Lecture 1a - Introduction to GPE

Global political economy

Lecture 1a - Introduction to GPE

Nikos Terzidis

University of Groningen

April 9, 2025

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Lecture 1a - Introduction to GPE

iStock, credit to Elena Iakovleva

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Lecture 1a - Introduction to GPE

Today’s agenda

1 Locating the field

2 Distinction between Global Political Economy (GPE) and International

Political Economy (IPE)

3 Global Political Economy methods

4 Trends in contemporary GPE theory

5 Practice quiz

6 Next lecture

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Lecture 1a - Introduction to GPE
Locating the field

Section

1 Locating the field

2 Distinction between Global Political Economy (GPE) and International

Political Economy (IPE)

3 Global Political Economy methods

4 Trends in contemporary GPE theory

5 Practice quiz

6 Next lecture

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Lecture 1a - Introduction to GPE
Locating the field

This photo by Unknown Author is licensed under CC BY-SA

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Lecture 1a - Introduction to GPE
Locating the field

What is International Political Economy (IPE)?

∆ Definition (1): ”International Political Economy refers to the academic

field of study that examines the interaction of economic and political phenomena
across state borders.” (O’Brien & Williams 2025, p. 24)

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Lecture 1a - Introduction to GPE
Locating the field

What is International Political Economy (IPE)?

∆ Definition (1): ”International Political Economy refers to the academic

field of study that examines the interaction of economic and political phenomena
across state borders.” (O’Brien & Williams 2025, p. 24)
∆ What kind of phenomena?
Environmental concerns / climate change
Gender and other issues of inequality
Globalization and migration
International finance, trade and development

...other current, real-world phenomena, such as the covid pandemic, the rise of
populism, the refugee crisis etc.

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Lecture 1a - Introduction to GPE
Locating the field

What is International Political Economy (IPE)?

∆ Definition (2): ”International Political Economy is an interdisciplinary

social science field of study that investigates, analyzes, and proposes changes in the
processes of economic flows and political governance that cross over and/or
transcend national boundaries.” (Miller, 2018, Chapter 1)

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Lecture 1a - Introduction to GPE
Locating the field

What is International Political Economy (IPE)?

∆ Definition (2): ”International Political Economy is an interdisciplinary

social science field of study that investigates, analyzes, and proposes changes in the
processes of economic flows and political governance that cross over and/or
transcend national boundaries.” (Miller, 2018, Chapter 1)
∆ Economic flows: trade, capital, labor (migration), technology, ideas, natural
resources, environmental pollution, etc.

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Lecture 1a - Introduction to GPE
Locating the field

What is International Political Economy (IPE)?

∆ Definition (2): ”International Political Economy is an interdisciplinary

social science field of study that investigates, analyzes, and proposes changes in the
processes of economic flows and political governance that cross over and/or
transcend national boundaries.” (Miller, 2018, Chapter 1)
∆ Economic flows: trade, capital, labor (migration), technology, ideas, natural
resources, environmental pollution, etc.
∆ Therefore, IPE deals with competing explanations of events, issues and
processes
∆ How? By using conflicting explanatory frameworks, such as liberalism,
economic nationalism or Marxism (discussed in the next lecture!)

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Lecture 1a - Introduction to GPE
Locating the field

Let’s summarize

∆ What is IPE? An inter-disciplinary academic field, drawing upon economics,

political science, political economy, international relations, sociology, law, history,
cultural studies etc.

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Lecture 1a - Introduction to GPE
Locating the field

Let’s summarize

∆ What is IPE? An inter-disciplinary academic field, drawing upon economics,

political science, political economy, international relations, sociology, law, history,
cultural studies etc.
∆ What does it study? The interplay between national and international issues.

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Lecture 1a - Introduction to GPE
Locating the field

Let’s summarize

∆ What is IPE? An inter-disciplinary academic field, drawing upon economics,

political science, political economy, international relations, sociology, law, history,
cultural studies etc.
∆ What does it study? The interplay between national and international issues.

∆ How and why? Uses competing theoretical perspectives (liberalism,

nationalism, Marxism) to offer different explanations for the same phenomenon
(different perspective!)

