Chapter 16

Global political economy

nicol a 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 globalization. It begins with an overview of IPE’s theo-

retical contours and how the major approaches in the
International Political Economy (IPE) is a tremen- field have evolved. The chapter then focuses on two
dously rich, exciting, and relevant field of study. It core debates in IPE: what drives globalization; and
builds on varied theoretical foundations and covers who wins and who loses as a consequence. In discuss-
a huge empirical terrain. Its vibrant debates centre ing the first of these debates, it explores how globali-
on questions about power, asking what forms power zation has unfolded and the different ways in which
takes in the global political economy, who or what international political economists have understood
exercises power, and with what political, economic, the driving forces behind these processes. In discuss-
and social consequences. Wherever one looks, the ing the second, it looks in more detail at the conse-
developments in the global political economy which quences of globalization, delving into IPE debates
shape the world we live in and most affect our about inequality, labour exploitation, and global
everyday lives speak directly to the themes and migration. It ends with a reflection on the future of
insights of IPE. globalization, in the context of the rise of national-
This chapter provides an introduction to the field ist politics in some parts of the world, including the
and what it offers in the study of contemporary United States, since the mid-2010s.
 Chapter 16 Global political economy 257

Introduction
IPE takes as its point of departure a very simple prem- The central questions in IPE revolve around the con-
ise: that it is impossible to understand the evolution of cept of power. Some accounts of the field’s remit empha-
world affairs without understanding how the political size the relationship between power and wealth, which
and the economic are intertwined. Perhaps more than opens up a fascinating set of questions about how power
any other field, IPE has staked a major claim to the is exercised and by whom, and with what consequences,
study of ‘globalization’ (see Box 16.1), seeking to under- in the contemporary global political economy. Others
stand the array of processes, trends, actors, and arenas emphasize the relationship between public and private
that the term encompasses. But in many ways, the field forms of power. Susan Strange, in one of the earliest
of IPE also developed as a response to the processes of statements about what the field of IPE should look like,
structural change that were associated with globaliza- framed this influentially as the relationship between
tion, building on well-established theoretical traditions ‘states and markets’ (Strange 1988). Many people,
in International Relations (IR), political science, and rightly, came to view this as too restrictive a definition,
political economy, among other disciplines, in order to as states were not the only actors of significance in the
understand the changing global political economy. global political economy. One modified definition saw
IPE as being about ‘the interrelationship between public
and private power in the allocation of scarce resources’
Box 16.1 IPE or GPE? (Ravenhill 2014: 18)—a useful way of thinking about the
broader scope of IPE which this chapter employs. For our
A tussle has emerged in the field concerning what it should
be called. International Political Economy is the most used purposes, public power can be understood as the author-
label across scholarly communities, and provides a common ity concentrated in state institutions and actors, and by
vocabulary for the field, but it is clearly problematic. Many extension in state-led international organizations. Private
rightly view the ‘I’ to be misleading. The field is not concerned power can be understood as the diverse forms of author-
with relations among states (the ‘inter-national’); rather, all of
ity exercised by non-state institutions and actors, includ-
the processes of structural change are better considered to
be global in scope, involving non-state and private actors as
ing firms and global markets, private regulatory bodies,
well as, or independently of, nation-states. The label Global non-governmental organizations (NGOs) (see Ch. 22),
Political Economy (GPE) has therefore found favour in some and social movements. The distinction between pub-
circles as an alternative, as it is deemed to capture more of the lic and private power is inevitably blurred, and perhaps
field’s thematic and theoretical substance. increasingly so. Many of the functions of public power
Some people go further to argue that both ‘I’ and ‘G’ are
are being assumed more and more by private actors and
essentially unnecessary. All political economy is, by defini-
tion, international or global—one only has to go back to the institutions, with important consequences for distribu-
classical thinkers in political economy, such as Adam Smith or tion and legitimacy in the global political economy.
Karl Marx, to understand that. Attaching ‘I’ or ‘G’ also draws IPE is not driven by a single, or even dominant, the-
inappropriate distinctions between this field and the field of oretical or methodological approach. Some strands of
comparative political economy (CPE), which has been associ-
the field choose to define it as being concerned first and
ated with the field of political science rather than IR. In fact,
we need both comparative perspectives (focusing on national
foremost with the study of institutions, and how insti-
and regional dynamics) and global perspectives in order to tutions shape the possibilities and patterns of coop-
understand the contemporary world. ‘Political economy’, it is eration among states. Particularly in North America,
argued, is therefore enough. However, disciplinary bounda- institutionalist theories have been a major theoretical
ries are powerful things, and CPE and IPE unfortunately often influence on the field. But this is not the full extent of
remain somewhat distinct from one another.
IPE. Many other theoretical frameworks have been
Lastly, the labels also need to be used as descriptive nouns,
rather than as the names of scholarly fields. We have already applied to study its subject matter, stretching across the
referred several times to the global political economy, connot- conventional frameworks of liberalism, realism, and
ing the real-world context defined by the political-economic Marxism, and reaching deeply into newer theoretical
processes and actors that are of interest. To avoid confusion, currents and perspectives such as constructivism, fem-
this chapter adopts the acronym IPE to refer to the field, and
inism, and neo-Gramscian theory.
the noun ‘the global political economy’ to refer to the complex
arena of change which is its focus.
Likewise, IPE’s rich thematic interests are generally
considered to centre on the trio of trade, production,
258 nicola phillips

and finance. But they reach much more widely, touch- same time, significant economic and political turmoil
ing on all of the big issues in today’s global political in some of those economies, such as Brazil, has led to a
economy, including development, inequality, the envi- questioning of the more excited rhetoric about the ‘ris-
ronment, and migration. We are still feeling the after- ing powers’ (see Ch. 5). The escalation of protection-
effects of the global financial crisis, the most significant ist trade policies by the United States since President
economic crisis since the Great Depression of the Donald Trump took office in 2016, bringing with it
1930s, which began in 2008 with the collapse of the US fears of a ‘trade war’ between China and the United
financial firm Lehman Brothers and was accompanied States, is contributing to renewed anxiety about the
by a parallel debt crisis that engulfed southern Europe health and stability of the global economy. Political
around the same time. Europe continues to grapple battles continue over the power of transnational
with the impact of an unprecedented refugee crisis corporations (TNCs), notably in such matters as taxa-
which brings into sharp relief the political-­economic tion and labour conditions in global production.
dynamics of migration and security, at the same The global environment appears to be under relent-
time as the United Kingdom’s proposed exit from the less threat, as the Trump administration consistently
European Union (EU) has raised existential questions undermines multilateral agreements and rejects cli-
about the future of the bloc and its integration project. mate change s­cience, and the President of Brazil elected
China continues its rise to global economic dominance in 2018, Jair Bolsonaro, intends aggressively to roll back
and increasing global political power, alongside a num- protection of the Amazon rainforest. The list of con-
ber of other ‘rising powers’, auguring a reorganization temporary preoccupations for international political
of the global order and the way it is governed. At the economists could go on and on.

