp. 226–254.
37. Arthur A. Stein, “Neoliberal Institutionalism,” in Christian Reus-Smit and Duncan Snidal, eds., The Oxford Handbook of International Relations (New York: Oxford University Press, 2008), p. 206.
38. Stephen D. Krasner, “Structural Causes and Regime Consequences,” in Stephen D. Krasner, ed., International Regimes (Ithaca, NY: Cornell University Press, 1983), p. 2; Mark W. Zacher with Brent A. Sutton, Governing Global Networks: Inter-
national Regimes for Transportation and Communications (New York: Cambridge
University Press, 1996), p. 1.
39. Keohane, After Hegemony, pp. 49, 244–245.
40. Oran R. Young, International Cooperation: Building Regimes for Natural Resources
and the Environment (Ithaca, NY: Cornell University Press, 1989), p. 206.
41. Olav S. Stokke, “Regimes as Governance Systems,” in Oran R. Young, ed., Global
Governance: Drawing Insights from the Environmental Experience (Cambridge,
MA: MIT Press, 1997), pp. 27–63.
42. Stein, “Neoliberal Institutionalism,” p. 203.
43. Susan Strange, “Cave! Hic Dragones: A Critique of Regime Analysis,” in Stephen D. Krasner, ed., International Regimes (Ithaca, NY: Cornell University Press, 1983), p. 345. 44. See Krasner, “Structural Causes and Regime Consequences,” pp. 5–10.
45. Oran R. Young, Governance in World Affairs (Ithaca, NY: Cornell University Press, 1999), p. 2.
46. John Vogler, “Taking Institutions Seriously: How Regime Analysis Can be Relevant to Multilevel Environmental Governance,” Global Environmental Politics 3, no. 2 (May 2003), pp. 32–35; James N. Rosenau, “Governance in the Twenty-first Century,” Global Governance 1, no. 1 (Winter 1995), pp. 18–20.
47. Strange, “Cave! Hic Dragones,” p. 345.
48. Anil Hira and Theodore H. Cohn, “Toward a Theory of Global Regime Governance,”
International Journal of Political Economy 33, no. 4 (Winter 2003–2004), pp. 9–11.
49. For other criticisms of the global governance literature see Hira and Cohn, “Toward a Theory of Global Regime Governance,” pp. 12–16.
50. See Further Readings in this chapter for examples. 51. Stokke, “Regimes as Governance Systems,” p. 31.
52. Jeffry Frieden and Lisa L. Martin, “International Political Economy: Global and Domestic Interactions,” in Ira Katznelson and Helen V. Milner, eds., Political
Science: The State of the Discipline (New York: W.W. Norton, 2002), pp. 118–120.
53. Peter J. Katzenstein, ed., “International Relations and Domestic Structures: Foreign Policies of the Advanced Industrial States,” special issue of International
Organization 31, no. 4 (Autumn 1977), pp. 587–920; Benjamin J. Cohen, International Political Economy: An Intellectual History (Princeton, NJ: Princeton
Notes 101 54. G. John Ikenberry, David A. Lake, and Michael Mastanduno, eds., “The State and
American Foreign Economic Policy,” special issue of International Organization 42, no. 1 (Winter 1988), pp.1–243.
55. Bruno S. Frey, “The Public Choice View of International Political Economy,”
International Organization 38, no. 1 (Winter 1984), pp. 207–214; Guido Pincione
and Fernando R. Tesón, Rational Choice and Democratic Deliberation (New York: Cambridge University Press, 2006), pp. 5–7.
56. Frieden and Martin, “International Political Economy,” p. 130; I. M. Destler and John S. Odell, Anti-Protection: Changing Forces in United States Trade
Policy (Washington, DC: Institute for International Economics, 1967),
pp. 125–128.
57. Peter Gourevitch, “The Second Image Reversed: The International Sources of Domestic Politics,” International Organization 32, no. 4 (Autumn 1978), pp. 881–912; Frieden and Martin, “International Political Economy,” pp. 132–136.
58. Robert D. Putnam, “Diplomacy and Domestic Politics: The Logic of Two-Level Games,” International Organization 42, no. 3 (Summer 1988), pp. 427–460. 59. Putnam, “Diplomacy and Domestic Politics,” p. 449.