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Lecture 1a - Introduction to GPE
Distinction between Global Political Economy (GPE) and International Political Economy (IPE)

Section

1 Locating the field

2 Distinction between Global Political Economy (GPE) and International

Political Economy (IPE)

3 Global Political Economy methods

4 Trends in contemporary GPE theory

5 Practice quiz

6 Next lecture

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Lecture 1a - Introduction to GPE
Distinction between Global Political Economy (GPE) and International Political Economy (IPE)

Global vs International political economy

Global political economy:

XThe economic and political
environment since the mid-1970s
XDescribes how various actors (i.e.
citizens, states or corporations)
struggle to order their environment
in an increasingly globalizing world

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Lecture 1a - Introduction to GPE
Distinction between Global Political Economy (GPE) and International Political Economy (IPE)

Global vs International political economy

International political economy:

Global political economy:
XHistory of the economic and
XThe economic and political
political activity across states up
environment since the mid-1970s
until the mid-1970s
XDescribes how various actors (i.e.
XThe academic field of study
citizens, states or corporations)
related to the interactions of
struggle to order their environment
economic and political phenomena
in an increasingly globalizing world
across state borders

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Lecture 1a - Introduction to GPE
Distinction between Global Political Economy (GPE) and International Political Economy (IPE)

IPE and other related disciplines

Economics: choice under scarcity, comparative

advantage, supply and demand, the operation of
markets
Politics: states and the use of power, the machinery
of government
International relations: causes of war, foreign policy
of states, international organizations

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Lecture 1a - Introduction to GPE
Distinction between Global Political Economy (GPE) and International Political Economy (IPE)

Neo-classical economics

Central problem: The efficient allocation of scarce resources to satisfy

unlimited human desires
Solution? The efficient operation of free markets, which allow for mutually
advantageous exchanges, between rational, informed, free, equal and
utility-maximizing individuals
The sum of individual choices will result in the most efficient allocation of
resources
Governments are inefficient: they should only provide some public goods (i.e.
defense) and institutions
Politics and politicians block the efficient operation of free markets

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Lecture 1a - Introduction to GPE
Distinction between Global Political Economy (GPE) and International Political Economy (IPE)

Other approaches to economics

Keynesian economics:
XGovernment is crucial to a
well-functioning economy
XGreater scope for providing public
goods (i.e. healthcare, education,
etc.)
XGovernment spending can
stimulate economic growth

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Lecture 1a - Introduction to GPE
Distinction between Global Political Economy (GPE) and International Political Economy (IPE)

Other approaches to economics

Institutional economics:
Keynesian economics:
XDeparts from economic models
XGovernment is crucial to a
and sees markets as the outcome of
well-functioning economy
institutions (i.e. legal structure,
XGreater scope for providing public financial system)
goods (i.e. healthcare, education,
XHighlights the role of formal (i.e.
etc.)
laws, legal structures) and informal
XGovernment spending can institutions (i.e. social norms,
stimulate economic growth habits)

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Lecture 1a - Introduction to GPE
Distinction between Global Political Economy (GPE) and International Political Economy (IPE)

Other approaches to economics

Institutional economics:
Keynesian economics:
XDeparts from economic models
XGovernment is crucial to a
and sees markets as the outcome of
well-functioning economy
institutions (i.e. legal structure,
XGreater scope for providing public financial system)
goods (i.e. healthcare, education,
XHighlights the role of formal (i.e.
etc.)
laws, legal structures) and informal
XGovernment spending can institutions (i.e. social norms,
stimulate economic growth habits)
∆ Both Keynesian and institutional economics have a much more expansive and
positive role for the government compared to the neo-classical economics

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Lecture 1a - Introduction to GPE
Distinction between Global Political Economy (GPE) and International Political Economy (IPE)

Other related disciplines

Political science:
Key concepts:
XThe use of power and politics
XThe ability of actors to enforce their
interests
XOperation of the state
XThe welfare of particular communities
XDecision-making is based on argument,
ideology, institutional features and the
threat of violence

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Lecture 1a - Introduction to GPE
Distinction between Global Political Economy (GPE) and International Political Economy (IPE)

Other related disciplines

International relations:
Political science:
Key concept:
Key concepts:
XUnderstand the causes of war and the
XThe use of power and politics interactions between the states
XThe ability of actors to enforce their
interests Dominant approaches:
XOperation of the state XRealism: Lack of any overreaching power
XThe welfare of particular communities (anarchy). States continuously compete for
power
XDecision-making is based on argument,
ideology, institutional features and the XLiberalism: Possibilities for cooperation
threat of violence among states (regional integration, free
trade, democracy promotes peace)
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Lecture 1a - Introduction to GPE
Global Political Economy methods

Section

1 Locating the field

2 Distinction between Global Political Economy (GPE) and International

Political Economy (IPE)

3 Global Political Economy methods

4 Trends in contemporary GPE theory

5 Practice quiz

6 Next lecture

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Overview of the GPE methodologies

∆ How will events be studied?