Approaches to IPE
Introductions to IPE often refer back to the theoretical efficient mechanism by which resources can be allo-
framing that Robert Gilpin set out in 1987, when the cated. States are not invisible in this tradition, but
field was beginning to crystallize as a major subdisci- their role should be limited to securing the conditions
pline of IR. In his now classic overview of the new field, in which markets can operate as freely as possible,
he identified three main bodies of theory that under- and correcting some of the undesirable consequences
pinned the field: liberalism, Marxism, and nationalism of their workings. A minimal role for the state builds
(sometimes also called realism) (see Chs 6, 7, and 8). on the idea that governments are subject to pressures
These three labels quickly became a standard categori- from powerful interests in society, seeking advantages
zation of approaches, and often still provide the starting or ‘rents’ from government policies, and therefore that
point of undergraduate and postgraduate syllabi in IPE. governments potentially distort the efficient operation
More recently, the field has evolved in more diverse of markets. The emphasis on both states and inter-
directions, embracing a wide range of bodies of theory ests runs through contemporary neoliberal theories
to aid its task of understanding the distributive con- of IPE. Institutionalism, as noted above, is concerned
sequences of the interplay between private and public first and foremost with patterns of cooperation among
power. These ‘newer’ perspectives include social con- states, and how the ‘inter-national’ dynamics of power,
structivism, evolving forms of rational choice theory refracted through the creation of national and interna-
and institutionalism, and varied directions in Marxist tional institutions, shape outcomes in terms of collec-
and critical thought, such as neo-Gramscian theory, tive action among states (Keohane 1984; Milner 1997).
feminist theories, and poststructuralism. Recalling the Rational choice theory, by extension, is concerned with
definition of IPE outlined at the start of the chapter, the strategic decisions made by actors in the global
each of these bodies of theory brings to bear a different political economy; it assumes that actors are ‘rational’
understanding of the nature of power, the relationship in their decision-making processes, possess fixed inter-
between public and private power, and the consequences ests and preferences, and adapt to particular structures
for the distribution of material and power resources. of incentives (Aggarwal and Dupont 2014).
The liberal tradition in IPE builds on ideas about Conversely, nationalist or realist perspectives on IPE
free markets and the view that markets are the most focus closely on ‘inter-national’ relations among states
 Chapter 16 Global political economy 259
and see the global political economy as being shaped inform the decisions which public and private actors
by competition among states to maximize their power take, and more specifically the interests that define
and security (Krasner 1976). Their interest in political their preferences. Whereas Marxist theorists would see
economy centres on economic policy decisions by states these interests as being defined by class or position in
that are assumed to be pursuing the goals of economic the capitalist structure, and rational choice theorists
nationalism and independence. However, they reserve would ascribe them to incentive structures that actors
particular attention for the role of hegemonic power in face, social constructivists are more interested in the
the global political economy, focusing on whether and ideational dimensions of interest formation: how indi-
how one hegemonic state can create and enforce rules vidual perceptions and cultural influences can combine
to maximize the stability of the system, often through to shape patterns of ideas, and, in turn, how particular
the creation of institutions. sets of ideas become dominant in the global political
By comparison, Marxism and its neo-Marxist off- economy, and with what consequences (see Ch. 12).
shoots are concerned with the system—the structure Feminist approaches to IPE bring many of these con-
of the global political economy—which is defined by cerns together (Peterson 2003; Bakker and Silvey 2008).
capitalism. Capitalism is understood to be about com- While theoretical orientations differ among feminist
petition between interests, as in liberal and nationalist scholars, they are united in a focus on how the power
theories, but interests here are understood not through structures, interests, and ideas that underpin the global
the primary prism of states and governments, but rather political economy are fundamentally gendered in their
as relating to class. The dynamics of the global political nature and consequences. Other chapters in this vol-
economy are, in this sense, about the conflict inherent ume highlight many of the questions that animate fem-
in capitalism between those who own the means of pro- inist theories of IPE, including the many dimensions
duction and those who are oppressed as a means of of the ‘gendered division of labour’ (see Chs 9 and 17).
generating ‘surplus value’ or profit in the system. Neo- There are many other theoretical approaches to IPE
Marxist theories associated with the schools of depen- and many other theoretical influences. It is not possible
dency theory and world systems theory, which were to survey them all in detail here, nor even to do full
particularly influential in the 1960s and 1970s, trans- justice to the depth and richness of those mentioned
posed these insights to a global level, arguing that the above. However, this brief overview has highlighted two
global economy was divided into a ‘core’ and a ‘periph- aspects of IPE. First, IPE has come a long way since its
ery’, and that class conflict was international or global in early conception as resting on the trilogy of liberalism,
scale (Frank 1967; Dos Santos 1970; Wallerstein 1979). nationalism/realism, and Marxism. It has become a flag
More recently, Marxist perspectives have been mar- under which many ships have been able to sail, depart-
ried with insights from the Italian philosopher Antonio ing from different theoretical shores and traversing the
Gramsci (R. Cox 1981, 1987); this strand of theoretical expansive thematic waters that characterize the field.
thinking has become particularly influential as a part Second, IPE is a highly diverse field; sometimes
of a broader universe of ‘critical’ IPE. This body of work what divides the field can be more apparent than what
has advanced the core Marxist concern with the power unites it. Even so, IPE’s principal approaches are united
structures that underpin capitalism, but also placed by a common set of theoretical and conceptual pil-
more emphasis than in previous phases on the ‘ideol- lars. While very different, and placing their emphasis
ogy’, or sets of ideas, that themselves form a part of the in dramatically different ways, it can be said that all of
structure of the global political economy. the above theories rest on three ingredients of the study
In this regard, these critical currents in IPE share of political economy—material capabilities, institu-
some terrain with social constructivist approaches tions, and ideas (R. Cox 1981). As the introduction to
(Abdelal, Blyth, and Parsons 2010). The core ques- this volume discussed, each body of theory will paint
tion here concerns how ideas shape outcomes in the these ingredients in different colours, will understand
global political economy. One strand of this research the relationship among them in different ways, and
focuses on questions of ideology, and how dominant will produce different pictures of the outcomes of their
ideologies—such as the free market ideas associated interactions. But they stand as the core ontological
with neoliberalism—themselves structure the world building blocks of approaches to IPE, providing a use-
around us and the principles or ‘logics’ by which it ful starting point for exploring some of the field’s main
functions. Other strands focus more on how ideas issues and themes.
260 nicola phillips

Key Points

• IPE is an extremely rich and diverse field, which builds on

theoretical perspectives drawn from IR, political economy,
• Approaches to IPE are all concerned with the interplay of
material capabilities, institutions, and ideas in the global
and political science, as well as insights from other disciplines. political economy.

