POLS 154 Introduction to International Political Economy Spring 2010

POLS 154
Introduction to International Political Economy
Spring 2010
Professor Martha Thomas
Class Schedule: Mon, Wed, Fri 12:50 – 1:40pm
Office: Old Mill 539
Office Hours: Mon 2 – 4pm; Wed 2-3pm
Phone: (802) 656-0710
Email: [email protected]
Note: In the Subject heading of each email please write: “POLS 154”
COURSE OBJECTIVES
The world economic system is now highly integrated, as reflected in the increased cross-border
flows of goods and capital and in the sustained activity of institutions like the World Trade
Organization and the North American Free Trade Agreement. In such a world, domestic political
and economic dynamics have global implications, while international events can have farreaching impact domestically. This course is an introduction to the study of international
political economy (IPE), an interdisciplinary field related to international politics and
international economics. IPE examines the interaction between politics and economics at the
international level as well as between the international and domestic levels, involving various
political and economic actors (governments, MNCs, interest groups, as well as individuals). It
focuses on key issues such as economic development, trade policy, foreign direct investment,
monetary and fiscal policy, and international cooperation.
In this course we address questions such as: What factors determine economic development?
How does trade affect political alignments? Does foreign direct investment promote
democratization? What are the political causes and consequences of capital mobility? And, what
political and economic factors influence exchange rate stability?
After covering the major paradigms in the field, we will focus on four key areas of IPE: trade,
development, monetary and fiscal policies, and foreign direct investment. Upon successful
completion of the course, you will be equipped with analytical tools essential for understanding
the complex reality of politics and policymaking, as they relate to international business and
economics.
Students taking this course should have passed POLS 051 or EC 11.
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COURSE READING MATERIAL
There is one text book for this course (available for purchase at the University Bookstore):
*Oatley, Thomas. 2010. International Political Economy: Interests and Institutions in the
Global Economy. (4th Edition). Longman Publishing.
*A number of additional required readings have been assigned for the semester. These readings
are available on blackboard. In the syllabus these readings are identified by the symbol (BB).
* Further readings may be assigned as the semester progresses. These will be e-mailed to you or
handed out in class.
COURSE GRADING
Assignment
Exam I
Exam II
Final Exam
Term Paper
Attendance and Participation
Class exercises
Date
2/14/2011
3/21/2011
5/13/2011
5/4/2011
See policy below
See Schedule for dates
% of grade
20%
15%
20%
20%
10%
15%
Exams:
Exams are essay exams based on lectures and assigned readings. Exam I focuses on Trade
Politics. Exam II focuses on Economic Development. The final exam focuses Multinational
Corporations and Monetary Policy.
Term Paper:
Each student must complete a research paper on a topic chosen from a list of topics to be
provided. More details on the term paper will be handed out soon.
Exercises:
Students would be required to complete three exercises. More details about these assignments
will be discussed in class.
Attendance and Participation Policy:
Students are expected to finish the assigned readings before coming to class, attend and
participate in the lectures, write and turn in written assignments on time, and take exams as
scheduled. I take participation very seriously. The quality of your participation is more
important than quantity. Your active participation will improve the quality of the class for
yourself as well as your classmates. With respect to attendance, students receive one “free”
absence to use as they see fit (without the need for an excuse), but this absence is intended for
illnesses/emergencies and should be saved for such occurrences. One point will be deducted
from your attendance and participation grade for every class you miss beyond the free absence.
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NOTE ON WRITTEN ASSIGNMENTS:
All written assignments are subject to the following rules unless otherwise specified. They must be
typed, doubled spaced, and numbered, with no larger than 12 point font size and 1 inch margin all around.
All written work should be stapled at the upper left corner. The term paper should use title and
subheadings for structure. Any written work that does not conform to the format requirements will be
subject to some stylistic grade reduction.
Students are required to keep the returned copies of all graded exams and papers, and present them if they
wish to discuss the grading of their work.
ACADEMIC HONESTY
Students are, of course, expected to do their own work on all assignments in this class.
