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Historical overview of Int'l political economy: Session 1

Historical overview of IPE


-IPE before WW 2

-Postwar economic management

Pearson & Payaslian:

-Origins of Modern IPE 1600s-1860s,

-Growth of Industry, Technology and Empires: 1870s-WW2

-Emerging IPE: 1980s, 1990s and present

Origins of the Modern IPE

Fairly developed zones

-Mediterranean: Venice, Genoa, Byzantine Empire, Ottoman Empire, Maghrib,

-Africa: Ghana, Mali Empire, Songhay, transsaharan trade route,

-Indian Ocean, South China Sea, Chinese Empire, Silk Road,

-Amerindian Empires: Maya, Aztecs, Incas


Portugal , Spain (occupation, crusade)

Netherlands France (trading ports, companies)

Britain 1 France

Britain 2 Germany


Blocked land routes to Asia, need to open sea rout to Asia: Их нээлтүүд

Mid 1800s-WW2

British attempt for trade liberalization, backlash

-1846 Corn law abolished,

-1860 Cobden-Chevalier Treaty (Brit-France)

-WW1-Brit decline, US Emergence: War debts to US Brit 5 bln, Fr-4 bln: US trade barriers

-Fordney-McCumber Act 1922-raised customs on agri.

Depression, interwar situation:

-Stock Market crash Oct., 1929: US less trade dependent 5% while others were more /14%,

Policymakers panicked: raised tariffs exacerbating the crisis: Smoot Hawley Act 1930: retaliation by Europe, G Trade 35-12 bln. 29-33.

Lack of capital for consumption,

FRB: reduced money supply.

Defaults on debts: Br, Fr, Ger, L.A.

Post WW2 IPE

1944 Bretton Woods, 47

-IMF: monetary stability and elimination of currency exchange res.; system of fixed, pegged rates;

IMF: short term loans

IBRD/WB: long-term: for reconstruction, econ development

GATT: lower tariff, rules in trade


WB:rid of reconstruction; pure econ dev.; included EE, FSU.

IMF: 70s fixed system collapse, floating, 80s foreign debt.

GATT/WTO: goods also services, int.l property, trade-related-investment

Roles of North, South, CPE

Crucial role in funding, decision-making,

OECD: G10, G5, G7


US, Europe, Japan triad : largest share of transaction: FDI 95- 92.1% outward, 71.9% inward; trade of goods 95 – 93% export, commercial service –89.3% in NORTH

WB president American; IMF Mdir. European, GATT/WTO European.

Challenges for KIEOs:

-End of Cold War – frictions among north: trade & other conflict; pressures for protectionism in US,

-Increased influence of Third World : Oil Shock

-Globalization: Increased capital flows: difficult to monitor, MNCs and Int banks

-Entrance of FSU, East Europe to 3d world aid recipients: 181 IMF, 180 WB, 128 WTO

Smaller : OECD


G-10: 1962 (now 11 countries) -Policy Coordination

G-5: 1970s: few most powerful, flexible, top leaders, (finance ministers and central bank governors)

1975 invited Italy

1976 Invited Canada

Recently Russia on political issues



G-7 / P-8:

2 levels: 1 Heads of state and govt

2 Ministers of finance/ Central bank governors

Considerations to include countries like:

-China, India, Brazil, Indonesia

-Oil exporting Arab nations

-Consult with non-members

Divisions in North

Germany/Jap criticism:lack of role in comparison to their increasing role: no CEOs from 2, US dissatisfaction – GATT is European;

Regional Integration Agreements: Impatience with decision-making in large gr, increased competitiveness among 3 tr, growing US interest in regionalism as its hegemony is declining.

Stages of FTA

FTA : Eliminate tariffs NAFTA

Customs Union: FTA +common external tariffs CWPSys Brit

Common Market: CU + free mobility of factors of production, similar health, safety, educational, social security standards. EU

Economic Union: Common Market + harmonization of Industrial, regional

Transport, fiscal, monetary and other econ and social policies: (+monetary union) 1999 Jan EURO, 11 members

5. Political Union: Econ Union + Political area: foreign and defense policy: Federal government:

NAFTA: 1, 3,


Two phases since WW2.

1959 E.E.Community, 1960s third world, NAM

1980s, revival of US FTA with Israel, Canada, 90s NAFTA, 1995 EU 15 members, 1989 APEC:


Dev. Gap

World GDP 23 tril, South 5 tril.

Divisions within South: East Asia, L.A.

UN 1971 24 poorest, 1980 – 31, 2000 – 48.

Criticism on KIEOs lack of influence, donors’ assistance do not contribute to econ development


WB: hard loans, LLDC want concessional loans,

Weighted Voting system : 26 dev –61.6%, G7-47.8%, 163LDCs 38.4%

LDCs pressured UN to est. econ org.: soft loans refused by North

1960 North agreed to est. Int. Dev. Agency.:soft loans.


-Decolonization : increase of LDCs in UN.:

1964 est.d Group 77, UNCTAD: challenged existing order


-OPEC oil shock-increasing LDCs influence,call for NIEO. Increased voting share for OPEC, North agreed to have a generalized system of preference for LDC exports


UNCTAD more conciliatory

1980s & 90s

-Debt crisis: 1982s Mexico closely related to OPEC oil price increase: large sum of dollars deposited in North banks, Intl banks massive loans to LDCs to buy oil imports; -overborrowing by LDCs in 70s, LDCs dependence on debt relief assistance in 80s and 90s

IMF, WB imposed their conditions: LDCs open econ to trade, FDI, other links with north:

Liberalization, privatization, deregulation


SU, Czechoslavakia, Poland signed

1946s did not participate

1947, Marshall ERP invited EE and SU.

CMEA est.d 1949, except Yugo. :

-technical cooperation & joint planning

-central planning

-nationalization of factors of

-collectivization of agri

-reorient from west and solidify with SU.

1964 Int’l bank for Econ Cooperation

1971 Int’l Investment bank



-unrealistic conversion


West’s approach to CPEs

USA restricted trade with Communists:

-1949, US Export Control Act (pres. License export to CPEs)

-Coordinating Committee COCOM: US pressured allies to join to coordinate West embargoes of strategic goods to Soviet bloc;

-1951 Trade Agreement extension Act : withrdew concessions for com countries except Yug.

Сэтгэгдэл үлдээх

{ Сүүлийн хуудас } { 2 -р хуудас Нийт хуудасны тоо: 10 } { Дараагийн хуудас }

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Нүүр хуудас
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Бичлэгийн сан
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Сүүлийн бичлэгүүд

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Historical overview of Int'l political economy: Session 1
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