• The conventional description of IPE theory as organized

around liberalism, nationalism/realism, and Marxism no longer
• However, they understand the nature of these three
elements in diverse ways, and theorize their relationships
captures the breadth and complexity of approaches to IPE. differently.

What drives globalization?

Globalization is not new. What we refer to as ‘globaliza- so-called Bretton Woods system, named for the location
tion’ in IPE relates to the latest, contemporary phase in a of an international meeting held in 1944, which yielded
long-standing historical process. This phase can be said the creation of the major international economic insti-
to have started in the 1960s and 1970s. It is also often tutions that still characterize the multilateral landscape:
referred to as ‘neoliberal’ globalization, denoting the the International Monetary Fund (IMF); the World
ideological principles on which it rests, and the forms Bank (which was originally called the International
of political-economic organization that it has ushered Bank for Reconstruction and Development); and the
in. However, the globalization of the world economy General Agreement on Tariffs and Trade (GATT), which
began much earlier than this conventionally indicated later became the World Trade Organization (WTO). At
starting point. Many histories of globalization go back the same time, the project to rebuild Europe generated
to the s­ ixteenth century in tracing the advent of a world a process of deepening European integration, with the
economy, for centuries centred on Europe and orga- Treaty of Rome, signed in 1957, laying the foundations
nized around European colonialism, moving through for the European Economic Community (EEC) and
the Industrial Revolution to the late nineteenth-century eventually the European Union (EU).
world order of expanding world trade, imperialism, tech- The result was the achievement of unprecedented
nological advances, and the introduction of the inter- rates of economic growth and advances in living stan-
national Gold Standard as the basis for coordinating dards in the post-1945 period, leading the renowned
international currency arrangements. The early twenti- historian Eric Hobsbawm (1994) to refer to this period
eth century saw the outbreak of the First World War, and as a ‘Golden Age’. However, not all of the countries and
with it the abandonment of the Gold Standard, the pro- regions of the world enjoyed this accelerating growth
liferation of barriers to trade, and the period of world- and developmental progress, and the gap between what
wide recession commonly called the ‘Great Depression’ were called at the time the ‘developed’ world and the
in the 1930s, followed by the Second World War. ‘developing’ worlds widened. At the same time that many
Towards the end of the Second World War, two com- economies in East Asia were achieving rapid growth,
mitments were shaped which laid the foundations for leading to talk of an ‘East Asian miracle’, other regions,
the post-war international economic order (Ravenhill notably Africa, were falling further and further behind.
2014: 13). The first was what John Ruggie (1982) famously Two schools of thought emerged to explain this diver-
termed ‘embedded liberalism’, in which governments gence in development trajectories. The first, moderniza-
reached a compromise between the twin objectives of tion theory, popular in the 1950s and 1960s, mapped
safeguarding their domestic economies and pursuing the out a route to development based on the experiences of
goal of full employment to aid post-war recovery, on the what many referred to as the ‘advanced’ Western world,
one hand, and, on the other, opening up domestic econo- plotting a path for the less developed countries to ‘catch
mies in order to re-establish the footing for international up’, in the parlance of the time, with North America
trade and investment flows. The second commitment and Europe. Following this prescribed path to modern-
was to the construction of an institutional architecture ization would yield developmental success; deviating
capable of sustaining the stability of the world economic from this route would result in developmental failure.
order and achieving renewed prosperity following the Hence the divergence in development trajectories was
period of war in Europe and Asia. The result was the understood as a result of inappropriate strategies and
 Chapter 16 Global political economy 261
the absence in the developing world of the political and economy. The Non-Aligned Movement (NAM) and
cultural characteristics of Western ‘modernity’. the New International Economic Order (NIEO) were
The second, underdevelopment theory, which gained key political movements that emerged over the 1960s
currency in the 1960s, took a different view. Its variants and 1970s, oriented to reducing developing economies’
drew on Marxist perspectives to argue that ‘catching dependence on the international economy as well as
up’ was not possible for all, because, alongside the last- their vulnerability to adverse terms of trade.
ing effects of colonialism, the fundamental truth about However, a series of economic and political develop-
capitalism was that development depended on underde- ments prevented these movements from bringing about
velopment. In other words, the Third World’s continu- conclusive adjustments to the power structures of the
ing underdevelopment was not a product of its failure, world order. Following an explosion of available credit in
but rather a result of structural limitations to the pos- the international economy over the 1960s and 1970s, many
sibilities for it to achieve development. The ‘terms of developing countries, particularly in Latin America, had
trade’ in the international economy—a concept which borrowed extensively in international financial markets
highlights the relative competitiveness of national and accumulated massive amounts of debt. The debt cri-
economies by measuring the relationship between the sis that ensued at the start of the 1980s, triggered by the
price that a country’s exports can command in inter- US government raising interest rates, both caused these
national markets and the price that country pays for debts rapidly to become unpayable and acted as a signifi-
its imports—worked systematically against the Third cant brake on development in the affected countries. At
World and its development prospects. In André Gunder the same time, conservative governments were elected in
Frank’s famous formulations, capitalism generates ‘eco- the United States, the United Kingdom, and elsewhere;
nomic development for the few and underdevelopment they interpreted the experience of stagflation, growing
for the many’, as ‘development and underdevelopment state intervention (especially in Europe), and resurgent
are two sides of the same coin’ (Frank 1967: 8–9). political conflict to signal the exhaustion of the post-war
The 1970s marked the end of the Golden Age. The model associated with the Golden Age.
decision in 1971 by the administration of US President So started the ‘neoliberal counter-revolution’ (Toye
Richard Nixon to allow the dollar to float freely is com- 1993). Strongly associated with the traditions of Western
monly viewed as the starting point of the contempo- liberal thought, the neoliberal counter-revolution was
rary globalization of financial markets. The oil crisis based on the assumption that ‘human well-being can
of 1973 ushered in a period of ‘stagflation’—economic best be advanced by liberating individual entrepreneur-
stagnation combined with high inflation—prompting ial freedoms and skills within an institutional framework
a period of crisis across the advanced industrialized characterized by strong private property rights, free mar-
world. To make matters worse, a turn by countries such kets and free trade’ (Harvey 2005: 2). This assumption
as the United States to greater trade protectionism—the quickly gained the status of orthodoxy—neatly summed
erection of barriers to restrain free trade—undermined up in the phrase ascribed to UK Prime Minister Margaret
the post-war commitment to economic openness. Thatcher, ‘there is no alternative’—and formed the basis
Meanwhile, the evolution of the Bretton Woods for the development of a distinctive policy agenda to
institutions had sowed seeds of discontent among devel- achieve an extensive programme of trade liberalization,
oping countries. They viewed the IMF, the World Bank, deregulation, and privatization worldwide. This pro-
and the GATT system either as neglectful of developing gramme was broken down into something resembling
countries’ interests, or as being organized in such a way a ‘recipe’ of policy change, which came to be called the
that their interests were systematically marginalized. Washington Consensus (see Box 16.2).
In other words, the governments of developing coun- The Washington Consensus was rolled out aggres-
tries encountered a multilateral system in which they sively across the developing world, with the Bretton
had very limited bargaining power, and which func- Woods institutions becoming the main channels for
tioned to serve the interests of the powerful states and this purpose. Their ‘structural adjustment programmes’
capitalist forces. Together with the possibilities that (SAPs)—programmes imposing major economic policy
high oil prices and control over commodities afforded, reform packages on developing countries—made com-
these concerns led developing countries to turn to each pliance with these Washington Consensus prescriptions
other in an effort to rectify the disadvantageous terms a condition of access to loans and financing from those
on which they were integrated into the international institutions, which developing countries needed urgently
262 nicola phillips

