The Political Economy of International Relations:

Political Science 818
International Political Economy
Tuesday, 4:00-6:40 p.m., Bolton 657
Instructor: Shale Horowitz
Office: Bolton 622
Office hours: Tuesday, 3:00-4:00 p.m., 6:40-7:40 p.m.
E-mail: [email protected]
Course Description
We begin with an introduction to basic theory on property rights and the rule of law, which is
used to explain the origins of the fast-growing, modern market economy. We then introduce
basic theory on the economic and politics of international trade and finance. The rest of the
course is divided into two parts. First, what explains the changing forms of international trade
policies, and in particular, the variations between freer trade and greater protectionism? In the
process, we also trace the historical development of the international economy from the late
19th century through the present. Discussion will emphasize the larger, more advanced
economies. Second, what explains economic development policies among middle and lower
income countries since World War II? Why have some regions of the world economy
developed much more slowly than others? What explains the differences and similarities
between the development strategies chosen in Latin America and East Asia? After the fall of
communism, how do development patterns and strategies in the former Soviet Bloc compare
to those in other regions? What factors explain these similarities or differences? How do we
explain the form and timing of the economic liberalizations in the “emerging giants” of China
and India?
Grades
Grades will be based on a midterm (20%), a final exam (20%), a final research paper (50%),
and presentations and participation (10%). The midterm will be given in week eight, on
Tues., Oct. 21. A five-page outline summary of the research paper—focusing on theory and
research design—will be due at the end of week 12, on Fri., Nov. 21, at 12:00 p.m. (in my
mailbox). The research paper is due Tues., Dec. 9, at 12:00 p.m. (in my mailbox). The final
exam will be given Tues., Dec. 16, 4:00-5:30 p.m.
Readings
The following required readings are available in the bookstore:
Bhagwati, Jagdish. (1988) Protectionism. Cambridge, MA: MIT Press. ISBN:
9780262521505. New price: $20.00.
Destler, I.M. (2005) American Trade Politics. 4th ed. Washington, DC: Institute for
International Economics. ISBN: 9780881323825. New price: $27.95.
Graff, Michael, A.G. Kenwood, and A.L. Lougheed. (2013) The Growth of the
InternationalEconomy, 1820-2015: An Introductory Text. 5th ed. London:
Routledge. ISBN: 9780415476102. New price: $64.95.
Haggard, Stephan. (1990) Pathways from the Periphery: The Politics of Growth in the
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Newly Industrializing Countries. Ithaca, NY: Cornell University Press. ISBN:
9780801497506. New price: $26.95.
North, Douglass. (1982) Structure and Change in Economic History. New York:
W.W. Norton. ISBN: 978033952414. New price: $19.06.
Spero, Joan Edelman and Jeffrey A. Hart. (2010) The Politics of International
Economic Relations. 7th ed. New York: Wadsworth Cengage. ISBN:
9780534602741. New price: $166.95.
The Kenwood and Lougheed and Spero and Hart books are classic texts. Earlier editions
available on reserve or from on-line used booksellers are fine. Check the current edition to
make sure you read the right material. Other required readings are available online or on the
course D2l site.
Course Schedule
The following schedule is subject to modification.
Part I: Basic Theory: Economic Development and the International Economy.
Weeks 1-2 (9/2-9/9): Origins of Property Rights and the Rule of Law. Origins of the Western
Market Economy.
Reading: North 1982, entire; Hanson 1999, 18-27, 48-63, 154-63, 204-7; Cipolla
1965, 132-148; Acemoglu, Johnson, and Robinson 2001.
Suggested reading: Díaz 1967 [1568].
Weeks 3-4 (9/16-9/23): Introduction. Models of International Trade. Explanation of Trade
Policy.
Reading: Coughlin, Chrystal and Wood 1995; Bhagwati 1988, 23-37; Alt and Gilligan
1994; Rogowski 1987; Frey 1984, chap. 2; Gourevitch 1977; Hiscox 2001.
