Tag Archive for balance-of-payments

Using Economic and Military Tools in Conflict Prevention

February 15, 2013 Free Content, International Relations, Prevent/Contain Intl. Conflicts No comments

(C) Kapok Tree Diplomacy. 2010. All rights reserved. Jeff Dwiggins. FREE CONTENT

There’s a number of economic tools that may be effective in preventing conflict. Most seem to fall under good governance. The first one that comes to my mind is export diversity. If you depend on one item for 44% of your exports and that one item is a commodity as it is with Sierra Leone’s diamonds, your economy is extremely vulnerable to global price fluctuations in that commodity. A downward dip in prices can have a devastating effect when all your eggs are in one basket. If people have to be laid off or you have to cut their wages, then social dissent can escalate as a result.

The second item that comes to mind is avoiding growth without development. If a nation choose to ignore its infrastructure and social services at the expense of corruption and out-of-control government spending, or spending on things that do not have a long-term impact like million dollar conferences, then that nation will suffer the consequences in decreased foreign direct investment and increased social dissent.

The third economic tool I can think of is well-developed economic and market institutions that are capable of opening up the economy to increased trade.  Peter Sutherland adds that increased trade may “challenge domestic corruption, encourage competition, release entrepreneurialism, ensure affordable services, “provide cover for reformers”, increase foreign investment (examples: Saudi Arabia, Cambodia, China), and increase personal civil rights and freedoms by virtue of access to greater levels of information via the internet, cell phones, etc.” (2008).

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Global Integration as Seen Through the Ideological Lenses of the International Political Economy

February 9, 2013 International Relations, Intl. Political Economy, Paid Content No comments

“Global Integration as Seen Through the Lenses of the Ideologies of the International Political Economy” by Kapok Tree Diplomacy

Preview                                              Written April 2010

Section One – Conceptions of IPE

Main Actors and Their Goals. Dunne and Schmidt state that “Realism identifies the group as the fundamental unit of political analysis” and “the state as the legitimate representative of the people” (93), while other actors such as international organizations (IGOs) or multinational corporations (MNCs) have lesser prominence (103). Realists view the international system as competitive and inherently anarchic, thus driving states to “simultaneously pursue wealth and national power” under the principle of self-help (Gilpin 425). Some realists argue that states are power maximizers, while others argue they are security maximizers (Dunne & Schmidt 101). The end goal in either case is survival, and economic success is central to each strategy.

Liberals position the “individual consumer, firm, or household” as the main actor within IPE. Gilpin asserts that the “primary objective of economic activity (for liberals) is to benefit consumers” by using free market principles for “organizing and managing a market economy in order to achieve maximum efficiency, economic growth and individual welfare” (421). Goal attainment is furthered by these actors peacefully cooperating in a way that allows supply and demand to settle into a natural, stable equilibrium (Gilpin 422). Other groups like IGOs and MNCs compete for centrality with states “through multiple channels of interaction”(Dunne 115).

The main actors within Marxism are social classes, principally the bourgeoisie upper class who owns the economic means of production and the proletariat lower class who works for the bourgeoisie (Lynch 537-539). The goal of the bourgeoisie is wealth accumulation for themselves and increasing power and profits for their class while subjugating the proletariat in the process. Gilpin notes that Lenin reformulated Marxism to the extent that “the principal actors in effect became competing mercantilistic nation-states driven by economic necessity” (430). Whether the main actors be classes or states, the goal is the same in Marxism – maximization of elitist interests.

Policies and Views on International Relations.  Gilpin asserts that the “foremost objective of nationalists is industrialization” as it is the “basis of military power and central to national security” (“Three” 425). Realists, or economic nationalists or mercantilists (as referred to in IPE terminology), also emphasize national self-sufficiency which may result in protectionist measures to insulate infant or declining industries (Gilpin,”Three”, 426).  James Fallows points out how politics drives economics in nationalism by comparing it to liberalism and illustrating the importance of “deliberate development,” production over consumption, results over process, “business as war” over “business as peace,” and national interests over individual interests (61-87). In realism, states seek to maximize their sovereign independence through wealth and power.