change. Scholars associated with ‘critical’ strands of

Box 16.2 The policy prescriptions of the
IPE have been particularly keen to expose the ideo-
Washington Consensus
logical underpinnings of globalization. Robert Cox, the
• Maintenance of fiscal discipline (budget deficits should not
exceed 2 per cent of gross domestic product (GDP))
foundational voice in articulating a critical approach
to IPE, established the core insight that the ideational
• Reordering of public expenditure priorities (reduction and
elimination of subsidies; prioritization of spending in
and material dimensions of power are ‘always bound
together, mutually reinforcing one another, and not
education, health, and infrastructure) reducible one to the other’ (R. Cox 1983: 168). Material
• Tax reform (broadening of tax base; maintenance of
‘moderate’ marginal tax rates)
power relates to control over material resources, includ-
ing raw materials, capital, and markets, and was tradi-
• Maintenance of positive real interest rates (to discourage
capital flight and increase savings)
tionally more commonly the focus across the field of
IPE. Yet ideational power is arguably even more impor-
• Maintenance of ‘competitive’ exchange rates tant: that is, the particular ways of thinking about the
• Trade liberalization global political economy that neoliberalism has come to
• Elimination of barriers to foreign direct investment impose on a wide variety of public and private actors.
• Privatization of state-owned enterprises Just as neoliberalism is ‘constructed’ as an ideological
• Deregulation of the economy project (Peck 2010), so too is globalization ‘constructed’
• Enforcement of property rights by sets of ideas and associated discourses that have come
Williamson 1990 to represent a ‘common sense’ of the contemporary era.
A second set of interpretations focuses on the pow-
erful interests and institutions that drive globalization.
to achieve growth and development following the debt According to this perspective, the processes of change
crisis. Colin Leys put it well when he observed that, by the that make up globalization are driven by the changing
end of the 1980s, ‘the only development policy that was political landscape in which, above all, powerful cor-
officially approved was not having one—leaving it to the porate interests have risen to dominance. These include
market to allocate resources, not the state’ (Leys 1996: 42). both financial corporations (banks and other financial
Yet neoliberalism was not just about domestic policy firms) and non-financial corporations associated with
change. It pushed forward a vision of the global politi- global production. The power of these private actors
cal economy as resting on deregulated and globalized is not a new phenomenon—think, for instance, of the
financial markets, free trade, and globalized production power of the East India Company or its counterpart,
structures in which TNCs were free to roam the world the Dutch East India Company, in the early seventeenth
and organize their production activities wherever they century. But it is nevertheless the case that the rapid rise
found the most conducive conditions. The globalization of the multinational corporation, more commonly now
of trade, finance, and production are discussed in finer- called the TNC, was the key phenomenon of the post-
grained detail elsewhere in this volume (see Ch. 27). The war world economy. TNCs are now considered to be
extent to which any of these facets of globalization have among the most powerful actors in the global political
been achieved fully remains open to debate: is global trade economy, increasingly able to dictate the terms of pro-
really ‘free’, for example, or indeed ‘global’? The question duction and trade, and the key driving forces behind glo-
of whether the process of ‘globalization’ has stalled in the balization. However, this does not mean that states are
first two decades of the twenty-first century will also pre- now irrelevant in driving or governing globalization (see
occupy us for some years to come, and we will reflect on Opposing Opinions 16.1). As much as TNCs wield enor-
this towards the end of the chapter. Nevertheless, the far- mous political power and we can find ample evidence of
reaching and on-going consequences of neoliberal global- their using this power to ensure that governments act in
ization cannot be doubted, and debates rage in IPE about accordance with their preferences, states and interna-
their implications for the distribution of power and wealth. tional institutions have also been—and remain—pivotal
Before considering these debates, however, let us first look to creating the conditions in which TNCs can operate.
through IPE lenses at the question of what has driven these A third perspective on the drivers of global political-
processes of global political-economic change. economic change underscores the role of technological
One set of interpretations highlights the role of revolution in creating the conditions for globalization.
ideas and ideology in driving global political-economic Firms and economic actors are able to operate globally
 Chapter 16 Global political economy 263

Opposing Opinions 16.1 National states are irrelevant in an era of economic globalization

For Against
National states are ill-equipped to govern globalization. Nation-states remain an essential part of global govern-
The processes associated with globalization are, by definition, ance. Many of the major international organizations are inter-
global. They are beyond the capacities of national states to gov- governmental in character. Nation-states remain the point of
ern. Authority in the global political economy has therefore been reference for many civil society organizations. They are also
dispersed to a wide array of private actors, civil society actors, pivotal in putting in place the governance conditions in which
and international organizations that are more able to govern globalization can thrive, and in providing mechanisms of demo-
‘transnationally’. cratic accountability for its consequences.