Case studies and large n studies

Rational choice and game theory
Institutionalism
Constructivism

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Case studies and large n studies

Case studies (small n):

XA detailed investigation of a particular event or issue
XReveal the motivating factors
XApply insights to similar situations
XStarting point for theory building
Licensed under CC BY-SA
XDisadvantage: Less generalizable to other contexts!

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Case studies and large n studies

Case studies (small n):

XA detailed investigation of a particular event or issue
XReveal the motivating factors
XApply insights to similar situations
XStarting point for theory building
Licensed under CC BY-SA
XDisadvantage: Less generalizable to other contexts!

∆ Can take many forms (descriptive, ’least likely’, ’most likely’ or comparative)

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Case studies and large n studies

Large n studies - statistical analyses:

XStatistical examination of large datasets
XFind common characteristics or causes
XExample: How to investigate the relationship
between free trade and economic development?
Retrieved from: https://study.com/academy/lesson/ty

statistical-analysis.html

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Rational choice
∆ Explains outcomes as the result of actors’ choices (individuals, groups or states)
Main assumptions:
Actors are utility-maximizers (minimize losses, maximize gains)
Actors calculate the costs and benefits before choosing an action

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Rational choice
∆ Explains outcomes as the result of actors’ choices (individuals, groups or states)
Main assumptions:
Actors are utility-maximizers (minimize losses, maximize gains)
Actors calculate the costs and benefits before choosing an action
∆ Rational choice highlights the problem of collective action
Under-provision of public goods (clean water / air)
Why individually clean if all enjoy the benefit?
Overuse of common pool resources (oceans)
Why not over-use a common resource?

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Rational choice
∆ Explains outcomes as the result of actors’ choices (individuals, groups or states)
Main assumptions:
Actors are utility-maximizers (minimize losses, maximize gains)
Actors calculate the costs and benefits before choosing an action
∆ Rational choice highlights the problem of collective action
Under-provision of public goods (clean water / air)
Why individually clean if all enjoy the benefit?
Overuse of common pool resources (oceans)
Why not over-use a common resource?
∆ Explains why what is rational for one individual, might be sub-optimal for the
society (trade protectionism)
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Lecture 1a - Introduction to GPE
Global Political Economy methods

Game theory - prisoner’s dilemma

X Game theory examines the decision-making of actors who are influenced by

what the other party is doing

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Game theory - prisoner’s dilemma

X Game theory examines the decision-making of actors who are influenced by

what the other party is doing
X Example: Prisoner’s dilemma (non-cooperation leads to poor outcomes):
All countries are better off with free trade (no protectionist measures)
If any individual country keeps trade barriers, while others open up, that
country benefits a lot
Country A is concerned that if it opens up to free trade, while other countries
keep their trade barriers, it will lose a lot

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Game theory - prisoner’s dilemma

X Game theory examines the decision-making of actors who are influenced by

what the other party is doing
X Example: Prisoner’s dilemma (non-cooperation leads to poor outcomes):
All countries are better off with free trade (no protectionist measures)
If any individual country keeps trade barriers, while others open up, that
country benefits a lot
Country A is concerned that if it opens up to free trade, while other countries
keep their trade barriers, it will lose a lot
X Why is it so difficult to reach an agreement to remove trade barriers?

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Game theory - prisoner’s dilemma

X ...free riding!

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Game theory - prisoner’s dilemma

X ...free riding!

X ’no tariff’ leads to higher common gains; however, the dominant strategy
(response to individual incentives) is ’impose tariff’!

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Game theory - prisoner’s dilemma

X ...free riding!

X ’no tariff’ leads to higher common gains; however, the dominant strategy
(response to individual incentives) is ’impose tariff’!
X The problem of seeking the benefits of free trade without removing your trade
barriers!
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Lecture 1a - Introduction to GPE
Global Political Economy methods

Game theory - prisoner’s dilemma

∆ Does this mean that free trade is impossible?

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Game theory - prisoner’s dilemma

∆ Does this mean that free trade is impossible?

