1
CHAPTER 1
WHAT IS INTERNATIONAL POLITICAL ECONOMY?
Overview
As in previous editions of this textbook, Chapter 1 introduces students to the study of
International Political Economy (IPE). We discuss how IPE combines and juxtaposes political,
economic, and sociological concepts and ideas to paint a more comprehensive and compelling
explanation of global processes than that offered by any single social science discipline. We
acquaint students with the “levels of analysis” concept, four major frameworks of analysis
(neoliberalism, mercantilism-realism, structuralism, and constructivism), and five “IPE
structures” (production, trade, security, finance, and technology). These tools help students
describe and explain a variety of policy issues. The conclusion provides students a broad
summary of the text’s main points and includes some of the authors’ views on issues covered in
the following chapters.
One of the themes that ties together many chapters is the way in which U.S. president Donald
Trump and other nationalist-populist leaders are tearing apart the post-World War II world order.
The end of the Cold War was followed by robust global economic growth and reduced tensions
between the Great Powers, but since the global financial crisis there has been a rise in anxiety,
Key Terms
•
regime
•
international political economy
•
economic liberalism
•
globalization
•
mercantilism
2
•
realism
•
nation
•
state
•
sovereignty
Teaching Tips
• Key terms are highlighted where they first appear in a chapter, and they are listed at the end of
every chapter and formally defined in the glossary at the end of the book. Most of the
highlighted terms are widely used in IPE, refer to key concepts and processes, or identify
• At the end of Chapter 1 we offer four teaching suggestions. Questions 1 and 3 could be the
basis of a short (1-2 page) essay. After the first class, have students choose an article about an
international issue from a major newspaper and analyze it using a level of analysis, an IPE
analytical perspective, or one of the five IPE structures. Students can hand in their essays for
extra credit or have peers read them. If time allows, have a student read his or her paper to the
• We strongly encourage instructors to assign essay questions to students, even if the class is a
large one of more than 50 students. In classes lasting a quarter there could be two 3-page
essays; if a class lasts a full semester it is easier to assign a 4-5 page paper two or more times.
3
• It is important to provide students with essay guidelines that include criteria the instructor will
use in grading their work. Guidelines should include at least:
o The need for a problem statement or main argument near the beginning of the essay
and a conclusion that matches the thesis statement.
o The need to use both quantitative and qualitative support for arguments.
• We strongly recommend that instructors encourage students to regularly read a newspaper or
news magazine as a way of reinforcing what they learn in class and expanding their
• A good subject for class discussion is the proliferation in Europe of laws restricting the
wearing of certain religious clothing and symbols in public and at the workplace. Ask
students if they think governments should have the right to place restrictions on what people
• Instructors may want to discuss why “fake news” has become such a phenomenon in recent
years. Ask students about different sources of news that they read regularly. Ask them what
they consider to be reliable and unreliable domestic news sources, and why. What foreign
• Consider having each student or groups of students follow a blog or twitter feed of an activist
organization or international institution throughout the semester. Have them record how the
• Consider having each student or groups of students chose a commodity and prepare an
annotated bibliography about it that includes at least 6 reputable sources (books, book
• During the course, point students to specific sets of data from UNCTAD, the World Bank,
the IMF, WIPO, the WTO, or the IEA. Have students use Excel to create several graphs that
4
1. Pick a recent news article dealing with an IPE topic and identify the different levels of
analysis (individual, state/societal, interstate, OR global) that help explain the main issue the
2. Why do Balaam and Dillman think that the international order established after World War II
3. How do detractors of President Trump characterize his personal disposition and personality
4. What evidence is there that democracy and liberal values in Europe, the United States, and
Sample Multiple-Choice Questions
1) Which of the following is mismatched?
a) hard power: military weapons
2) Who is most closely associated with the concept of the levels of analysis?
d) Donald Trump
3) Which of the following is mismatched when it comes to the levels of analysis?
d) The U.S.-North Korea summit in Singapore: the interstate level
4) Which of the following statements related to IPE perspectives is incorrect?
5
5) A scholar studying how climate change, free trade, and changes in technology constrain the
choices of political elites is focusing on which level of analysis?
a) The individual level
6) Which of the following is not a factor that would be considered at the state/societal level of
analysis?
a) The political influence of U.S. banks and farmers
7) Which of the following is not usually regarded as typical of a populist-authoritarian political
leader?
a) Attacks on the press and journalists
8) In which of the following European countries in late 2017 did the largest populist party hold
only a handful of seats in the national parliament?
a) Hungary
9) Which statement about European laws on the wearing of religious clothing in public is
incorrect?
a) Bulgaria has banned the wearing of the full-face veil in public.
10) U.S. president Donald Trump has promoted all of the following policies except
d) pulling the United States out of the Paris Accord on climate change.
6
Suggested Readings and Links
Acharya, Amitav. “After Liberal Hegemony: The Advent of a Multiplex World Order.” Ethics &
International Affairs 31:3 (Fall 2017): 271-285.
Acharya, Amitav. The End of American World Order. 2nd ed. Medford, MA: Polity Press, 2018.
Boulding, Kenneth E. “Is Economics Necessary?” and “The Relations of Economic, Political,
and Social Systems,” in Beyond Economics: Essays on Society, Religion and Ethics. Ann
Arbor: University of Michigan Press, 1970.
Guillén, Mauro F. Rude Awakening: Threats to the Global Liberal Order. Philadelphia, PA:
University of Pennsylvania Press, 2018.
McCoy, Alfred W. In the Shadows of the American Century: The Rise and Decline of US Global
Power. Chicago, IL: Haymarket Books, 2017.
Mounk, Yascha. The People vs. Democracy: Why Our Freedom Is in Danger and How to Save
It. Cambridge, MA: Harvard University Press, 2018.
ni, Ziya. “The Age of Anxiety: The Crisis of Liberal Democracy in a Post-Hegemonic Global
Order.” The International Spectator 52: 3 (2017): 18-35.
Sorensen, Georg. Rethinking the New World Order. New York: Palgrave Macmillan, 2016.
Strange, Susan. States and Markets: An Introduction to International Political Economy. New
York: Basil Blackwell, 1988.
7
Audiovisual Resources
People’s Century. A co-production of the BBC and WGBH Boston, 1990-1999. A 26-part
television series tracing the history of the 20th century. Different episodes, especially those
covering the post-WW II era, can be assigned to help provide students important historical
background.
Planet Money. NPR has an archive of episodes of Planet Money and The Indicator. A rich
source of short podcasts, many of which deal with international economic issues and IPE-
related stories. At https://www.npr.org/sections/money/.