powers in world politics from a neorealist perspective.

The new
edition includes a chapter on the rise of China.
Ortman, S., and Whittaker, N. (2019), ‘Geopolitics and Grand
Strategy’, in J. Baylis, J. Wirtz, and C. S. Gray (eds), Strategy in the
Contemporary World, 6th edn (Oxford: Oxford University Press).
Analyses both the history and the contemporary relevance of
geopolitics in an era of globalization.
Rodriques, T., Perez, R. G., and Ferreira, S. E. (2014), The
Globalization of International Security (New York: Nova). Gives an
overview of the way that globalization has affected defence, security,
and strategy in the twenty-first century.
Waltz, K. N. (1959), Man, the State and War (New York: Columbia
University Press). Waltz’s classic work is one of the best sources for
the study of the causes of war.
To find out more, follow the web links
256

Chapter 16 Global political economy

NICOLA PHILLIPS
Framing Questions
• • How should we think about power in the contemporary
global political economy?
• • How does International Political Economy (IPE) help us to
understand what drives globalization and what is likely to
be its future?
• • What does IPE tell us about who wins and who loses from
globalization?

Reader’s Guide
International Political Economy (IPE) is a tremendously rich, exciting,
and relevant field of study. It builds on varied theoretical foundations
and covers a huge empirical terrain. Its vibrant debates centre on
questions about power, asking what forms power takes in the global
political economy, who or what exercises power, and with what
political, economic, and social consequences. Wherever one looks,
the developments in the global political economy which shape the
world we live in and most affect our everyday lives speak directly to
the themes and insights of IPE.
This chapter provides an introduction to the field and what it offers in
the study of contemporary globalization. It begins with an overview of
IPE’s theoretical contours and how the major approaches in the field
have evolved. The chapter then focuses on two core debates in IPE:
what drives globalization; and who wins and who loses as a
consequence. In discussing the first of these debates, it explores how
globalization has unfolded and the different ways in which
international political economists have understood the driving forces
behind these processes. In discussing the second, it looks in more
detail at the consequences of globalization, delving into IPE debates
about inequality, labour exploitation, and global migration. It ends with
a reflection on the future of globalization, in the context of the rise of
nationalist politics in some parts of the world, including the United
States, since the mid-2010s.
257

Introduction
IPE takes as its point of departure a very simple premise: that it is
impossible to understand the evolution of world affairs without
understanding how the political and the economic are intertwined.
Perhaps more than any other field, IPE has staked a major claim to
the study of ‘globalization’ (see Box 16.1), seeking to understand the
array of processes, trends, actors, and arenas that the term
encompasses. But in many ways, the field of IPE also developed as a
response to the processes of structural change that were associated
with globalization, building on well-established theoretical traditions in
International Relations (IR), political science, and political economy,
among other disciplines, in order to understand the changing global
political economy.
Box 16.1 IPE or GPE?
A tussle has emerged in the field concerning what it should be called.
International Political Economy is the most used label across
scholarly communities, and provides a common vocabulary for the
field, but it is clearly problematic. Many rightly view the ‘I’ to be
misleading. The field is not concerned with relations among states
(the ‘inter-national’); rather, all of the processes of structural change
are better considered to be global in scope, involving non-state and
private actors as well as, or independently of, nation-states. The label
Global Political Economy (GPE) has therefore found favour in some
circles as an alternative, as it is deemed to capture more of the field’s
thematic and theoretical substance.
Some people go further to argue that both ‘I’ and ‘G’ are essentially
unnecessary. All political economy is, by definition, international or
global—one only has to go back to the classical thinkers in political
economy, such as Adam Smith or Karl Marx, to understand that.
Attaching ‘I’ or ‘G’ also draws inappropriate distinctions between this
field and the field of comparative political economy (CPE), which has
been associated with the field of political science rather than IR. In
fact, we need both comparative perspectives (focusing on national
and regional dynamics) and global perspectives in order to
understand the contemporary world. ‘Political economy’, it is argued,
is therefore enough. However, disciplinary boundaries are powerful
things, and CPE and IPE unfortunately often remain somewhat
distinct from one another.
Lastly, the labels also need to be used as descriptive nouns, rather
than as the names of scholarly fields. We have already referred
several times to the global political economy, connoting the real-world
context defined by the political-economic processes and actors that
are of interest. To avoid confusion, this chapter adopts the acronym
IPE to refer to the field, and the noun ‘the global political economy’ to
refer to the complex arena of change which is its focus.
The central questions in IPE revolve around the concept of power.
Some accounts of the field’s remit emphasize the relationship
between power and wealth, which opens up a fascinating set of
questions about how power is exercised and by whom, and with what
consequences, in the contemporary global political economy. Others
emphasize the relationship between public and private forms of
power. Susan Strange, in one of the earliest statements about what
the field of IPE should look like, framed this influentially as the
relationship between ‘states and markets’ (Strange 1988). Many
people, rightly, came to view this as too restrictive a definition, as
states were not the only actors of significance in the global political
economy. One modified definition saw IPE as being about ‘the
interrelationship between public and private power in the allocation of
scarce resources’ (Ravenhill 2014: 18)—a useful way of thinking
about the broader scope of IPE which this chapter employs. For our
purposes, public power can be understood as the authority
concentrated in state institutions and actors, and by extension in
state-led international organizations. Private power can be
understood as the diverse forms of authority exercised by non-state
institutions and actors, including firms and global markets, private
regulatory bodies, non-governmental organizations (NGOs) (see Ch.
22), and social movements. The distinction between public and
private power is inevitably blurred, and perhaps increasingly so. Many
of the functions of public power are being assumed more and more
by private actors and institutions, with important consequences for
distribution and legitimacy in the global political economy.
IPE is not driven by a single, or even dominant, theoretical or
methodological approach. Some strands of the field choose to define
it as being concerned first and foremost with the study of institutions,
and how institutions shape the possibilities and patterns of
cooperation among states. Particularly in North America,
institutionalist theories have been a major theoretical influence on the
field. But this is not the full extent of IPE. Many other theoretical
frameworks have been applied to study its subject matter, stretching
across the conventional frameworks of liberalism, realism, and
Marxism, and reaching deeply into newer theoretical currents and
perspectives such as constructivism, feminism, and neo-Gramscian
theory.
Likewise, IPE’s rich thematic interests are generally considered to
centre on the trio of trade, production,
258
and finance. But they reach much more widely, touching on all of the
big issues in today’s global political economy, including development,
inequality, the environment, and migration. We are still feeling the
after-effects of the global financial crisis, the most significant
economic crisis since the Great Depression of the 1930s, which
began in 2008 with the collapse of the US financial firm Lehman
Brothers and was accompanied by a parallel debt crisis that engulfed
southern Europe around the same time. Europe continues to grapple
with the impact of an unprecedented refugee crisis which brings into
sharp relief the political-economic dynamics of migration and security,
at the same time as the United Kingdom’s proposed exit from the
European Union (EU) has raised existential questions about the
future of the bloc and its integration project. China continues its rise
to global economic dominance and increasing global political power,
alongside a number of other ‘rising powers’, auguring a
reorganization of the global order and the way it is governed. At the
same time, significant economic and political turmoil in some of those
economies, such as Brazil, has led to a questioning of the more
excited rhetoric about the ‘rising powers’ (see Ch. 5). The escalation
of protectionist trade policies by the United States since President
Donald Trump took office in 2016, bringing with it fears of a ‘trade
war’ between China and the United States, is contributing to renewed
anxiety about the health and stability of the global economy. Political
battles continue over the power of transnational corporations (TNCs),
notably in such matters as taxation and labour conditions in global
production. The global environment appears to be under relentless
threat, as the Trump administration consistently undermines
multilateral agreements and rejects climate change science, and the
President of Brazil elected in 2018, Jair Bolsonaro, intends
aggressively to roll back protection of the Amazon rainforest. The list
of contemporary preoccupations for international political economists
could go on and on.