University standards regarding academic honesty apply throughout the semester. Please see the
official university policy at http://www.uvm.edu/~uvmppg/ppg/student/acadintegrity.pdf.
CLASSROOM PROTOCOL
The Department of Political Science requires that this classroom protocol, defining minimum
standards of conduct, be included in all syllabi of political science classes.
1. Students are expected to attend and be prepared for ALL regularly scheduled classes.
2. Students are expected to arrive on time and stay in class until the class period ends. If a
student knows in advance that s/he will need to leave early, s/he should notify the
instructor before the class period begins.
3. Students are expected to treat faculty and fellow students with respect. For example,
students must not disrupt class by leaving and reentering during class, must not distract
class by making noise, and must be attentive to comments being made by the instructors
and by peers.
In addition to the above minimum standards, the following policies will apply throughout the
semester:
1. For the term paper and take home class exercises - late papers/assignments will be
docked “1” letter grade for each 24 hour period (or fraction thereof) that the paper is late.
So, a paper that would normally earn a B would be dropped to a C if it is turned in up to
24 hours late, a D if turned in between 24 and 48 hours late, etc. Weekends and holidays
ARE incorporated into this calculation. No variation on the computer/printer/hard drive
catastrophe excuse will be accepted. You should keep adequate backups of all written
work to prevent such a problem.
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2. I will only accept paper copies of written assignments. I will not accept emailed
versions.
3. If you are a member of a sports team or a UVM organization that requires travel out of
town, you must provide me with your schedule as soon as it becomes available. Until I
receive your official schedule, no accommodation will be made concerning your class
attendance or exam dates due to team travel.
4. Students have the right to practice the religion of their choice. Students with religious
observation needs must submit to me in writing their documented religious holiday
schedule for the semester by the end of the second full week of classes.
5. If you have a physical or learning disability, please provide me with the relevant
paperwork from the ACCESS office by the end of the second full week of classes so we
can discuss any relevant accommodations. Discussing these issues early in the semester is
necessary to develop a plan that is workable for you and for me. Also, note that I may not
be able to accommodate last-minute requests. If your accommodation needs change
during the semester, you must inform me of any such changes immediately.
6. All cell phones, iPods, BlackBerries, and other electronic devices must be turned off and
stowed away for the duration of each class session. Any use of these devices in class is
distracting and will not be tolerated. Computers are NOT allowed for use in class. I
reserve the right to reduce the final grade of any student who violates these standards.
Do not eat in class unless you bring food for everyone. You may bring beverages. Do not
talk or chat noisily with your neighbor while I am in lecture mode. If your chatting
disrupts my focus, I will call on you, ask you to share your conversation with the entire
class. Do not sleep in class.
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COURSE SCHEDULE
Week 1 (01/19 – 01/21)
Course Introduction
Traditional Schools of Political Economy
 Oatley. 2010. Chapter 1: International Political Economy.
PART I: POLITICAL ECONOMY OF TRADE
Week 2 (01/24 – 01/28)
The History of Trade
 Oatley. Chapter 2: The World Trading System.
The Rationale for Trade/The Law of Comparative Advantage
 Coughlin, Cletus. 2002. “The Controversy Over Free Trade: The Gap between
Economists and the General Public.” (BB)
Society-Centered Approach to Trade Politics
 Oatley. Chapter 4: A Society-Centered Approach to Trade Politics. (pp71-80).
 Rogowski, Ronald. 1989. “Commerce and Coalitions: How Trade Affects Domestic
Political Alignments.” (BB)
 Maher, Kris and Henry Pulizzi. 31 December 2009. “Chinese Slapped in Steel Dispute
Trade Panel Rules That Subsidized Imports Damaged the U.S. Industry.” Wall Street
Journal. http://online.wsj.com/article/SB126219101972610403.html
Week 3 (01/31 – 02/04)
Society-Centered Approach to Trade Politics
 Oatley. Chapter 4: A Society-Centered Approach to Trade Politics. (pp 80-92).