Week 4-5 (9/23-9/30): The International Monetary System. Fixed vs. Floating Exchange Rate
Regimes. Methods of Balance of Payments Adjustment. Explanation of Balance of
Payments Adjustment.
Reading: Graff, Kenwood and Lougheed 2014, chaps. 7, 12-13, 18; Spero and Hart
2010, pp. 12-42; Horowitz 2001a; Frieden 1994; Cohen 2002; Bernhard, Broz and
Clark 2002.
Part II: Political Responses to International Economic Disruptions since the Late Nineteenth
Century: The Rise, Decline, and Rise of Globalization.
Weeks 6-7 (10/7-10/14): The Great Depression of the Late Nineteenth Century; World War
and Depression; Oil and Competitive Shocks. Domestic Politics of Globalization.
Reading: Graff, Kenwood and Lougheed 2014, chaps. 4-5, 14, 19; Spero and Hart
2010, 72-127, 338-368; Rogowski 1989, chap. 2; review Gourevitch 1977; Horowitz
2004b; Horowitz 2004a; Milward 1984, 462-77, 491-502; Ruggie 1983; Baldwin
1993; Milner 1987; Strange 1979; Bhagwati 1988, entire.
Suggested reading: Graff, Kenwood and Lougheed 2014, chaps. 1-3, 8-9, 11, 15-17,
20-21; Gerschenkron 1989.
Week 8 (10/21): Midterm Exam. Postwar U.S. Trade Policy.
Reading: Destler 2005, entire.
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Week 9 (10/28): Some Debates on Economic Integration: International Trade Integration;
European Monetary Union.
Reading on trade integration: Spero and Hart 2010, 90-107; Lawrence 1991; Weber
and Zysman 1992, 167-96; review Bhagwati 1988, 71-86, 102-30.
Reading on European monetary union: Spero and Hart 2010, 40-53; Eichengreen and
Frieden 1994; George 1996, chap. 11; De Grauwe 1993; Feldstein 1997; Feldstein
2012.
Part III: Economic Performance and Policy in the Developing World since World War II.
Week 10 (11/4): Introduction to Development Theories. The Latin American Economies.
Reading: Review North, esp. chap. 15, and Acemoglu, Johnson, and Robinson 2001;
Spero and Hart 2010, chap. 5; Cardoso and Helwege 1992.
Week 11 (11/11): Explanation of Latin American Development Policies.
Reading: Frieden 1991, chaps. 4-6; Haggard 1990, chap. 7; Haggard 1991; FloresQuiroga 2001; Cason 2001; Molano 2001.
Week 12 (11/18): The East Asian Economies. Research Paper Outline Due (11/21).
Reading: World Bank 1993, 27-60, 105-47, 191-242, 259-326; review Bhagwati
1988, 87-102.
Week 13 (11/25): Explanation of East Asian Development Policies.
Reading: World Bank 1993, chaps. 2, 4; Haggard 1990, chaps. 2-6; LoGerfo and
Montinola 2001; Heo 2001; Tan 2001.
Weeks 14 and 15 (12/2, 12/9): Research Papers Due (12/9).The Transition from
Communism: The Soviet Bloc and China.
Reading: Spero and Hart 2010, chap. 10; World Bank 1996, chaps. 1-3, 6, 9; Fish
1998; Hellman 1998; Horowitz 2004; Horowitz 2001b; Rutland 2001; Yang 1997,
200-228; Shirk 1993, 333-350; Naughton 2008.
Suggested reading: Nove 1986; Åslund 1995; Balcerowicz 1995, chaps. 9-10, 15-16;
Brandt and Rawski 2008.
Week 15 (12/9): Research Papers Due (12/9). Explaining Market Reform in India.
Reading: Ahmed and Varshney 2008; Panagariya 2008, 95-109; Pedersen 2000.
Suggested reading: Bhagwati 1993, 71-99.
Finals Week (12/16): Final Exam.