Approaches to IPE
Introductions to IPE often refer back to the theoretical framing that
Robert Gilpin set out in 1987, when the field was beginning to
crystallize as a major subdiscipline of IR. In his now classic overview
of the new field, he identified three main bodies of theory that
underpinned the field: liberalism, Marxism, and nationalism
(sometimes also called realism) (see Chs 6, 7, and 8). These three
labels quickly became a standard categorization of approaches, and
often still provide the starting point of undergraduate and
postgraduate syllabi in IPE.
More recently, the field has evolved in more diverse directions,
embracing a wide range of bodies of theory to aid its task of
understanding the distributive consequences of the interplay between
private and public power. These ‘newer’ perspectives include social
constructivism, evolving forms of rational choice theory and
institutionalism, and varied directions in Marxist and critical thought,
such as neo-Gramscian theory, feminist theories, and
poststructuralism. Recalling the definition of IPE outlined at the start
of the chapter, each of these bodies of theory brings to bear a
different understanding of the nature of power, the relationship
between public and private power, and the consequences for the
distribution of material and power resources.
The liberal tradition in IPE builds on ideas about free markets and the
view that markets are the most efficient mechanism by which
resources can be allocated. States are not invisible in this tradition,
but their role should be limited to securing the conditions in which
markets can operate as freely as possible, and correcting some of the
undesirable consequences of their workings. A minimal role for the
state builds on the idea that governments are subject to pressures
from powerful interests in society, seeking advantages or ‘rents’ from
government policies, and therefore that governments potentially
distort the efficient operation of markets. The emphasis on both
states and interests runs through contemporary neoliberal theories of
IPE. Institutionalism, as noted above, is concerned first and foremost
with patterns of cooperation among states, and how the ‘inter-
national’ dynamics of power, refracted through the creation of
national and international institutions, shape outcomes in terms of
collective action among states (Keohane 1984; Milner 1997). Rational
choice theory, by extension, is concerned with the strategic decisions
made by actors in the global political economy; it assumes that actors
are ‘rational’ in their decision-making processes, possess fixed
interests and preferences, and adapt to particular structures of
incentives (Aggarwal and Dupont 2014).
Conversely, nationalist or realist perspectives on IPE focus closely on
‘inter-national’ relations among states
259
and see the global political economy as being shaped by competition
among states to maximize their power and security (Krasner 1976).
Their interest in political economy centres on economic policy
decisions by states that are assumed to be pursuing the goals of
economic nationalism and independence. However, they reserve
particular attention for the role of hegemonic power in the global
political economy, focusing on whether and how one hegemonic state
can create and enforce rules to maximize the stability of the system,
often through the creation of institutions.
By comparison, Marxism and its neo-Marxist offshoots are concerned
with the system—the structure of the global political economy—which
is defined by capitalism. Capitalism is understood to be about
competition between interests, as in liberal and nationalist theories,
but interests here are understood not through the primary prism of
states and governments, but rather as relating to class. The dynamics
of the global political economy are, in this sense, about the conflict
inherent in capitalism between those who own the means of
production and those who are oppressed as a means of generating
‘surplus value’ or profit in the system. Neo-Marxist theories
associated with the schools of dependency theory and world systems
theory, which were particularly influential in the 1960s and 1970s,
transposed these insights to a global level, arguing that the global
economy was divided into a ‘core’ and a ‘periphery’, and that class
conflict was international or global in scale (Frank 1967; Dos Santos
1970; Wallerstein 1979).
More recently, Marxist perspectives have been married with insights
from the Italian philosopher Antonio Gramsci (R. Cox 1981, 1987);
this strand of theoretical thinking has become particularly influential
as a part of a broader universe of ‘critical’ IPE. This body of work has
advanced the core Marxist concern with the power structures that
underpin capitalism, but also placed more emphasis than in previous
phases on the ‘ideology’, or sets of ideas, that themselves form a part
of the structure of the global political economy.
In this regard, these critical currents in IPE share some terrain with
social constructivist approaches (Abdelal, Blyth, and Parsons 2010).
The core question here concerns how ideas shape outcomes in the
global political economy. One strand of this research focuses on
questions of ideology, and how dominant ideologies—such as the
free market ideas associated with neoliberalism—themselves
structure the world around us and the principles or ‘logics’ by which it
functions. Other strands focus more on how ideas inform the
decisions which public and private actors take, and more specifically
the interests that define their preferences. Whereas Marxist theorists
would see these interests as being defined by class or position in the
capitalist structure, and rational choice theorists would ascribe them
to incentive structures that actors face, social constructivists are more
interested in the ideational dimensions of interest formation: how
individual perceptions and cultural influences can combine to shape
patterns of ideas, and, in turn, how particular sets of ideas become
dominant in the global political economy, and with what
consequences (see Ch. 12).
Feminist approaches to IPE bring many of these concerns together
(Peterson 2003; Bakker and Silvey 2008). While theoretical
orientations differ among feminist scholars, they are united in a focus
on how the power structures, interests, and ideas that underpin the
global political economy are fundamentally gendered in their nature
and consequences. Other chapters in this volume highlight many of
the questions that animate feminist theories of IPE, including the
many dimensions of the ‘gendered division of labour’ (see Chs 9
and 17).
There are many other theoretical approaches to IPE and many other
theoretical influences. It is not possible to survey them all in detail
here, nor even to do full justice to the depth and richness of those
mentioned above. However, this brief overview has highlighted two
aspects of IPE. First, IPE has come a long way since its early
conception as resting on the trilogy of liberalism, nationalism/realism,
and Marxism. It has become a flag under which many ships have
been able to sail, departing from different theoretical shores and
traversing the expansive thematic waters that characterize the field.
Second, IPE is a highly diverse field; sometimes what divides the field
can be more apparent than what unites it. Even so, IPE’s principal
approaches are united by a common set of theoretical and
conceptual pillars. While very different, and placing their emphasis in
dramatically different ways, it can be said that all of the above
theories rest on three ingredients of the study of political economy—
material capabilities, institutions, and ideas (R. Cox 1981). As the
introduction to this volume discussed, each body of theory will paint
these ingredients in different colours, will understand the relationship
among them in different ways, and will produce different pictures of
the outcomes of their interactions. But they stand as the core
ontological building blocks of approaches to IPE, providing a useful
starting point for exploring some of the field’s main issues and
themes.
260
Key points
• • IPE is an extremely rich and diverse field, which builds on
theoretical perspectives drawn from IR, political economy, and
political science, as well as insights from other disciplines.
• • The conventional description of IPE theory as organized
around liberalism, nationalism/realism, and Marxism no longer
captures the breadth and complexity of approaches to IPE.
• • Approaches to IPE are all concerned with the interplay of
material capabilities, institutions, and ideas in the global political
economy.
• • However, they understand the nature of these three elements
in diverse ways, and theorize their relationships differently.