 Alt and Gilligan. “The Political Economy of Trading States: Factor Specificity,
Collective Action Problems, and Domestic Political Institutions.” pp: 376 -385. (BB)
 Perez, Antonio. August 21, 2010. “U.S. Slaps Tariffs on Chinese-Made Tires.” The
Epoch Times. (BB)
 Hiscox, Michael. 2001. “Class Versus Industry Cleavages: Inter-industry factor mobility
and the Politics of Trade.” International Organization 55(1): 1-46. (BB)
No Class 02/04. I will be attending a workshop at Duke University.
Week 4 (02/07 – 02/11)
EXERCISE I 02/07/11
State-Centered Approach to Trade Politics
 Oatley, Thomas. 2010. Chapter 5: A State-Centered Approach to Trade Politics.
 McGillivray, Fiona. (1997) “Party Discipline as a Determinant of the Endogenous
Formation of Tariffs. American Journal of Political Science 41(April): 584-607. (BB)
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Democracy and Trade
 Milner and Koto. 2005. “Why The Move to Free Trade? Democracy and Trade Policy
in Developing Countries.” International Organization 59: pp107 -119. (BB)
Trade and Conflict
 Li, Quan and David Sacko. 2002. “The (IR) Relevance of Interstate Militarized Disputes
to International Trade.” International Studies Quaterly, 46(1): 11 -44 (BB)
PART II: POLITICAL ECONOMY OF DEVELOPMENT
Week 5 (02/14 - 02/18)
EXAM I
MONDAY
02/14/2011
Historical Reasons for Development I: Institutions
 North, Douglas. 1991. “Institutions and Economic Growth: An Historical Introduction.”
World Development, 17: 1319 – 1332. (BB)
Historical Reasons for Development II: Democracy
 Olson, Mancur. 1993. Dictatorship, Democracy, and Development. American Political
Science Review, 87 (3):567-76. (BB)
 Bardhan, Pradap. “Democracy and Development: A Complex Relationship.”
Unpublished Manuscript University of California Berkeley. (BB)
 Kusherbayev, Almas. 26 December 2010. Development without Democracy? Center
for International Private Enterprise. Retrieve at:
http://yoursdp.org/index.php/perspective/vantage/4465-development-without-democracy
Week 6 (02/21/ - 02/25)
Historical Reasons for Development III: Endowment
 Bloom, David, and Jeffrey Sachs. 1998. “Geography, Demography and Economic
Growth in Africa.” Brookings Papers on Economic Activity 2, 207-273. 207-248. (BB)
Contemporary Reasons for Development: Import vs. Export Industrialization
 Oatley. Chapter 6: Trade and Development I: Import Substitution Industrialization.
 Oatley. Chapter 7: Trade and Development II: Economic Reform (137-149).
 Chao-Wei Lan. March 2002. Singapore‟s Export Promotion Strategy and Economic
Growth: 1965 – 1984 (BB).
Week 7 (02/28 – 03/04)
EXERCISE II 03/04/11
Contemporary Reasons for Development: The IMF and the World Bank
 Oatley. Chapter 7: Trade and Development II: Economic Reform (149-162).
 Stone, Randall. 2004. “The Political Economy of IMF Lending in Africa.” America
Political Science Review 98(4): 577-591.
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The Politics of Foreign Aid
 Alesina, Alberto and David Dollar. 2000. Who Gives Foreign Aid to Whom and Why?
Journal of Economic Growth 5 (1):33-63.
 Windsor, Jennifer. July 19th 2002. “Better Development Through Democracy.” NY
Times. http://www.nytimes.com/2002/07/19/opinion/better-development-throughdemocracy.html
Week 8 (03/7 – 3/11) SPRING RECESS
THE POLITICS OF MULTINATIONAL COPORATIONS
Week 9 (03/14 – 03/18)
Economic Reasons for MNCs
 Oatley. Chapter 8: Multinational Corporations in the Global Economy.
No Class 03/16 – 03/18. I will be attending the International Studies Association
Conference in Montreal.