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Required and Recommended Readings Available Online, on the Course D2L Site, or in
the Golda Meir Library
Unless otherwise stated, the readings are available on the course D2L site.
Acemoglu, Daron, Simon Johnson, and James A. Robinson. (2001) “The Colonial Origins of
Comparative Development: An Empirical Investigation.” American Economic Review
91, 5 (December), 1369-1401. JSTOR.
Ahmed, Sadiq and Ashutosh Varshney. (2008) Battles Half Won: The Political Economy of
India’s Growth and Economic Policy since Independence. Washington, DC: World
Bank. Available at
http://www.growthcommission.org/storage/cgdev/documents/gcwp015web.pdf
Åslund, Anders. (1995) How Russia Became a Market Economy. Washington, DC:
Brookings Institution. Available in Golda Meir Library. Recommended.
Alt, James E. and Michael Gilligan. (1994) “The Political Economy of Trading States: Factor
Specificity, Collective Action Problems and Domestic Political Institutions,” Journal
of Political Philosophy 2, 2, 165-92.
Balcerowicz, Leszek. (1995) Capitalism, Socialism, Transformation. Budapest: Central
European University Press. Chaps. 9-10, 15-16. Recommended.
Baldwin, Robert. (1993) “The New Protectionism: A Response to Shifts in National
Economic Power.” In Dominick Salvatore, ed., Protection and World Welfare.
Cambridge: Cambridge University Press.
Bernhard, William, J. Lawrence Broz, and William Roberts Clark. (2002), “The Political
Economy of Monetary Institutions.” International Organization 56, 4 (Autumn), 693723. JSTOR.
Bhagwati, Jagdish. (1993) India in Transition: Freeing the Economy. Oxford: Oxford
University Press. Recommended.
Brandt, Loren and Thomas Rawski. (2008) “China’s Great Economic Transformation.” In
Loren Brandt and Thomas Rawski, eds., China’s Great Economic Tranformation, 126. Cambridge: Cambridge University Press. Recommended.
Cardoso, Eliana and Anne Helwege. (1992) Latin America’s Economy: Diversity, Trends, and
Conflicts. Cambridge, MA: MIT Press. E-copy available from UWM library catalog.
Cason, Jeffrey. (2001) “Brazil: Political Institutions and Delayed Reaction to Financial
Crisis.” In Shale Horowitz and Uk Heo, eds., The Political Economy of International
Financial Crisis: Interest Groups, Ideologies, and Institutions, 199-211. Lanham,
MD: Rowman and Littlefield.
Cipolla, Carlo. (1965) Guns, Sails and Empires: Technological Innovation and the Early
Phases of European Expansion, 1400-1700. New York: Minerva.
Cohen, Benjamin J. (2002) “International Finance.” In Walter Carlsnaes, Thomas Risse, and
Beth Simmons, eds., Handbook of International Relations, ch. 22. Thousand Oaks,
CA: Sage.
Coughlin, Cletus C., K. Alec Chystal and Geoffrey E. Wood. (1995) “Protectionist Trade
Policies: A Survey of Theory, Evidence and Rationale.” Federal Reserve Bank of St.
Louis.
De Grauwe, Paul (1993) “The Political Economy of Monetary Union in Europe,” The World
Economy 16, 6, 653-61.
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Díaz, Bernal. (1967 [1568]) The Conquest of New Spain. Nendeln: Kraus Reprint. E-copy
available from UWM library catalog. Recommended.
Eichengreen, Barry and Jeffry A. Frieden. (1994) “The Political Economy of European
Monetary Integration: An Analytical Introduction.” In Barry Eichengreen and Jeffry
Frieden, eds., The Political Economy of European Monetary Integration. Boulder,
CO: Westview.
Feldstein, Martin. (1997) “EMU and International Conflict,” Foreign Affairs 76, 2 (Nov.Dec.), 60-73.
Feldstein, Martin. (2012) “The Failure of the Euro.” Foreign Affairs 91, 1 (Jan.-Feb.), 105116.