What drives globalization?

Globalization is not new. What we refer to as ‘globalization’ in IPE
relates to the latest, contemporary phase in a long-standing historical
process. This phase can be said to have started in the 1960s and
1970s. It is also often referred to as ‘neoliberal’ globalization,
denoting the ideological principles on which it rests, and the forms of
political-economic organization that it has ushered in. However, the
globalization of the world economy began much earlier than this
conventionally indicated starting point. Many histories of globalization
go back to the sixteenth century in tracing the advent of a world
economy, for centuries centred on Europe and organized around
European colonialism, moving through the Industrial Revolution to the
late nineteenth-century world order of expanding world trade,
imperialism, technological advances, and the introduction of the
international Gold Standard as the basis for coordinating international
currency arrangements. The early twentieth century saw the outbreak
of the First World War, and with it the abandonment of the Gold
Standard, the proliferation of barriers to trade, and the period of
worldwide recession commonly called the ‘Great Depression’ in the
1930s, followed by the Second World War.
Towards the end of the Second World War, two commitments were
shaped which laid the foundations for the post-war international
economic order (Ravenhill 2014: 13). The first was what John Ruggie
(1982) famously termed ‘embedded liberalism’, in which governments
reached a compromise between the twin objectives of safeguarding
their domestic economies and pursuing the goal of full employment to
aid post-war recovery, on the one hand, and, on the other, opening
up domestic economies in order to re-establish the footing for
international trade and investment flows. The second commitment
was to the construction of an institutional architecture capable of
sustaining the stability of the world economic order and achieving
renewed prosperity following the period of war in Europe and Asia.
The result was the so-called Bretton Woods system, named for the
location of an international meeting held in 1944, which yielded the
creation of the major international economic institutions that still
characterize the multilateral landscape: the International Monetary
Fund (IMF); the World Bank (which was originally called the
International Bank for Reconstruction and Development); and the
General Agreement on Tariffs and Trade (GATT), which later became
the World Trade Organization (WTO). At the same time, the project to
rebuild Europe generated a process of deepening European
integration, with the Treaty of Rome, signed in 1957, laying the
foundations for the European Economic Community (EEC) and
eventually the European Union (EU).
The result was the achievement of unprecedented rates of economic
growth and advances in living standards in the post-1945 period,
leading the renowned historian Eric Hobsbawm (1994) to refer to this
period as a ‘Golden Age’. However, not all of the countries and
regions of the world enjoyed this accelerating growth and
developmental progress, and the gap between what were called at
the time the ‘developed’ world and the ‘developing’ worlds widened.
At the same time that many economies in East Asia were achieving
rapid growth, leading to talk of an ‘East Asian miracle’, other regions,
notably Africa, were falling further and further behind.
Two schools of thought emerged to explain this divergence in
development trajectories. The first, modernization theory, popular in
the 1950s and 1960s, mapped out a route to development based on
the experiences of what many referred to as the ‘advanced’ Western
world, plotting a path for the less developed countries to ‘catch up’, in
the parlance of the time, with North America and Europe. Following
this prescribed path to modernization would yield developmental
success; deviating from this route would result in developmental
failure. Hence the divergence in development trajectories was
understood as a result of inappropriate strategies and
261
the absence in the developing world of the political and cultural
characteristics of Western ‘modernity’.
The second, underdevelopment theory, which gained currency in the
1960s, took a different view. Its variants drew on Marxist perspectives
to argue that ‘catching up’ was not possible for all, because,
alongside the lasting effects of colonialism, the fundamental truth
about capitalism was that development depended on
underdevelopment. In other words, the Third World’s continuing
underdevelopment was not a product of its failure, but rather a result
of structural limitations to the possibilities for it to achieve
development. The ‘terms of trade’ in the international economy—a
concept which highlights the relative competitiveness of national
economies by measuring the relationship between the price that a
country’s exports can command in international markets and the price
that country pays for its imports—worked systematically against the
Third World and its development prospects. In André Gunder Frank’s
famous formulations, capitalism generates ‘economic development
for the few and underdevelopment for the many’, as ‘development
and underdevelopment are two sides of the same coin’ (Frank 1967:
8–9).
The 1970s marked the end of the Golden Age. The decision in 1971
by the administration of US President Richard Nixon to allow the
dollar to float freely is commonly viewed as the starting point of the
contemporary globalization of financial markets. The oil crisis of 1973
ushered in a period of ‘stagflation’—economic stagnation combined
with high inflation—prompting a period of crisis across the advanced
industrialized world. To make matters worse, a turn by countries such
as the United States to greater trade protectionism—the erection of
barriers to restrain free trade—undermined the post-war commitment
to economic openness.
Meanwhile, the evolution of the Bretton Woods institutions had sowed
seeds of discontent among developing countries. They viewed the
IMF, the World Bank, and the GATT system either as neglectful of
developing countries’ interests, or as being organized in such a way
that their interests were systematically marginalized. In other words,
the governments of developing countries encountered a multilateral
system in which they had very limited bargaining power, and which
functioned to serve the interests of the powerful states and capitalist
forces. Together with the possibilities that high oil prices and control
over commodities afforded, these concerns led developing countries
to turn to each other in an effort to rectify the disadvantageous terms
on which they were integrated into the international economy. The
Non-Aligned Movement (NAM) and the New International Economic
Order (NIEO) were key political movements that emerged over the
1960s and 1970s, oriented to reducing developing economies’
dependence on the international economy as well as their
vulnerability to adverse terms of trade.
However, a series of economic and political developments prevented
these movements from bringing about conclusive adjustments to the
power structures of the world order. Following an explosion of
available credit in the international economy over the 1960s and
1970s, many developing countries, particularly in Latin America, had
borrowed extensively in international financial markets and
accumulated massive amounts of debt. The debt crisis that ensued at
the start of the 1980s, triggered by the US government raising
interest rates, both caused these debts rapidly to become unpayable
and acted as a significant brake on development in the affected
countries. At the same time, conservative governments were elected
in the United States, the United Kingdom, and elsewhere; they
interpreted the experience of stagflation, growing state intervention
(especially in Europe), and resurgent political conflict to signal the
exhaustion of the post-war model associated with the Golden Age.
So started the ‘neoliberal counter-revolution’ (Toye 1993). Strongly
associated with the traditions of Western liberal thought, the
neoliberal counter-revolution was based on the assumption that
‘human well-being can best be advanced by liberating individual
entrepreneurial freedoms and skills within an institutional framework
characterized by strong private property rights, free markets and free
