International Political Economy Scholars Research Articles

A Chip War Made in Germany? US Techno‐Dependencies, China Chokepoints, and the German Semiconductor Industry

<p>As geo-economic and geopolitical rivalries intensify, the US is weaponizing its power in global semiconductor supply chains to restrict Chinese technological development. To win this chip war against China, the US must compel key foreign firms in Asia and Europe not to supply its adversary with the materials, tools, and know-how needed to make advanced semiconductors. But will these firms agree to follow the US chip embargo and avoid the lucrative Chinese market? This article examines Germany’s “China chokepoint” firms, whose identity and behavior remain critically understudied. Drawing on novel data sets and annual company reports, we show that German firms across three case studies are highly “techno-dependent” on the US. Despite this techno-dependence, German firms have so far sought to circumnavigate US export controls. This constitutes a puzzle because Germany’s semiconductor firms are no more involved in the Chinese market than are firms in Japan and South Korea—which have frequently signaled voluntary compliance or even withdrawn from China in anticipation of harsher US sanctions. To resolve this puzzle, we map out Germany’s semiconductor network and demonstrate that it is tightly articulated with Germany’s auto industry—which is in turn heavily exposed to Chinese markets. We propose that this secondary exposure, through firms’ embeddedness in Germany’s “national production regime,” encourages them to resist the US chip embargo. In this way, we contribute empirical and conceptual insights to international political economy scholarship on firms as geo-economic actors, actively engaged in a protracted and contentious policy process with US authorities.</p>

Territory, Place, Flow, and Scale: Spatial Analysis in the IPE of Trade

ABSTRACT We assess the presence and use of the geographical concepts of territory, place, flow, and scale in the International Political Economy (IPE) literature on trade. While IPE scholars have arguably responded somewhat to earlier calls to embrace geography, the uptake remains limited. Relatively few articles incorporate such concepts explicitly and tend to ignore critical scholarship on these ideas. After summarizing the theoretical dimensions of territory, place, flow, and scale in geography, we analyze publications in six leading political science/IPE journals from 2010 to 2022 to identify articles related to trade that draw on one or more of these four concepts. Using a mix of quantitative text analysis and close qualitative readings of selected articles, we find that IPE scholars occasionally use territory, flow, and scale explicitly, but more often their use is implicit. In contrast, place is used rarely, only implicitly, but perhaps offers the greatest opportunity to frame new questions in studies of trade. More generally, we conclude that explicit attention to these four concepts and their use in critical geography scholarship, would help to develop richer, more critical IPE approaches.

Earnest struggles: structural transformation, government finance and the recurrence of debt crisis in Senegal

Faced with a more multipolar world, scholars of International Political Economy are sharpening their tools to make sense of the longue durée of post-colonial institutions, international financial subordination and the quest for self-determination. This article develops the notion of ‘earnest struggles’ in Senegal’s postcolonial history and shows that successive governments have indeed tried to move their country forward against the odds. The focus is on three struggles: First, the attempts at transforming the Senegalese economy away from colonial cash crops and the influence of the French from 1960 to 1980. Second, the struggle of grappling with Global South debt crisis and the devaluation of the Franc CFA by 50% between 1980 to 2004. Third, the struggle to expand the Senegalese economy with newfound fiscal space and novel forms of external debt since international debt relief in 2004 until today. Based on financial data and interviews in Dakar and Paris, I argue that these struggles have led to some structural transformation. However, the danger of debt crisis has not gone, and economic self-determination has remained precarious. Dependence on foreign finance has stayed and reached record levels in recent years. Relative delinking and the search for regional complementarities offers a more promising avenue to break out of the structural condition of international financial subordination.