Absolutely not! The rules of the game can change over time.
1 Repeated interaction (threat for punishment)
2 Players can learn about the costs and benefits of cooperation
3 Institutions like the World Trade Organization (WTO) incentivize countries to
negotiate / cooperate

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Institutionalism
∆ Emphasizes the importance of rules and institutions (formal and informal) in
shaping political outcomes
∆ Example: decide to form the WTO in order to promote free trade (incentivize
cooperation, reduce the ability to free-ride or cheat)

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Institutionalism
∆ Emphasizes the importance of rules and institutions (formal and informal) in
shaping political outcomes
∆ Example: decide to form the WTO in order to promote free trade (incentivize
cooperation, reduce the ability to free-ride or cheat)
∆ Advances the discussion with respect to the varieties of capitalism
XCountry variation might be explained by different forms of political and
socio-economic arrangements (institutions)
Xi.e. Anglo-American market model, German bank-centered model or
Japanese model based on large conglomerates?
Xi.e. Should workers be included in decision-making or not?
Xi.e. Which welfare regime policy is optimal?
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Lecture 1a - Introduction to GPE
Global Political Economy methods

Constructivism
∆ Norms and values go beyond shaping the states’ interests; instead, they are
identities and therefore interests themselves

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Lecture 1a - Introduction to GPE
Global Political Economy methods

Constructivism
∆ Norms and values go beyond shaping the states’ interests; instead, they are
identities and therefore interests themselves
∆ Key points:
XWhat are actors’ beliefs & preferences, how have they been created and
how might they change?
XHow do ideas, norms, identities and social understanding shape human
behaviour?
∆ Examples:
XHow is it that at one point in time, inflation is the key economic issue, and
at others, it is unemployment?
XWhy does the US consider Cuba “communist” but China “economically
advantageous”?
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Lecture 1a - Introduction to GPE
Global Political Economy methods

Let’s summarize

∆ Global political economy methods

Case studies (large and small n)

Rational choice and game theory
Institutionalism
Constructivism

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Lecture 1a - Introduction to GPE
Trends in contemporary GPE theory

Section

1 Locating the field

2 Distinction between Global Political Economy (GPE) and International

Political Economy (IPE)

3 Global Political Economy methods

4 Trends in contemporary GPE theory

5 Practice quiz

6 Next lecture

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Lecture 1a - Introduction to GPE
Trends in contemporary GPE theory

Three main trends in contemporary GPE theory

1 Consolidation
Draws upon a consensus regarding the boundaries of the subject matter, the
theoretical approaches and the problems at hand
XSubject matter: The politics of international economics
XThe key theoretical challenge is to specify the relationship between the
domestic and the international level of analysis
Drawback: Narrow vision, ignoring many crucial topics (how should the
world be transformed, what the good life would look like etc.

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Lecture 1a - Introduction to GPE
Trends in contemporary GPE theory

2 Integration
Combines IPE with other variants of political economy (such as comparative
or classical political economy)
XThe complexity of regionalism (current focus of IPE) highlights the importance
of comparative analysis to analyze regional or domestic structures
XIPE failed to explain the twin issues of relative national wealth and continuing
inequality ∆ classical political economy can improve our understanding on such
(shared) topics

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Lecture 1a - Introduction to GPE
Trends in contemporary GPE theory

2 Integration
Combines IPE with other variants of political economy (such as comparative
or classical political economy)
XThe complexity of regionalism (current focus of IPE) highlights the importance
of comparative analysis to analyze regional or domestic structures
XIPE failed to explain the twin issues of relative national wealth and continuing
inequality ∆ classical political economy can improve our understanding on such
(shared) topics
3 Expansion
Make it geographically ’global’ and develop new issues of inquiry
XExpand IPE to the developing countries and seriously reflect on the theoretical
implications of this expansion

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Lecture 1a - Introduction to GPE
Practice quiz

Section

1 Locating the field

2 Distinction between Global Political Economy (GPE) and International

Political Economy (IPE)

3 Global Political Economy methods

4 Trends in contemporary GPE theory

5 Practice quiz

6 Next lecture

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Lecture 1a - Introduction to GPE
Practice quiz

Licensed under CC BY-SA

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Lecture 1a - Introduction to GPE
Practice quiz

Question 1

The field of international political economy:

Examines
label= the relationship between national and international politics
Examines
lbbel= the relationship between economics and politics
Draws
lcbel= upon disciplines such as history, political science, economics and
sociology
All
ldbel= of the above

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Lecture 1a - Introduction to GPE
Practice quiz

Question 1

The field of international political economy:

Examines
label= the relationship between national and international politics
Examines
lbbel= the relationship between economics and politics
Draws
lcbel= upon disciplines such as history, political science, economics and
sociology
All
ldbel= of the above