trade’ (Harvey 2005: 2). This assumption quickly gained the status of
orthodoxy—neatly summed up in the phrase ascribed to UK Prime
Minister Margaret Thatcher, ‘there is no alternative’—and formed the
basis for the development of a distinctive policy agenda to achieve an
extensive programme of trade liberalization, deregulation, and
privatization worldwide. This programme was broken down into
something resembling a ‘recipe’ of policy change, which came to be
called the Washington Consensus (see Box 16.2).
The Washington Consensus was rolled out aggressively across the
developing world, with the Bretton Woods institutions becoming the
main channels for this purpose. Their ‘structural adjustment
programmes’ (SAPs)—programmes imposing major economic policy
reform packages on developing countries—made compliance with
these Washington Consensus prescriptions a condition of access to
loans and financing from those institutions, which developing
countries needed urgently
262
to achieve growth and development following the debt crisis. Colin
Leys put it well when he observed that, by the end of the 1980s, ‘the
only development policy that was officially approved was not having
one—leaving it to the market to allocate resources, not the state’
(Leys 1996: 42).
Box 16.2 The policy prescriptions of the Washington Consensus
• • Maintenance of fiscal discipline (budget deficits should not
exceed 2 per cent of gross domestic product (GDP))
• • Reordering of public expenditure priorities (reduction and
elimination of subsidies; prioritization of spending in education,
health, and infrastructure)
• • Tax reform (broadening of tax base; maintenance of
‘moderate’ marginal tax rates)
• • Maintenance of positive real interest rates (to discourage
capital flight and increase savings)
• • Maintenance of ‘competitive’ exchange rates
• • Trade liberalization
• • Elimination of barriers to foreign direct investment
• • Privatization of state-owned enterprises
• • Deregulation of the economy
• • Enforcement of property rights
Williamson 1990
Yet neoliberalism was not just about domestic policy change. It
pushed forward a vision of the global political economy as resting on
deregulated and globalized financial markets, free trade, and
globalized production structures in which TNCs were free to roam the
world and organize their production activities wherever they found the
most conducive conditions. The globalization of trade, finance, and
production are discussed in finer-grained detail elsewhere in this
volume (see Ch. 27). The extent to which any of these facets of
globalization have been achieved fully remains open to debate: is
global trade really ‘free’, for example, or indeed ‘global’? The question
of whether the process of ‘globalization’ has stalled in the first two
decades of the twenty-first century will also preoccupy us for some
years to come, and we will reflect on this towards the end of the
chapter. Nevertheless, the far-reaching and on-going consequences
of neoliberal globalization cannot be doubted, and debates rage in
IPE about their implications for the distribution of power and wealth.
Before considering these debates, however, let us first look through
IPE lenses at the question of what has driven these processes of
global political-economic change.
One set of interpretations highlights the role of ideas and ideology in
driving global political-economic change. Scholars associated with
‘critical’ strands of IPE have been particularly keen to expose the
ideological underpinnings of globalization. Robert Cox, the
foundational voice in articulating a critical approach to IPE,
established the core insight that the ideational and material
dimensions of power are ‘always bound together, mutually reinforcing
one another, and not reducible one to the other’ (R. Cox 1983: 168).
Material power relates to control over material resources, including
raw materials, capital, and markets, and was traditionally more
commonly the focus across the field of IPE. Yet ideational power is
arguably even more important: that is, the particular ways of thinking
about the global political economy that neoliberalism has come to
impose on a wide variety of public and private actors. Just as
neoliberalism is ‘constructed’ as an ideological project (Peck 2010),
so too is globalization ‘constructed’ by sets of ideas and associated
discourses that have come to represent a ‘common sense’ of the
contemporary era.
A second set of interpretations focuses on the powerful interests and
institutions that drive globalization. According to this perspective, the
processes of change that make up globalization are driven by the
changing political landscape in which, above all, powerful corporate
interests have risen to dominance. These include both financial
corporations (banks and other financial firms) and non-financial
corporations associated with global production. The power of these
private actors is not a new phenomenon—think, for instance, of the
power of the East India Company or its counterpart, the Dutch East
India Company, in the early seventeenth century. But it is
nevertheless the case that the rapid rise of the multinational
corporation, more commonly now called the TNC, was the key
phenomenon of the post-war world economy. TNCs are now
considered to be among the most powerful actors in the global
political economy, increasingly able to dictate the terms of production
and trade, and the key driving forces behind globalization. However,
this does not mean that states are now irrelevant in driving or
governing globalization (see Opposing Opinions 16.1). As much as
TNCs wield enormous political power and we can find ample
evidence of their using this power to ensure that governments act in
accordance with their preferences, states and international
institutions have also been—and remain—pivotal to creating the
conditions in which TNCs can operate.
A third perspective on the drivers of global political-economic change
underscores the role of technological revolution in creating the
conditions for globalization. Firms and economic actors are able to
operate globally
263
as a result of the compression of time and space that has been
achieved by the evolution of information technologies. Territory and
distance are no longer barriers to international economic exchange,
and economic transactions have become ‘virtual’ in character: money
moves around the world not in physical form, but instantaneously
through computers. The logistics revolution, through advances in
such areas as refrigeration technologies and transportation and
distribution methods, has also enabled the globalization of production
and trade in a way that could barely have been envisaged even 50
years ago. Seen through IPE lenses, then, control over technology is
a key attribute of material power. The story of globalization is at least
in part a story of the forms of political and economic activity that
technological advances have facilitated, and the power that control
over technology can confer on particular actors in the global political
economy.
Opposing Opinions 16.1 National states are irrelevant in an era of
economic globalization

For
National states are ill-equipped to govern globalization. The
processes associated with globalization are, by definition, global.
They are beyond the capacities of national states to govern. Authority
in the global political economy has therefore been dispersed to a
wide array of private actors, civil society actors, and international
organizations that are more able to govern ‘transnationally’.
Markets and global capital have undermined states’ power and
authority. Global capital operates beyond the political control of
states. The deregulation of finance and liberalization of trade have
eroded the power that states previously were able to exercise over
economic processes and actors.
TNCs’ political power far exceeds that of many governments.
TNCs are able to wield their political power, especially across the
developing world, to diminish the capacity of states and governments
to regulate effectively. States wanting to attract investment and trade
are bound by the preferences of foreign capital and TNCs.
Global processes have eroded policy space. Governments are no
longer able to control national borders, and policy autonomy has
been eroded by the need to accommodate global economic and
political forces.