Fish, M. Steven. (1998) “The Determinants of Economic Reform in the Post-Communist
World.” East European Politics and Societies 12, 1 (Winter), 31-78.
Flores Quiroga, Aldo. (2001) “Crises and the Domestic Politics of Sustained Liberalization.”
In Shale Horowitz and Uk Heo, eds., The Political Economy of International
Financial Crisis: Interest Groups, Ideologies, and Institutions, 179-198. Lanham,
MD: Rowman and Littlefield.
Frey, Bruno S. (1984) International Political Economics. New York: Basil Blackwell.
Frieden, Jeffry. (1991) Debt, Development, and Democracy: Modern Political Economy and
Latin America, 1965-1985. Princeton, NJ: Princeton University Press.
Frieden, Jeffry. (1994) “Exchange Rate Politics,” Review of International Political Economy
1, 1, 81-98.
George, Stephen. (1996) Politics and Policy in the European Union. 3rd ed. Oxford: Oxford
University Press. Chap. 2.
Gerschenkron, Alexander. (1989) Bread and Democracy in Germany. Ithaca, NY: Cornell
University Press. Available in Golda Meir Library. Recommended.
Gourevitch, Peter Alexis. (1977) “International Trade, Domestic Coalitions, and Liberty:
Comparative Responses to the Crisis of 1873-1896.” Journal of Interdisciplinary
History 8, 2 (Autumn), 281-313.
Haggard, Stephen. (1991) “Inflation and Stabilization.” In Gerald M. Meier, ed., Politics and
Policymaking in Developing Countries, 233-249. San Francisco, CA: ICS.
Hanson, Victor Davis. (1999) The Wars of the Ancient Greeks and Their Invention of Western
Military Culture. London: Cassell.
Hellman, Joel S. (1998) “Winners Take All: The Politics of Partial Reform in Postcommunist
Transitions.” World Politics 50, 2 (January), 203-34. JSTOR.
Heo, Uk. (2001) “South Korea: Democratization, Financial Crisis, and the Decline of the
Developmental State.” In Shale Horowitz and Uk Heo, eds., The Political Economy of
International Financial Crisis: Interest Groups, Ideologies, and Institutions, 151-163.
Lanham, MD: Rowman and Littlefield.
Hiscox, Michael J. (2001) “Class Versus Industry Cleavages: Inter-Industry Factor Mobility
and the Politics of Trade.” International Organization 55, 1 (Winter), 1-46. JSTOR.
Horowitz, Shale. (2001a) “The Persistent Liberalizing Trend in Foreign Economic Policies:
The Role of Dispersed Interest Groups, Policy Legacies, and Ideologies.” In Shale
Horowitz and Uk Heo, eds., The Political Economy of International Financial Crisis:
Interest Groups, Ideologies, and Institutions, 15-39. Lanham, MD: Rowman and
Littlefield.
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Horowitz, Shale. (2001b) “Poland, Hungary and the Czech Republic: National Identity and
Liberalizing Consensus.” In Shale Horowitz and Uk Heo, eds., The Political Economy
of International Financial Crisis: Interest Groups, Ideologies, and Institutions, 225241. Lanham, MD: Rowman and Littlefield.
Horowitz, Shale. (2004a) “Restarting Globalization after World War II: Structure, Coalitions,
and the Cold War.” Comparative Political Studies 37, 2 (March), 127-51.
Horowitz, Shale. (2004b) “Reversing Globalization: Trade Policy Consequences of World
War I.” European Journal of International Relations 10, 1 (March), 33-59.
Horowitz, Shale. (2004c) “Structural Sources of Post-Communist Market Reform: Economic
Structure, Political Culture, and War.” International Studies Quarterly 48, 4
(December), 755-78. JSTOR.
Lawrence, Robert Z. (1991) “Emerging Regional Arrangements: Building Blocks or
Stumbling Blocks?” In Richard O’Brien, ed., Finance and the International Economy:
5, 22-35. Oxford: Oxford University Press.