Markets and global capital have undermined states’ Powerful states have been the ‘authors’ of globalization.
power and authority. Global capital operates beyond the Propelled by the dictates of neoliberalism, states themselves
political control of states. The deregulation of finance and have been responsible for their decreased role in economic gov-
liberalization of trade have eroded the power that states pre- ernance, as they continually act to maintain the conditions for
viously were able to exercise over economic processes and deregulation and liberalization. States are often in conflict with
actors. private actors, but not because they have been ‘eroded’.

TNCs’ political power far exceeds that of many govern- Not all states act the same. Some states are more active in
ments. TNCs are able to wield their political power, especially regulating global economic processes and actors than others. It
across the developing world, to diminish the capacity of states is an excessive generalization to suggest that states have become
and governments to regulate effectively. States wanting to attract passive in the face of corporate power.
investment and trade are bound by the preferences of foreign
Governments retain significant policy discretion. National policy
capital and TNCs.
frameworks vary considerably, and governments retain control over
Global processes have eroded policy space. Governments are a wide array of policy instruments. As the experience of the global
no longer able to control national borders, and policy autonomy financial crisis shows, states are instrumental in managing economic
has been eroded by the need to accommodate global economic crises and dealing with the consequences of economic instability.
and political forces. 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 inevita-
bility 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 www.oup.com/he/baylis8e

as a result of the compression of time and space that of material power. The story of globalization is at least
has been achieved by the evolution of information in part a story of the forms of political and economic
technologies. Territory and distance are no longer activity that technological advances have facilitated,
barriers to international economic exchange, and eco- and the power that control over technology can confer
nomic transactions have become ‘virtual’ in character: on particular actors in the global political economy.
money moves around the world not in physical form, Finally, a fourth interpretation directs attention to
but instantaneously through computers. The logistics the power of states. For much of the time that IPE has
revolution, through advances in such areas as refrig- existed as a field, this power has been centred in the
eration technologies and transportation and distribu- United States. The origins of neoliberal globalization
tion methods, has also enabled the globalization of coincided with the consolidation of US post-war hege-
production and trade in a way that could barely have mony and the period denoted by it, often called the Pax
been envisaged even 50 years ago. Seen through IPE Americana. Indeed, with its origins in the discipline of
lenses, then, control over technology is a key attribute IR, much early IPE scholarship was concerned first and
264 nicola phillips

foremost with questions of US hegemonic power and its and a set of material interests, channelled through the
implications for patterns of cooperation among states power structures of international institutions.
and the institutional apparatus of world politics. Just as However, the vision of globalization as the expres-
important is the connection drawn between the global- sion of state power is slowly but surely changing. It can
ization project and a set of distinctively US economic no longer be assumed unproblematically that the US
interests, in particular the links between the rise of the occupies a position of global dominance: the rise of
TNC and the consolidation of US economic power. For China and other states has disrupted this equation of
some scholars in critical IPE, the debate is more usefully globalization with US hegemony. In one sense, global-
about how the neoliberal globalization project is asso- ization has accelerated as China, India, and the coun-
ciated with an idea of US ‘imperialism’, facilitating the tries of the former Soviet bloc have become increasingly
global dissemination of a distinctive ideological agenda integrated into the global political economy since the

Case Study 16.1 The BRICs and the rise of China

included in the basket of currencies used by the IMF, thus becom-
ing an international reserve currency. China’s increasing economic
power has also been evident in its pursuit of assets and opportuni-
ties 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 coun-
tries, 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 ush-
ered in a period of increasing economic tension between China
Donald Trump and Vice Premier Liu He of the People’s Republic and the US. Trump’s rhetoric has consistently centred on the
of China speak in the Oval Office ‘unfair’ trade advantage enjoyed by the Chinese economy, and
© ZUMA Press, Inc. / Alamy Stock Photo 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
Since the late 1980s, the dramatic growth of the Chinese and Indian China (as well as some other countries) led to retaliatory tariffs
economies, and that of some other emerging economies, has been imposed by China, raising the prospect of a destabilizing ‘trade
one of the most notable features of the global political economy. war’ between the two largest economies in the world.
This group of countries have attracted various labels, of which the The questions for students of IPE are pressing. Is China’s rise
‘rising powers’ and the ‘BRICs’ became the most ­popular—the latter fuelling the emergence of a new global political-economic order,
acronym referring to the principal countries deemed to fall within replacing the order based on neoliberal globalization and US
the group: Brazil, Russia, India, and China (see Case Study 5.1). The hegemony? What are the consequences for global governance
term BRICs was first coined in 2001 by Jim O’Neill, then chief econ- of China’s increasing power and political assertiveness? What
omist at Goldman Sachs, to identify the four economies that had are likely to be the political and economic consequences of sig-
the potential to become the largest and most influential econo- nificant tension, or indeed a trade war, between China and the
mies in the twenty-first century. South Africa is often added to that United States? Are we once again looking at an accelerating trend
list. In reality, all of these economies and countries are very differ- towards protectionism in the global economy? The short answer
ent, and it is considered by many a big stretch to include them all in is that it remains too soon to know, but it is clear both that the
a single category. But this label nevertheless caught on, particularly implications of China’s rise will be significant, and that what hap-
in global financial and policy communities. pens in and around the Chinese economy has wide-ranging
China is of course the key economy in this grouping, becoming repercussions for the global economy.
the world’s largest exporter in 2010, and in 2014 overtaking Japan
for the first time as the world’s second largest economy. Predictions
Question 1: In what ways and to what extent is China now a major
that the Chinese economy will have outstripped the US economy
economic power in the world?
to become indisputably the world’s largest by 2050 run alongside
continued concerns about slowing growth and fears of impending Question 2: Are the ‘rising powers’ overturning the established
recession. Since 2016, the Chinese currency, the yuan, has been global political-economic order?
 Chapter 16 Global political economy 265
start of the 1990s. In a different sense, their rise—par- across some parts of the world, including in the United
ticularly that of China—appears to be upending the States under the administration of Donald Trump, has
established order, especially with regard to economic featured a form of ‘anti-globalism’ which cuts against
power (see Case Study 16.1). At the same time, it can no the pillars of neoliberal globalization, and could rea-
longer be assumed that powerful states are sponsoring sonably be interpreted as an attempt to ‘roll back’ the
globalization. The rise of nationalist populist politics advance of global economic liberalization.