Against
Nation-states remain an essential part of global governance.
Many of the major international organizations are intergovernmental
in character. Nation-states remain the point of reference for many civil
society organizations. They are also pivotal in putting in place the
governance conditions in which globalization can thrive, and in
providing mechanisms of democratic accountability for its
consequences.
Powerful states have been the ‘authors’ of globalization.
Propelled by the dictates of neoliberalism, states themselves have
been responsible for their decreased role in economic governance,
as they continually act to maintain the conditions for deregulation and
liberalization. States are often in conflict with private actors, but not
because they have been ‘eroded’.
Not all states act the same. Some states are more active in
regulating global economic processes and actors than others. It is an
excessive generalization to suggest that states have become passive
in the face of corporate power.
Governments retain significant policy discretion. National policy
frameworks vary considerably, and governments retain control over a
wide array of policy instruments. As the experience of the global
financial crisis shows, states are instrumental in managing economic
crises and dealing with the consequences of economic instability. The
surge of nationalism in some countries in the 2010s, along with the
global economic policies pursued by the US administration of Donald
Trump since 2016, also demonstrate that there is no inevitability that
state policy will be consistent with neoliberal globalization.
1. Do TNCs now run the world, rather than national governments?
2. In what ways have states, in different parts of the world,
adapted to deal with the challenges of globalization?
 3. Does it make any sense to talk in general about ‘national states’
in debating these issues, or should we distinguish between
different types of states?
For advice on how to answer these questions, see the pointers
Finally, a fourth interpretation directs attention to the power of states.
For much of the time that IPE has existed as a field, this power has
been centred in the United States. The origins of neoliberal
globalization coincided with the consolidation of US post-war
hegemony and the period denoted by it, often called the Pax
Americana. Indeed, with its origins in the discipline of IR, much early
IPE scholarship was concerned first and
264
foremost with questions of US hegemonic power and its implications
for patterns of cooperation among states and the institutional
apparatus of world politics. Just as important is the connection drawn
between the globalization project and a set of distinctively US
economic interests, in particular the links between the rise of the TNC
and the consolidation of US economic power. For some scholars in
critical IPE, the debate is more usefully about how the neoliberal
globalization project is associated with an idea of US ‘imperialism’,
facilitating the global dissemination of a distinctive ideological agenda
and a set of material interests, channelled through the power
structures of international institutions.
However, the vision of globalization as the expression of state power
is slowly but surely changing. It can no longer be assumed
unproblematically that the US occupies a position of global
dominance: the rise of China and other states has disrupted this
equation of globalization with US hegemony. In one sense,
globalization has accelerated as China, India, and the countries of the
former Soviet bloc have become increasingly integrated into the
global political economy since the
265
start of the 1990s. In a different sense, their rise—particularly that of
China—appears to be upending the established order, especially with
regard to economic power (see Case Study 16.1). At the same time,
it can no longer be assumed that powerful states are sponsoring
globalization. The rise of nationalist populist politics across some
parts of the world, including in the United States under the
administration of Donald Trump, has featured a form of ‘anti-
globalism’ which cuts against the pillars of neoliberal globalization,
and could reasonably be interpreted as an attempt to ‘roll back’ the
advance of global economic liberalization.
Case Study 16.1 The BRICs and the rise of China

Donald Trump and Vice Premier Liu He of the People’s Republic of

China speak in the Oval Office
© ZUMA Press, Inc. / Alamy Stock Photo
Since the late 1980s, the dramatic growth of the Chinese and Indian
economies, and that of some other emerging economies, has been
one of the most notable features of the global political economy. This
group of countries have attracted various labels, of which the ‘rising
powers’ and the ‘BRICs’ became the most popular—the latter
acronym referring to the principal countries deemed to fall within the
group: Brazil, Russia, India, and China (see Case Study 5.1). The
term BRICs was first coined in 2001 by Jim O’Neill, then chief
economist at Goldman Sachs, to identify the four economies that had
the potential to become the largest and most influential economies in
the twenty-first century. South Africa is often added to that list. In
reality, all of these economies and countries are very different, and it
is considered by many a big stretch to include them all in a single
category. But this label nevertheless caught on, particularly in global
financial and policy communities.
China is of course the key economy in this grouping, becoming the
world’s largest exporter in 2010, and in 2014 overtaking Japan for the
first time as the world’s second largest economy. Predictions that the
Chinese economy will have outstripped the US economy to become
indisputably the world’s largest by 2050 run alongside continued
concerns about slowing growth and fears of impending recession.
Since 2016, the Chinese currency, the yuan, has been included in the
basket of currencies used by the IMF, thus becoming an international
reserve currency. China’s increasing economic power has also been
evident in its pursuit of assets and opportunities across the world,
with regions such as Africa and Latin America becoming major
destinations for Chinese investment. China is the largest foreign
holder of US debt. In mid-2018 its holdings of US Treasury bonds,
bills, and notes reached some US$1.2 trillion, equivalent to about 20
per cent of US debt held by foreign countries, and some 5 per cent of
total debt. If the Chinese were to sell off large quantities of this debt,
or stop buying US debt in the future, the implications for the US
economy—and by extension the global economy—would be very
serious indeed.
The election of Donald Trump in the United States in 2016 ushered in
a period of increasing economic tension between China and the US.
Trump’s rhetoric has consistently centred on the ‘unfair’ trade
advantage enjoyed by the Chinese economy, and its implications for
the jobs and wages of American workers. This rhetoric crystallized in
an escalating trade dispute in 2018, when the imposition by the US of
tariffs on imports of goods from China (as well as some other
countries) led to retaliatory tariffs imposed by China, raising the
prospect of a destabilizing ‘trade war’ between the two largest
economies in the world.
The questions for students of IPE are pressing. Is China’s rise fuelling
the emergence of a new global political-economic order, replacing the
order based on neoliberal globalization and US hegemony? What are
the consequences for global governance of China’s increasing power
and political assertiveness? What are likely to be the political and
economic consequences of significant tension, or indeed a trade war,
between China and the United States? Are we once again looking at
an accelerating trend towards protectionism in the global economy?
The short answer is that it remains too soon to know, but it is clear
both that the implications of China’s rise will be significant, and that
what happens in and around the Chinese economy has wide-ranging
repercussions for the global economy.
Question 1: In what ways and to what extent is China now a major
economic power in the world?
Question 2: Are the ‘rising powers’ overturning the established global
political-economic order?
Key points
• • Globalization is not new, but rather is a process that has
proceeded through many phases since the sixteenth century.
• • The post-war period was characterized by an increase in
international cooperation to restore stability in the international
economic order, and re-establish economic openness following
an extended period of war and crisis.
• • The latest phase of globalization is associated with
neoliberalism, emerging as a response to the economic crisis of
the 1970s and the ascendance of neoliberal ideas about how
the global political economy should be organized.
• • IPE scholars emphasize a range of drivers behind
contemporary globalization, which include the role of ideology
and ideas, the power of private economic interests, the
technological revolution, and the evolution of state power.
• • There is increasing debate as to whether globalization is now
stalling or being ‘rolled back’, as nationalist, anti-globalist
politics have become dominant in the United States and
elsewhere.