LoGergo, James and Gabriella Montinola. (2001) “Thailand: Episodic Reform, Regulatory
Incapacity, and Financial Crisis.” In Shale Horowitz and Uk Heo, eds., The Political
Economy of International Financial Crisis: Interest Groups, Ideologies, and
Institutions, 65-89. Lanham, MD: Rowman and Littlefield.
Milner, Helen. (1987) “Resisting the Protectionist Temptation: Industry and the Making of
Trade Policy in France and the United States during the 1970s,” International
Organization 41, 4, 639-665. JSTOR.
Milward, Alan S. (1984) The Reconstruction of Western Europe, 1945-51. Berkeley, CA:
University of California Press.
Molano, Walter. (2001) “Argentia: The Political Economy of Stabilization and Structural
Reform.” In Shale Horowitz and Uk Heo, eds., The Political Economy of
International Financial Crisis: Interest Groups, Ideologies, and Institutions, 213-222.
Lanham, MD: Rowman and Littlefield.
Naughton, Barry. (2008) “A Political Economy of China’s Economic Transition.” In Loren
Brandt and Thomas Rawski, eds., China’s Great Economic Tranformation, 91-135.
Cambridge: Cambridge University Press.
Nove, Alec. (1986) The Soviet Economic System. 3rd ed. Boston: Allen and Unwin. Regular
reserve. Available in Golda Meir Library. Recommended.
Panagariya, Arvind. (2008) India: The Emerging Giant. Oxford: Oxford University Press.
Pedersen, Jørgen Dige. (2000) “Explaining Economic Liberalization in India: State and
Society Perspectives.” World Development 28, 2 (February), 265-282.
Rogowski, Ronald. (1987) “Political Cleavages and Changing Exposure to Trade,” American
Political Science Review 81, 4 (December), 1121-1137. JSTOR.
Rogowski, Ronald. (1989) Commerce and Coalitions: How Trade Affects Domestic Political
Alignments. Princeton, NJ: Princeton University Press.
Ruggie, John Gerard. (1983) “International Regimes, Transactions, and Change: Embedded
Liberalism in the Postwar Economic Order,” in Stephen D. Krasner, International
Regimes, pp. 195-231. Ithaca, NY: Cornell University Press.
Rutland, Peter. (2001b) “Russia: Entrenched Elites Ride Out the Crisis.” In Shale Horowitz
and Uk Heo, eds., The Political Economy of International Financial Crisis: Interest
Groups, Ideologies, and Institutions, 243-263. Lanham, MD: Rowman and Littlefield.
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Shirk, Susan. (1993) The Political Logic of Economic Reform in China. Berkeley, CA:
University of California Press. E-copy available from UWM library catalog.
Strange, Susan. (1979) “The Management of Surplus Capacity: or How Does Theory Stand
Up to Protectionism 1970s Style?” International Organization 33, 3, 303-34. JSTOR.
Tan, Alexander C. (2001) “Taiwan: Sustained State Autonomy and a Step Back from
Liberalization.” In Shale Horowitz and Uk Heo, eds., The Political Economy of
International Financial Crisis: Interest Groups, Ideologies, and Institutions, 165-176.
Lanham, MD: Rowman and Littlefield.
Yang, Benjamin. (1997) Deng: A Political Biography. Armonk, NY: M.E. Sharpe.
Weber, Steve and John Zysman. (1992) “The Risk that Mercantilism Will Define the Next
Security System, in Wayne Sandholtz, ed. The Highest Stakes: The Economic
Foundations of the Next Security System, 167-96. Oxford: Oxford University Press.
World Bank. (1993) The East Asian Miracle: Economic Growth and Public Policy.
New York: Oxford University Press. Available at
http://go.worldbank.org/S78ZS7HF30
World Bank. (1996) From Plan to Market: World Development Report 1996. New York:
Oxford University Press. Available at
https://openknowledge.worldbank.org/handle/10986/5979

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