60. David A. Lake, “Power and the Third World: Toward a Realist Political Economy of North-South Relations,” International Studies Quarterly 31, no. 2 (June 1987), p. 218.
61. Cyril E. Black, The Dynamics of Modernization: A Study in Comparative History (New York: Harper & Row, 1966), p. 27; Daniel Lerner, “Modernization: Social Aspects,” in David Sills, ed., International Encyclopedia of the Social Sciences, vol. 10 (New York: Macmillan, 1968), pp. 386–388.
62. Robert Wade, Governing the Market: Economic Theory and the Role of Government
in East Asian Industrialization (Princeton, NJ: Princeton University Press, 1990),
pp. 11–14.
63. Less deterministic studies include Gabriel A. Almond and James S. Coleman, eds.,
The Politics of the Developing Areas (Princeton, NJ: Princeton University Press,
1960); Samuel P. Huntington, Political Order in Changing Societies (New Haven, CT: Yale University Press, 1968); Alexander Gerschenkron, Economic Backward-
ness in Historical Perspective: A Book of Essays (Cambridge, MA: Harvard
University Press, 1962).
64. Daniel Lerner, The Passing of Traditional Society: Modernizing the Middle East (New York: Free Press, 1964), pp. viii–ix. (This quotation is in the preface to the paperback edition.)
65. W. W. Rostow, The Stages of Economic Growth: A Non-Communist Manifesto (Cambridge, UK: Cambridge University Press, 1960), pp. 4–92.
66. Alejandro Portes, “On the Sociology of National Development: Theories and Issues,” American Journal of Sociology 82, no. 1 (July 1976), p. 60.
67. Lloyd G. Reynolds, Economic Growth in the Third World, 1850–1980 (New Haven, CT: Yale University Press, 1985), p. 6; Francis Fukuyama, “The End of History?” The National Interest 16 (Summer 1989), p. 4.
68. W. W. Rostow, Why the Poor Get Richer and the Rich Slow Down (Austin, TX: University of Texas Press, 1980), p. 259.
69. Friedman and Friedman, Free to Choose, p. 57.
70. Independent Commission on International Development Issues (henceforth, Brandt Commission I), North–South, A Program for Survival (Cambridge, MA: MIT Press, 1980), pp. 103–104.
72. Stephen D. Krasner, Structural Conflict: The Third World Against Global Liberalism (Berkeley, CA: University of California Press, 1985), pp. 22–25.
73. Charles E. Lindblom, Politics and Markets: The World’s Political–Economic
Systems (New York: Basic Books, 1977), p. 48.
74. Michael Burda and Charles Wyplosz, Macroeconomics, 4th ed. (New York: Oxford University Press, 2005), pp. 65–66.
75. Rostow, Why the Poor Get Richer and the Rich Slow Down, p. 259.
76. “Address by His Excellency Mwalima Julius K. Nyerere, President of the United Republic of Tanzania, to the Fourth Ministerial Meeting of the Group of 77,”
Arusha, February 12–16, 1979, in Karl P. Sauvant, The Group of 77: Evolution, Structure, Organization (New York: Oceana Publications, 1981), p. 133.
77. Steven Globerman and Michael Walker, “Overview,” in Steven Globerman and Michael Walker, eds., Assessing NAFTA: A Trinational Analysis (Vancouver, BC: The Fraser Institute, 1993), p. ix.
78. Theda Skocpol, “Bringing the State Back In: Strategies of Analysis in Current Research,” in Peter B. Evans, Dietrich Rueschemeyer, and Theda Skocpol, eds.,
103
T
his chapter is more broad ranging than Chapters 3 and 4 because it discusses four critical perspectives that do not agree on a core set of assumptions: historical materialism, constructivism, feminism, and environmentalism. Their main common feature is that they are all critical of the traditional mainstream liberal and realist perspectives. However, the “mainstream” is not static, and we will discuss the fact that there are liberal as well as critical constructivists, feminists, and environmentalists. This chapter devotes more attention to historical materialism than to the other critical perspectives because it encompasses the largest group of critical theories, including Marxism, dependency theory, world-systems theory, and Gramscian analysis. Although all these approaches have some roots in Marxism, they often diverge substantially from classical Marxist thought.Historical materialism is “historical” because it examines structural change in
terms of class and sometimes North–South struggles over time, and it is “materialist” because it examines the role of material (especially economic) factors in shaping society.1