Who wins and who loses from globalization?

Readers will recall that our definition of the field of IPE placed
emphasis on the interaction between public and private power in
shaping how scarce resources are distributed. In other words, IPE
provides rich material for understanding who wins and who loses
from globalization. We will focus our attention here on a number of
issues that shed interesting light on the dynamics of distribution in the
global political economy: globalization and inequality; globalization
and labour exploitation; and globalization and migration.

Globalization and inequality

Much debate in IPE has revolved around the relationship between
globalization, poverty, and inequality. It is generally accepted that
expectations that neoliberal globalization would lift the world’s
population out of poverty have been misplaced. Between 1990 and
2015, the World Bank estimates that the number of people living in
extreme poverty fell to under 10 per cent of the global population. It
estimates a slight further decline for 2018 to 8.6 per cent, although,
significantly, the rate of improvement also slowed between 2015 and
2018 (World Bank 2018). However, these aggregate figures hide the
uneven nature of this progress. The East Asian and Pacific regions
account for the bulk of the good news on global poverty, where the
dramatic decline in poverty in China has been particularly noteworthy.
In Latin America, the data are heavily skewed by upward trends in the
large economies, specifically in Mexico and Brazil. Sub-Saharan
Africa now accounts for most of the world’s poor, with 41 per cent of
the region’s population living in poverty in 2015. The numbers there
were also rising in 2018, rather than declining as in the rest of the
world. Significantly, while there has been an overall drop in extreme
poverty across the world, there has been much less progress on
poverty in general: the number of people living between the $1.25 per
day extreme poverty line and the $2 per day poverty line in fact
doubled between 1981 and 2008 (World Bank 2012). Despite some
good news on global poverty during the period of neoliberal
globalization, therefore, it is fair to say that we have not seen the
improvements that many thought globalization would bring about.
However, the major trend of our time has been explosive growth in
levels of inequality, which can rightly be considered to be ‘without
historical precedent and without conceivable justification—economic,
moral or otherwise’ (Pieterse 2002: 1024). Yet, critically, it is not
primarily a worsening of poverty that has produced greater levels of
inequality; rather, it is the dramatic acceleration of wealth
accumulation that has caused such a stretching of the spectrum.
During the 1990s, the world’s rich benefited disproportionately from
global growth, while the poor’s per capita consumption increased at
only half the average global rate (Edward 2006). Between 1993 and
2001, somewhere between 50 and 60 per cent of the increase in
world consumption accrued to about
266
10 per cent of the world’s population (Wade 2014: 327). In early
2018, Oxfam’s annual calculations revealed that 82 per cent of the
wealth generated in 2017 went to the richest 1 per cent of the global
population, while the 3.7 billion people who make up the poorest half
of the world saw no increase in their wealth at all. Oxfam charts an
annual increase in billionaire wealth by an average of 13 per cent
since 2010, which exceeds annual average wage growth by six times
over the same period, and an unprecedented increase in the number
of billionaires between March 2016 and March 2017 (Oxfam 2018).
The question for students of IPE is how to explain these vast
divergences in wealth, and the fact that the gaps continue to widen.
Does globalization cause greater levels of inequality—and if so, does
it matter? Views differ dramatically. Some contend that inequality is
not a problem so long as everyone is getting richer: what does it
matter if we have more billionaires than ever, generating wealth, if
extreme poverty is falling and the possibilities for social mobility are
greater than ever? According to this logic, globalization is the key to
everyone getting richer, as it provides opportunities and removes
barriers to development.
Others hold that the dynamics of globalization itself are responsible
for growing inequality. While globalization has created opportunities
for the massive accumulation of wealth by global elites, it has also left
untouched the structural features of the global economy that work
against development for large parts of the world and their population.
In addition, the skewed distribution of power in the global political
economy ensures that inequalities remain entrenched. And yes, this
argument holds, inequality does matter: if we look across the world in
the mid-2010s, for instance, one of the dominant themes in national
politics is the backlash from those who are on the sharp end of
globalization, those who are on the losing side of inequality, and
those who feel ‘left out’ of the benefits that globalization was
supposed to bring. This has been a powerful explanation for political
events, including the election of nationalist and populist leaders in
many countries, the outcome of the UK referendum on ‘Brexit’ in
2016, and instances of civil unrest such as the rioting in Paris at the
end of 2018.
Globalization and labour exploitation
The second theme of this section, labour exploitation in the global
economy, is also associated strongly with the dynamics of inequality.
Recall that Marxist theory teaches that labour exploitation is an
intrinsic feature of capitalism, as the outcome of the class conflict
between capital and labour. But one does not have to be a Marxist
theorist to recognize that global production is built on processes
which maximize the profits for firms and private actors, and that one
of the ways in which this happens relates to the conditions in which
people across the world work.
Many sectors of global production are marked by intense competition.
TNCs coordinating networks of global production put huge
commercial pressures on producers and supplier firms with regard to
cost and supply conditions. Producers and suppliers in turn frequently
seek to manage these pressures by reducing the share constituted by
labour in production costs. To do so, they emphasize the
maintenance of a highly ‘flexible’ workforce—the ability to hire and
fire at will in order to respond to changing conditions, to hire workers
without any formal contract or on short-term contracts that do not
involve extensive obligations in relation to rights and entitlements, to
keep wages low, and to make sure workers are easily ‘disposable’.
The globalization of production has advanced as firms have sought
the advantages of cheap and flexible labour across the world, with
little or no regulation by national governments of their activities.
A direct consequence is the explosion of precarious, insecure,
unprotected, and exploitative conditions of work, which have become
the hallmark of the global political economy. Informal, migrant, and
contract workers have become the backbone of the global labour
force. This labour force has also become strongly ‘feminized’, and
women workers are among the most vulnerable to exploitation in
many arenas of the global economy. The concept of ‘sweatshops’
has been familiar for several decades, and there have been many
instances in which large corporations have been exposed for
sweatshop conditions in factories and other appalling abuses of
workers’ rights. Nike, Gap, Amazon, and Apple are all examples of
the large numbers of brand firms that have suffered damaging
exposures of working conditions in their supply chains, some of which
have responded by trying to position themselves at the forefront of
the corporate social responsibility (CSR) agenda. Across the world
we encounter the problems of zero-hours contracts, poor and
exploitative conditions of work, and low wages. At the extreme end of
the spectrum of labour exploitation are production models reliant on
the use of forced labour and child labour (see Case Study 16.2).