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Lecture 1a - Introduction to GPE
Practice quiz

Question 2

As a research method, case studies:

Are
label= useful in generating theories, concepts, typologies and hypotheses
Provide
lbbel= rich empirical material for investigation
Help
lcbel= us understand how particular things happen
Are
ldbel= the only means of investigation when there is no statistical data
All
lebel= of the above

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Lecture 1a - Introduction to GPE
Practice quiz

Question 2

As a research method, case studies:

Are
label= useful in generating theories, concepts, typologies and hypotheses
Provide
lbbel= rich empirical material for investigation
Help
lcbel= us understand how particular things happen
Are
ldbel= the only means of investigation when there is no statistical data
All
lebel= of the above

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Lecture 1a - Introduction to GPE
Practice quiz

Question 3

In rational choice theory, utility maximizers are actors that:

Use
label= a large amount of public services
Attempt
lbbel= to maximize their gains and minimize their losses
Fail
lcbel= to engage in a cost-benefit analysis
All
ldbel= of the above

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Lecture 1a - Introduction to GPE
Practice quiz

Question 3

In rational choice theory, utility maximizers are actors that:

Use
label= a large amount of public services
Attempt
lbbel= to maximize their gains and minimize their losses
Fail
lcbel= to engage in a cost-benefit analysis
All
ldbel= of the above

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Lecture 1a - Introduction to GPE
Practice quiz

Question 4

Applied to IPE, the Prisoner’s Dilemma can help explain why:

So
label= many countries have joined the WTO
Countries
lbbel= keep protectionist measures in place even though free trade would
benefit them more
The
lcbel= IMF is such an important institution
Developing
ldbel= countries are so poor

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Lecture 1a - Introduction to GPE
Practice quiz

Question 4

Applied to IPE, the Prisoner’s Dilemma can help explain why:

So
label= many countries have joined the WTO
Countries
lbbel= keep protectionist measures in place even though free trade would
benefit them more
The
lcbel= IMF is such an important institution
Developing
ldbel= countries are so poor

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Lecture 1a - Introduction to GPE
Practice quiz

Question 5

Constructivists see beliefs and values as:

Something
label= that can be taken for granted
Things
lbbel= that have to be explained
Constituting
lcbel= identities and interests
Answers
ldbel= (b) and (c) are correct

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Lecture 1a - Introduction to GPE
Practice quiz

Question 5

Constructivists see beliefs and values as:

Something
label= that can be taken for granted
Things
lbbel= that have to be explained
Constituting
lcbel= identities and interests
Answers
ldbel= (b) and (c) are correct

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Practice quiz

Question 6

Institutionalists focus on:

Self-interested
label= actors maximizing their utility
How
lbbel= rules shape actors’ behaviour
How
lcbel= people construct their own reality
The
ldbel= WTO, the IMF and the World Bank

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Practice quiz

Question 6

Institutionalists focus on:

Self-interested
label= actors maximizing their utility
How
lbbel= rules shape actors’ behaviour
How
lcbel= people construct their own reality
The
ldbel= WTO, the IMF and the World Bank

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Practice quiz

How did you do?

∆ If you had any difficulty answering those questions, then it is important to
carefully re-read Chapter 2 in O’Brien and Williams

Retrieved from: https://www.iconspng.com/image/141353/pug-looking-at-cookie

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Next lecture

Section

1 Locating the field

2 Distinction between Global Political Economy (GPE) and International

Political Economy (IPE)

3 Global Political Economy methods

4 Trends in contemporary GPE theory

5 Practice quiz

6 Next lecture

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Lecture 1a - Introduction to GPE
Next lecture

Next lecture

In the next lecture, we will focus on:

XTheories of International Political Economy (very important!!!)
XEconomic nationalism
XLiberalism
XCritical perspective
XApplications of theories to real-world examples

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Before you go...

Licensed under CC BY

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Extra resources

∆ The following material is optional, to deepen your understanding. They are not
exam material.
To watch a short video on game theory, click here
To watch a short lecture on constructivism, click here
To watch a video on economic schools of thought, click here
To watch an interview with John Ruggie, click here

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Extra resources

∆ And if you want to be informed about current events, please consider the
following resources.
The Brookings institution
Deutsche Welle
Bruegel
Deutsche Welle documentaries
The Economist
BBC
Project Syndicate
The BBC World News Podcast
Foreign Policy

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Thank you!
Happy to hear your questions.

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