Key Points

• Globalization is not new, but rather is a process that has

proceeded through many phases since the sixteenth century.
about how the global political economy should be
organized.

• The post-war period was characterized by an increase in

international cooperation to restore stability in the
• IPE scholars emphasize a range of drivers behind
contemporary globalization, which include the role of
international economic order, and re-establish economic ideology and ideas, the power of private economic interests,
openness following an extended period of war and crisis. the technological revolution, and the evolution of state power.

• The latest phase of globalization is associated with

neoliberalism, emerging as a response to the economic
• There is increasing debate as to whether globalization is now
stalling or being ‘rolled back’, as nationalist, anti-globalist politics
crisis of the 1970s and the ascendance of neoliberal ideas 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 trends in the large economies, specifically in Mexico
placed emphasis on the interaction between public and and Brazil. Sub-Saharan Africa now accounts for most
private power in shaping how scarce resources are dis- of the world’s poor, with 41 per cent of the region’s pop-
tributed. In other words, IPE provides rich material for ulation living in poverty in 2015. The numbers there
understanding who wins and who loses from global- were also rising in 2018, rather than declining as in the
ization. We will focus our attention here on a number rest of the world. Significantly, while there has been an
of issues that shed interesting light on the dynamics of overall drop in extreme poverty across the world, there
distribution in the global political economy: globaliza- has been much less progress on poverty in general:
tion and inequality; globalization and labour exploita- the number of people living between the $1.25 per day
tion; and globalization and migration. 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 dur-
Globalization and inequality
ing the period of neoliberal globalization, therefore, it
Much debate in IPE has revolved around the relation- is fair to say that we have not seen the improvements
ship between globalization, poverty, and inequality. It that many thought globalization would bring about.
is generally accepted that expectations that neoliberal However, the major trend of our time has been explo-
globalization would lift the world’s population out of sive growth in levels of inequality, which can rightly
poverty have been misplaced. Between 1990 and 2015, be considered to be ‘without historical precedent and
the World Bank estimates that the number of people without conceivable justification—economic, moral or
living in extreme poverty fell to under 10 per cent of the otherwise’ (Pieterse 2002: 1024). Yet, critically, it is not
global population. It estimates a slight further decline primarily a worsening of poverty that has produced
for 2018 to 8.6 per cent, although, significantly, the rate greater levels of inequality; rather, it is the dramatic accel-
of improvement also slowed between 2015 and 2018 eration of wealth accumulation that has caused such a
(World Bank 2018). However, these aggregate figures stretching of the spectrum. During the 1990s, the world’s
hide the uneven nature of this progress. The East Asian rich benefited disproportionately from global growth,
and Pacific regions account for the bulk of the good while the poor’s per capita consumption increased at
news on global poverty, where the dramatic decline in only half the average global rate (Edward 2006). Between
poverty in China has been particularly noteworthy. In 1993 and 2001, somewhere between 50 and 60 per cent
Latin America, the data are heavily skewed by upward of the increase in world consumption accrued to about
266 nicola phillips

10 per cent of the world’s population (Wade 2014: 327). to recognize that global production is built on processes
In early 2018, Oxfam’s annual calculations revealed that which maximize the profits for firms and private actors,
82 per cent of the wealth generated in 2017 went to the and that one of the ways in which this happens relates to
richest 1 per cent of the global population, while the 3.7 the conditions in which people across the world work.
billion people who make up the poorest half of the world Many sectors of global production are marked by
saw no increase in their wealth at all. Oxfam charts an intense competition. TNCs coordinating networks of
annual increase in billionaire wealth by an average of global production put huge commercial pressures on
13 per cent since 2010, which exceeds annual average producers and supplier firms with regard to cost and
wage growth by six times over the same period, and an supply conditions. Producers and suppliers in turn fre-
unprecedented increase in the number of billionaires quently seek to manage these pressures by reducing the
between March 2016 and March 2017 (Oxfam 2018). share constituted by labour in production costs. To do
The question for students of IPE is how to explain these so, they emphasize the maintenance of a highly ‘flexible’
vast divergences in wealth, and the fact that the gaps con- workforce—the ability to hire and fire at will in order to
tinue to widen. Does globalization cause greater levels of respond to changing conditions, to hire workers without
inequality—and if so, does it matter? Views differ dra- any formal contract or on short-term contracts that do
matically. Some contend that inequality is not a problem not involve extensive obligations in relation to rights and
so long as everyone is getting richer: what does it matter if entitlements, to keep wages low, and to make sure work-
we have more billionaires than ever, generating wealth, if ers are easily ‘disposable’. The globalization of produc-
extreme poverty is falling and the possibilities for social tion has advanced as firms have sought the advantages of
mobility are greater than ever? According to this logic, cheap and flexible labour across the world, with little or
globalization is the key to everyone getting richer, as it pro- no regulation by national governments of their activities.
vides opportunities and removes barriers to development. A direct consequence is the explosion of precari-
Others hold that the dynamics of globalization itself ous, insecure, unprotected, and exploitative condi-
are responsible for growing inequality. While globaliza- tions of work, which have become the hallmark of the
tion has created opportunities for the massive accumu- global political economy. Informal, migrant, and con-
lation of wealth by global elites, it has also left untouched tract workers have become the backbone of the global
the structural features of the global economy that work labour force. This labour force has also become strongly
against development for large parts of the world and ‘feminized’, and women workers are among the most
their population. In addition, the skewed distribution vulnerable to exploitation in many arenas of the global
of power in the global political economy ensures that economy. The concept of ‘sweatshops’ has been familiar
inequalities remain entrenched. And yes, this argument for several decades, and there have been many instances
holds, inequality does matter: if we look across the world in which large corporations have been exposed for sweat-
in the mid-2010s, for instance, one of the dominant shop conditions in factories and other appalling abuses
themes in national politics is the backlash from those of workers’ rights. Nike, Gap, Amazon, and Apple are all
who are on the sharp end of globalization, those who are examples of the large numbers of brand firms that have
on the losing side of inequality, and those who feel ‘left suffered damaging exposures of working conditions
out’ of the benefits that globalization was supposed to in their supply chains, some of which have responded
bring. This has been a powerful explanation for political by trying to position themselves at the forefront of the
events, including the election of nationalist and populist corporate social responsibility (CSR) agenda. Across the
leaders in many countries, the outcome of the UK refer- world we encounter the problems of zero-hours con-
endum on ‘Brexit’ in 2016, and instances of civil unrest tracts, poor and exploitative conditions of work, and
such as the rioting in Paris at the end of 2018. 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 labour exploitation
The second theme of this section, labour exploitation in
Globalization and migration
the global economy, is also associated strongly with the
dynamics of inequality. Recall that Marxist theory teaches The final theme in this section, migration, provides
that labour exploitation is an intrinsic feature of capital- a fascinating insight into the dynamics of inequal-
ism, as the outcome of the class conflict between capital ity in the global political economy. We live in an ‘Age
and labour. But one does not have to be a Marxist theorist of Migration’ (Castles and Miller 2009), in which the
 Chapter 16 Global political economy 267