Globalization and migration

The final theme in this section, migration, provides a fascinating
insight into the dynamics of inequality in the global political economy.
We live in an ‘Age of Migration’ (Castles and Miller 2009), in which
the
267
number of international migrants reached 258 million in 2017, up from
220 million in 2010 (UN 2017a). Of course, migration is not new: it
has underpinned the history of humanity. But what is new about the
contemporary period is that migration flows are now truly ‘global’—no
longer centred on Europe or on a ‘south–north’ movement from
poorer to richer countries, but now in large proportion also ‘south–
south’. Much of this south–south movement involves migration within
regions, such as Southeast Asia, southern Africa, or South America.
The key phenomenon in China, Brazil, and elsewhere is also that of
massive internal movements of people within countries, which are not
captured in these estimated figures on inter-state migration. Migration
shapes the political economy of all regions of the world. It is
impossible to understand the contemporary global political economy,
and the processes wrapped up under the heading ‘globalization’,
without understanding migration.
Case Study 16.2 Slavery and forced labour in global production

© Sk Hasan Ali / Shutterstock.com

The International Labour Organization (ILO) estimated in 2017 that
there were 24.9 million people working in conditions of forced labour
across the world. Of these, about 16 million were in the private
economy, 4.8 million in forced sexual exploitation, and 4.1 million in
forced labour imposed by state authorities. The ILO also estimated
that 152 million children were in child labour across the world (ILO
2017).
The problems of forced labour are encountered in all parts of the
world, including in those countries we tend to think of as ‘rich’. In
Brazil, government data indicated that 21,000 workers were released
from conditions defined as ‘slave labour’ between 2003 and 2010, as
a result of a major effort to address the problem of slavery in that
country. These workers were mainly in the agricultural economy, in
sectors such as sugar cane, cattle ranching, charcoal, and coffee.
The 2018 Global Slavery Index (GSI) estimated that there may still be
as many as 369,000 people working in conditions of slavery in Brazil.
To give a handful of further examples, the estimated figure is 136,000
in the UK, 610,000 in Thailand, 1,045,000 in the Democratic Republic
of Congo, 129,000 in France, and 3,186,000 in Pakistan (GSI 2018).
Forced labour also occurs across a wide range of industries and
sectors that make up the mainstream of global production,
encompassing manufacturing, agricultural, and extractive industries.
The United States Department of Labor (2018) confidently identifies
148 goods from 76 countries as being produced using forced or child
labour, and its list of suspected goods is very much longer. It is
generally thought that we all have garments in our wardrobes made
using forced or child labour, will routinely eat food whose ingredients
are produced using forced labour, and will conduct our working and
personal lives using computers, mobile phones, and other electronic
devices produced by people working in these conditions.
Forced labour takes a huge variety of forms. Workers are often
coerced into labour arrangements in which there are no formal
contracts, and where they assume debts to employers or recruiters,
meaning that they are unable to leave, and these debts are
manipulated so as to become unpayable. Wages are withheld until
the end of a period of time, and then are not paid or paid at pittance
levels. Workers are prevented from freely leaving jobs through
imprisonment and coercive restrictions on their physical movement,
threatened or actual violence (against them and family members or
co-workers), and/or the confiscation of documents and possessions.
Severely exploitative conditions are invariably associated with harsh,
degrading, and dangerous conditions of work, violations of workers’
labour rights and often human rights, and diverse forms of coercion
and manipulation designed to make people work harder, for longer,
and for less money in intensely competitive and cost-driven
commercial environments.
Question 1: What forms does forced labour take in global
production?
Question 2: Is it surprising that forced labour remains so common in
the contemporary global economy?
The many different faces of migration reflect the contours of global
inequality discussed above. In the context of neoliberalism, the
outcomes for different kinds of migrants are very different. At one end
of the spectrum, highly mobile, highly paid, highly educated
professionals use their global mobility as a means of generating
opportunities for themselves. Their mobility oils the wheels of global
economic activity in sectors as diverse as commerce, finance,
education, and medicine. At the other end of the spectrum is the kind
of global labour force described in the previous section, where
migrants are disproportionately represented in the low-paid, low-skill
parts of global production, or in sectors supplying services to the
more privileged, professional parts of society, including ‘lifestyle’
services such as
268
domestic work. Such patterns of migration connected with domestic
service are global, and include as examples the movement of
workers from the Philippines to Hong Kong, Mexico to the United
States, Nicaragua to Costa Rica, or Indonesia to the United Arab
Emirates, as well as movement within countries.
The realities of precarious employment are magnified by the
particular vulnerabilities of migrant workers. Migrant workers often
lack the power to engage in political action concerning wages and
working conditions, and they do not possess the rights and
entitlements associated with citizenship or residency. Laws governing
immigration or internal movements often act to strip workers of labour
or welfare protections, and constrain their ability to seek satisfactory
working conditions by changing employers. These laws can also
provide mechanisms for employers to manipulate workers,
particularly if they are undocumented, such as the threat of
denunciation to immigration authorities. The global migrant labour
force is strongly associated with economic need and the
requirements of supporting families at home.
In one sense, this suggests that migrant workers are among the
losers from globalization. The deregulation of labour markets, the
power of private firms, the retraction of welfare and social protection
under neoliberalism, the demand for abundant and cheap labour in
global production, and the massive accumulation of wealth in some
sections of society—all have fuelled a situation in which many
migrant workers have found themselves at the sharp end of
globalization. An alternative viewpoint would argue that increased
possibilities for mobility under globalization have presented
opportunities for people to migrate to earn better wages, achieve
better levels of education, and enhance their social mobility. Clearly,
much depends on how migration is governed in the global political
economy, particularly in relation to working conditions for migrant
workers and the kinds of government policies that govern immigration
or the movement of people.
Conversely, an IPE lens reveals that migration is itself a driver of
globalization. This is not just in an economic sense, relating to the
construction of a highly flexible global labour force, or the supply of
global talent to particular industries. Migration also has important
implications for the global economy, because increasing levels of
global migration are associated with vast flows of money through
global and national financial systems. Officially recorded remittances
to the developing world—the sums of money that migrants send
home to their families—stood at $413 billion in 2016 (UN 2017a).
Finally, migration has important cultural implications. Particularly in
the world’s ‘global cities’ (Sassen 2001), migration has played an
important part in some of the dramatic cultural changes that we
associate with globalization, and consequently the emergence of new
political dynamics across the world.
Key points
• • IPE is concerned with the distribution of power and material
resources in the global political economy, and lively debates
centre on who wins and who loses from globalization.
• • Globalization has been associated with a dramatic widening of
inequality, between and within countries, and between and
within social groups.
• • Labour exploitation underpins the generation of wealth and
profits in the global political economy.
• • Migration has become truly ‘global’ in its scope, associated
with the movement of highly paid professionals at one end of
the spectrum, and low-paid, low-skill workers at the other.
• • Migration is itself a driver of globalization, in both economic
and cultural terms.