Week 10 (03/21 - 03/25)
EXAM II
Monday 03/21/2011
MNC-host bargaining
 Oatley. Chapter 9: The Politics of Multinational Corporations.
 Ramamurti, Ravi. 2001. “The Obsolescing „Bargaining Model?‟ MNC-Host Developing

Country Relations Revisited.” Journal of International Business Studies 32 (1): 23-29.
US - Bangladesh Bilateral Investment Treaty. (BB)
Political Determinants of MNCs: Regime Type
 Jensen, Nathan. 2003. “Democratic Governance and Multinational Corporations: The Political
Economy of Foreign Direct Investment” International Organization 57(3):587-616. (BB)
Week 11 (03/28 – 04/01)
Determinants of MNCs: Regime Type and War
 Li, Quan and A. Resnick. 2003. Reversal of Fortunes: Democratic Institutions and
Foreign Direct Investment Inflors to Developing Countries.” International Organization
57(1): 175-211.
 Li, Quan. FDI and Conflict
 Hale, Broiny. 25 June 2002. The Hotspots of African Investment. BBC News World
Edition. Retrieved at: http://news.bbc.co.uk/2/hi/business/2031423.stm
 Documentary Film: The New Rulers of the World
No Class 04/01. I will be attending the MidWest Political Science Conference in Chicago.
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THE POLITICS OF INTERNATIONAL FINANCE AND THE MONETARY SYSTEM
Week 12 (04/04 – 04/08)
Introduction to International Finance: Exchange Rates and Balance of Payments
 Oatley, Thomas. Chapter 10: The International Monetary System
 Broz, Lawrence and Jeffrey Frieden. “The Economy of Exchange Rates.” In “Handbook
of Political Science. (BB)
 David Barboza. 11 August 2005. “China Lifts Lid on Currency Basket.” NY Times.
Retrieve at: http://www.nytimes.com/2005/08/10/business/worldbusiness/10ihtyuan.html
Week 13 (04/11 – 04/15)
EXERCISE III 04/13/2011
Mundell Fleming Conditions and the Global Market
 Oatley Thomas. Chapter 11: Contemporary International Monetary Arrangements
 Frieden, Jeffry. 1991. Invested Interests: The Politics of National Economic Policies in a
World of Global Finance. International Organization 45(4):425-451. (BB)
 Mankiw, Gregory. 10, July 2010. “The Trilemma of International Finance” NY Times.
Retrieve at: http://www.nytimes.com/2010/07/11/business/economy/11view.html
Week 14 (04/18 – 04/22)
Societal Explanations for Monetary Policy
 Oatley. Chapter 12: Society-Based Models of Monetary and Exchange Rate Politics
 Political woes hit Brazil currency. 12 June 2002. BBC: World Edition.
http://news.bbc.co.uk/2/hi/business/2039798.stm
State-Centered Explanation for Monetary and Exchange Rate Policy
 Oatley. Chapter 13: State-Centered Approach to Monetary and Exchange-Rate Policies
 Broz, J. Lawrence. 2002. Political System Transparency and Monetary Commitment
Regimes. International Organization 56 (4):863-889. (BB)
Week 15 (04/25 – 05/29)
Political Institutions and the Exchange Rate
 Bernhard, William, and David Leblang. 1999. “Democratic Institutions and ExchangeRate Commitments.” International Organization 53(1):71-97. (BB)
Global Financial Crises
 Oatley, Chapter 14: The Latin American Debt Crisis
Week 16 (05/02 – 05/04)
TERM PAPER 05/04/11
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Global Financial Crises
 Oatley. Chapter 15: Developing Countries and International Finance II: A Decade of
Crisis.
 New York Times, “Credit Crisis – The Essentials,”
http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_crisis/index.html
(make sure that you read all of it, which means clicking on the “read more” button)
 Jacob Weisberg, “What Caused the Economic Crisis? The 15 Best Explanations for the
Great Recession,” Slate, January 9, 2010, http://www.slate.com/id/2240858
FINAL EXAM Date: 05/13/2011 Location: LAFAYETTE L302 Time: 01:30 - 04:15 PM
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