Case Study 16.2 Slavery and forced labour in global production

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, encom-
passing 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 ingredi-
ents are produced using forced labour, and will conduct our work-
ing and personal lives using computers, mobile phones, and other
electronic devices produced by people working in these conditions.
© Sk Hasan Ali / Shutterstock.com
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 recruit-
The International Labour Organization (ILO) estimated in 2017 ers, meaning that they are unable to leave, and these debts are
that there were 24.9 million people working in conditions of manipulated so as to become unpayable. Wages are withheld
forced labour across the world. Of these, about 16 million were until the end of a period of time, and then are not paid or paid
in the private economy, 4.8 million in forced sexual exploitation, at pittance levels. Workers are prevented from freely leaving jobs
and 4.1 million in forced labour imposed by state authorities. The through imprisonment and coercive restrictions on their physi-
ILO also estimated that 152 million children were in child labour cal movement, threatened or actual violence (against them and
across the world (ILO 2017). family members or co-workers), and/or the confiscation of docu-
The problems of forced labour are encountered in all parts ments and possessions. Severely exploitative conditions are invar-
of the world, including in those countries we tend to think iably associated with harsh, degrading, and dangerous conditions
of as ‘rich’. In Brazil, government data indicated that 21,000 of work, violations of workers’ labour rights and often human
workers were released from conditions defined as ‘slave rights, and diverse forms of coercion and manipulation designed
labour’ between 2003 and 2010, as a result of a major effort to make people work harder, for longer, and for less money in
to address the problem of slavery in that country. These work- intensely competitive and cost-driven commercial environments.
ers were mainly in the agricultural economy, in sectors such
as sugar cane, cattle ranching, charcoal, and coffee. The 2018
Question 1: What forms does forced labour take in global
Global Slavery Index (GSI) estimated that there may still be as
production?
many as 369,000 people working in conditions of slavery in
Brazil. To give a handful of further examples, the estimated Question 2: Is it surprising that forced labour remains so common
figure is 136,000 in the UK, 610,000 in Thailand, 1,045,000 in in the contemporary global economy?

number of international migrants reached 258 million processes wrapped up under the heading ‘globaliza-
in 2017, up from 220 million in 2010 (UN 2017a). Of tion’, without understanding migration.
course, migration is not new: it has underpinned the The many different faces of migration reflect the
history of humanity. But what is new about the con- contours of global inequality discussed above. In the
temporary period is that migration flows are now truly context of neoliberalism, the outcomes for different
‘global’—no longer centred on Europe or on a ‘south– kinds of migrants are very different. At one end of the
north’ movement from poorer to richer countries, but spectrum, highly mobile, highly paid, highly educated
now in large proportion also ‘south–south’. Much of professionals use their global mobility as a means of
this south–south movement involves migration within generating opportunities for themselves. Their mobility
regions, such as Southeast Asia, southern Africa, oils the wheels of global economic activity in sectors as
or South America. The key phenomenon in China, diverse as commerce, finance, education, and medicine.
Brazil, and elsewhere is also that of massive inter- At the other end of the spectrum is the kind of global
nal movements of people within countries, which are labour force described in the previous section, where
not captured in these estimated figures on inter-state migrants are disproportionately represented in the low-
migration. Migration shapes the political economy of paid, low-skill parts of global production, or in sectors
all regions of the world. It is impossible to understand supplying services to the more privileged, professional
the contemporary global political economy, and the parts of society, including ‘lifestyle’ services such as
268 nicola phillips