The future of globalization

As a historical process, globalization has not unfolded in a linear
fashion, and the account of globalization that we outlined earlier in
this chapter included many twists and turns. At the end of the 2010s,
we have arrived at a point where we are once again questioning the
future of globalization, as anti-globalist, nativistic, and populist strains
of politics have gained ground in countries as diverse as the United
States, Brazil, Hungary, the Philippines, France, and the United
Kingdom, among others. Across the world, left-leaning politics have
long been characterized by a questioning of the value of
globalization, given all of its uneven social and economic
269
consequences as we have outlined in this chapter. Does this mean
that the process known as ‘globalization’ has now run aground?
In many ways, this conclusion is probably premature. We should be
wary of basing sweeping assumptions about the historical
significance of change on recent turns of events. It remains to be
seen whether the system of globalization will hold, so to speak, and
withstand this moment of resurgent nationalism. Much also depends
on what we mean by ‘globalization’. We can legitimately distinguish
between globalization as a historical process and its current
neoliberal incarnation. It might be valid to conclude that neoliberal
globalization is under significant strain: indeed, we have been talking
about the exhaustion of the neoliberal model for some time. But this
model is not the only possibility. As we have seen, while it does not
conform with the neoliberal development model, the rise of China
remains premised on a particular vision of globalization—and indeed
is marked by a globalist outlook. It may be that rather than witnessing
its demise, we are in the process of shifting to the next phase in the
historical evolution of globalization, one perhaps shaped more by
China and the rising powers than by the United States and other
Western powers. Yet we do not know what this alternative model will
look like, nor how politically and economically acceptable it would be.
Alternatively, it may be that the forces of globalization are now so
powerful—centring on the enormous weight of financial and non-
financial corporations—that the status quo will be maintained despite
a prolonged period of turbulence. The 2008 financial crisis was widely
expected to usher in significant change in the way the global political
economy is governed, especially in relation to financial regulation, but
this has not proved to be the case. A further scenario is that the
nationalist impetus could prevail, as the values of internationalism
and globalism are overwhelmed once again by reactionary populist
politics. At the very least, to avoid this scenario, there will need to be
a convincing response to the crushing inequalities in the global
political economy which we have touched on in this chapter.
Key points
• • At the end of the 2010s, we have arrived at a point where we
are once again questioning the future of globalization, as anti-
 globalist, nativistic, and populist strains of politics have gained
ground in diverse countries.
• • We should be wary of putting too much weight on current and
recent events in predicting the future of globalization.
• • Nevertheless, the current neoliberal model of globalization is
clearly under significant strain, and it is not yet clear what the
future will hold.

Conclusion
This chapter has introduced the rich resources that IPE offers for
understanding globalization. It has emphasized that IPE is a
tremendously diverse field, encompassing a range of theoretical and
methodological traditions and an expansive terrain of empirical
interests. Debates about the nature and consequences of
globalization continue to rage in IPE, and this chapter has captured
some of them by focusing on two areas of contestation: what drives
globalization, and who wins and loses from the processes associated
with it.
What will the future of IPE hold? No doubt, the lively debates—and
disputes—among different parts of the field will continue to thrive.
Diverse theoretical preferences and different methods of analysis will
continue to vie with one another for greater purchase on the subject
matter of IPE. When these debates are conducted in the spirit of
open exchanges of perspective and view, they are hugely valuable in
advancing the field and enriching the work that goes on within it. But
greater dialogue among different schools of IPE is also desirable and
important, based on a recognition that starting with the big questions,
and bringing a range of theoretical perspectives and methods to bear
on the task of answering them, can only enhance the breadth and
depth of our understanding. After all, much is at stake in
understanding how the global political economy works, and in whose
interests.
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Questions
270
1. 1. What are the key differences among the major theoretical
perspectives in IPE, and where, if at all, do they share common
ground?
2. 2. What were the characteristics of the post-war international
economic order, and what were the reasons for its eventual
breakdown in the 1970s?
3. 3. What are the main characteristics of neoliberal globalization?
4. 4. How are the driving forces of globalization understood in IPE,
and which explanations do you find most compelling?
5. 5. Are ideas as important as material resources and institutions
in shaping the global political economy?
6. 6. What do we know about the consequences of the rise of
China for the global political economy?
7. 7. How can we explain the vast increase in global inequality
since the 1980s, and what have been its consequences?
8. 8. Why is labour exploitation such an endemic feature of the
global political economy?
9. 9. What is the relationship between migration and
globalization?
10. 10. Are we witnessing the death throes of neoliberal
globalization?
Test your knowledge and understanding further by trying this
chapter’s Multiple Choice Questions
Further Reading
Abdelal, R., Blyth, M., and Parsons, C. (eds) (2010), Constructing the
International Economy (Ithaca, NY: Cornell University Press). A fine
collection of essays informed by constructivist approaches to IPE.
Cohen, B. J. (2008), International Political Economy: An Intellectual
History (Princeton, NJ: Princeton University Press). A fresh look at
the field of IPE, and a call for greater dialogue between its major
approaches.
Cox, R. W. (1987), Production, Power, and World Order: Social
Forces in the Making of History (New York: Columbia University
Press). One of the founding texts of the contemporary field of IPE,
epitomizing the critical IPE approach.