domestic work. Such patterns of migration connected have fuelled a situation in which many migrant work-
with domestic service are global, and include as exam- ers have found themselves at the sharp end of global-
ples the movement of workers from the Philippines to ization. An alternative viewpoint would argue that
Hong Kong, Mexico to the United States, Nicaragua to increased possibilities for mobility under global-
Costa Rica, or Indonesia to the United Arab Emirates, ization have presented opportunities for people to
as well as movement within countries. migrate to earn better wages, achieve better levels of
The realities of precarious employment are magni- education, and enhance their social mobility. Clearly,
fied by the particular vulnerabilities of migrant work- much depends on how migration is governed in the
ers. Migrant workers often lack the power to engage in global political economy, particularly in relation
political action concerning wages and working condi- to working conditions for migrant workers and the
tions, and they do not possess the rights and entitle- kinds of government policies that govern immigra-
ments associated with citizenship or residency. Laws tion or the movement of people.
governing immigration or internal movements often Conversely, an IPE lens reveals that migration is
act to strip workers of labour or welfare protections, itself a driver of globalization. This is not just in an eco-
and constrain their ability to seek satisfactory work- nomic sense, relating to the construction of a highly
ing conditions by changing employers. These laws can flexible global labour force, or the supply of global talent
also provide mechanisms for employers to manipulate to particular industries. Migration also has important
workers, particularly if they are undocumented, such as implications for the global economy, because increas-
the threat of denunciation to immigration authorities. ing levels of global migration are associated with vast
The global migrant labour force is strongly associated flows of money through global and national financial
with economic need and the requirements of supporting systems. Officially recorded remittances to the devel-
families at home. oping world—the sums of money that migrants send
In one sense, this suggests that migrant workers home to their families—stood at $413 billion in 2016
are among the losers from globalization. The deregu- (UN 2017a). Finally, migration has important cultural
lation of labour markets, the power of private firms, implications. Particularly in the world’s ‘global cities’
the retraction of welfare and social protection under (Sassen 2001), migration has played an important part
neoliberalism, the demand for abundant and cheap in some of the dramatic cultural changes that we asso-
labour in global production, and the massive accu- ciate with globalization, and consequently the emer-
mulation of wealth in some sections of society—all gence 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
• Labour exploitation underpins the generation of wealth and
profits in the global political economy.
lively debates centre on who wins and who loses from
globalization.
• Migration has become truly ‘global’ in its scope, associated with
the movement of highly paid professionals at one end of the
• Globalization has been associated with a dramatic widening spectrum, and low-paid, low-skill workers at the other.
of inequality, between and within countries, and between
and within social groups.
• 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 strains of politics have gained ground in countries
in a linear fashion, and the account of globalization that as diverse as the United States, Brazil, Hungary, the
we outlined earlier in this chapter included many twists Philippines, France, and the United Kingdom, among
and turns. At the end of the 2010s, we have arrived at a others. Across the world, left-leaning politics have long
point where we are once again questioning the future of been characterized by a questioning of the value of glo-
globalization, as anti-globalist, nativistic, and populist balization, given all of its uneven social and economic
 Chapter 16 Global political economy 269
consequences as we have outlined in this chapter. Does Alternatively, it may be that the forces of globaliza-
this mean that the process known as ‘globalization’ has tion are now so powerful—centring on the enormous
now run aground? weight of financial and non-financial corporations—
In many ways, this conclusion is probably prema- that the status quo will be maintained despite a pro-
ture. We should be wary of basing sweeping assump- longed period of turbulence. The 2008 financial crisis
tions about the historical significance of change on was widely expected to usher in significant change in
recent turns of events. It remains to be seen whether the way the global political economy is governed, espe-
the system of globalization will hold, so to speak, cially in relation to financial regulation, but this has
and withstand this moment of resurgent nationalism. not proved to be the case. A further scenario is that
Much also depends on what we mean by ‘globalization’. the nationalist impetus could prevail, as the values of
We can legitimately distinguish between globalization internationalism and globalism are overwhelmed once
as a historical process and its current neoliberal incar- again by reactionary populist politics. At the very least,
nation. It might be valid to conclude that neoliberal to avoid this scenario, there will need to be a convinc-
globalization is under significant strain: indeed, we ing response to the crushing inequalities in the global
have been talking about the exhaustion of the neolib- political economy which we have touched on in this
eral model for some time. But this model is not the chapter.
only possibility. As we have seen, while it does not
conform with the neoliberal development model, the
Key Points
rise of China remains premised on a particular vision
of globalization—and indeed is marked by a global-
ist outlook. It may be that rather than witnessing its
• Atwetheareend of the 2010s, we have arrived at a point where
once again questioning the future of globalization,
demise, we are in the process of shifting to the next as anti-globalist, nativistic, and populist strains of politics
have gained ground in diverse countries.
phase in the historical evolution of globalization, one
perhaps shaped more by China and the rising powers • We should be wary of putting too much weight on current
and recent events in predicting the future of globalization.
than by the United States and other Western powers.
Yet we do not know what this alternative model will • Nevertheless, the current neoliberal model of globalization
is clearly under significant strain, and it is not yet clear
look like, nor how politically and economically accept- what the future will hold.
able it would be.

Conclusion
This chapter has introduced the rich resources that conducted in the spirit of open exchanges of perspec-
IPE offers for understanding globalization. It has tive and view, they are hugely valuable in advancing the
emphasized that IPE is a tremendously diverse field, field and enriching the work that goes on within it. But
encompassing a range of theoretical and methodolog- greater dialogue among different schools of IPE is also
ical traditions and an expansive terrain of empirical desirable and important, based on a recognition that
interests. Debates about the nature and consequences starting with the big questions, and bringing a range
of globalization continue to rage in IPE, and this of theoretical perspectives and methods to bear on the
chapter has captured some of them by focusing on task of answering them, can only enhance the breadth
two areas of contestation: what drives globalization, and depth of our understanding. After all, much is at
and who wins and loses from the processes associated stake in understanding how the global political econ-
with it. omy works, and in whose interests.
What will the future of IPE hold? No doubt, the
lively debates—and disputes—among different parts Visit our international relations simulations
of the field will continue to thrive. Diverse theoreti- and complete the ‘Negotiating with China’
cal preferences and different methods of analysis will simulation to help develop your negotiation
continue to vie with one another for greater purchase and problem-solving skills www.oup.com/he/
on the subject matter of IPE. When these debates are baylis8e
270 nicola phillips

Questions

1. What are the key differences among the major theoretical perspectives in IPE, and where, if at
all, do they share common ground?
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. What are the main characteristics of neoliberal globalization?
4. How are the driving forces of globalization understood in IPE, and which explanations do you
find most compelling?
5. Are ideas as important as material resources and institutions in shaping the global political economy?
6. What do we know about the consequences of the rise of China for the global political economy?
7. How can we explain the vast increase in global inequality since the 1980s, and what have been
its consequences?
8. Why is labour exploitation such an endemic feature of the global political economy?
9. What is the relationship between migration and globalization?
10. Are we witnessing the death throes of neoliberal globalization?

Test your knowledge and understanding further by trying this chapter’s Multiple Choice
Questions www.oup.com/he/baylis8e

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.
Palan, R. (ed.) (2012), Global Political Economy: Contemporary Theories (London: Routledge). A survey
of contemporary theoretical approaches in IPE.
Peterson, V. S. (2003), A Critical Rewriting of Global Political Economy: Integrating Reproductive,
Productive, and Virtual Economies (London: Routledge). An engaging discussion of IPE rooted in
critical feminist theory.
Phillips, N. (ed.) (2005), Globalizing International Political Economy (Basingstoke: Palgrave Macmillan).
A critical view of how the theoretical and empirical foundations of IPE are not truly ‘global’ in
scope, but focused on the political economy of advanced capitalism.
Phillips, N., and Weaver, C. E. (eds) (2010), International Political Economy: Debating the Past, Present
and Future (London: Routledge). A collection of short essays representing the lively debate
initiated by Cohen’s 2008 book, International Political Economy.
Ravenhill, J. (ed.) (2019), Global Political Economy, 6th edn (Oxford: Oxford University Press).
A leading textbook on IPE, offering rich perspectives on the field and its thematic concerns.
Strange, S. (1988), States and Markets (London: Pinter). One of the early founding statements of a
new field of IPE, and still one of its most influential contributions.
Watson, M. (2005), Foundations of Political Economy (Basingstoke: Palgrave Macmillan). A rich
intellectual history of IPE.

To find out more, follow the web links www.oup.com/he/baylis8e