The “EU‐Leash”: Growth Model Resilience and Change in the EU’s Eastern Periphery

Although the EU’s Eastern periphery has been afflicted by a series of crises over the past two decades, the region’s dependent market economies have shown puzzling resilience. Since the global financial crisis, the FDI-led, export-oriented growth models of the Visegrád countries have been reinforced. Meanwhile, the debt-based, consumption-oriented capitalism of the Baltic states has not experienced dramatic shifts either, despite a strengthening of its export component. Scholarly accounts from a comparative political economy perspective explain this resilience as the product of country-specific factors and tend to downplay the role of external influence. Instead, we aim to bridge these approaches with international political economy scholarship by arguing that European integration, in general, and the EU’s transnational regulatory influence, in particular, serves as an external anchoring mechanism for both semi-peripheral growth models. In addition to the region’s structural characteristics, such as deep embeddedness in global value chains, high exposure to trade with the EU, and dependence on external sources of finance, which already limit domestic agency in changing national growth models, we argue that European transnational regulatory integration involves an “EU-leash” that sets the boundaries for domestic economic policies, thereby influencing growth model trajectories. This ensures institutional continuity and prevents sudden and radical changes in semi-peripheral growth models. We demonstrate these mechanisms through two country studies (Estonia and Hungary).

Emerging market multinationals and international investment agreements

This study investigates the effects of international investment agreements (IIAs) on the internationalization decisions of emerging market multinationals (EMNEs). Drawing on the POLI advantage framework, we argue that bilateral investment treaties (BITs) add to the political and institutional capabilities of EMNEs, enhancing their OLI advantages in host countries. We identify two mechanisms through which BITs facilitate EMNEs’ internationalization: by offsetting political risk and by mitigating the informational asymmetries and transaction costs associated with investing in unfamiliar destinations. We probe the plausibility of our claims with data from an original survey of firms in four emerging economies and a larger sample of bilateral FDI flows from UNCTAD’s FDI/MNEs database. Our findings show a positive association between BITs and FDI from the South, especially in politically unstable and unfamiliar contexts. Apart from adding to the International Business literature on EMNEs, this study contributes to International Political Economy scholarship on FDI by highlighting the growing relevance of South-South IIAs.

Political economy of the ‘informal’ housing question: institutional-hybridity of the postcolonial state

In recent years, International Political Economy (IPE) scholars have increasingly turned their attention to cities. However, their primary focus has been on the role of a select few global ‘cities’ that regulate global flows of capital, goods, and services. Nonetheless, a significant gap in the IPE literature pertains to the limited exploration of how processes of neoliberal globalization are impacting and regulating the low-income ‘informal’ housing sector in cities located in the global South. To address this gap in the existing IPE literature, this paper critically analyzes the processes of formation and demolition of informal housing settlements against the backdrop of the neoliberal regime of accumulation. Informal housing settlements have been extensively examined by critical geographers and scholars in the field of urban studies. What distinguishes this paper is its unique contribution to the literature on IPE, that is, it utilizes the political economy of informal housing settlements as an entry point to critically analyze social ontology and the inherent contradictions of the postcolonial state. The paper argues that the relationship between informal housing settlements and the postcolonial state can be better understood through the lens of the ‘institutional hybridity.’ This concept refers to the fusion of contradictory socio-economic and institutional impulses within the postcolonial state, which aims to manage social reproduction and capitalist accumulation simultaneously. The inherent tension between social reproduction and accumulation manifests in the informal housing settlements in the form of a dialectic of ‘benevolence-violence.’ On one hand, the postcolonial state attempts to appear ‘benevolent’ towards marginalized groups by ‘allowing’ them to establish informal housing settlements through a multi-layered network of clientelism. On the other hand, the postcolonial state resorts to violent displacement of marginalized groups as soon as they pose obstacles to real estate-led capitalist accumulation. Thus, the paper contends that IPE scholars should carefully consider the political economy of informal housing settlements, as it provides captivating insights into the mechanisms through which the postcolonial state becomes subject to regulation and is pulled in different directions by the socio-economic forces of neoliberal globalization.

China reshaping green value chain initiatives: between global and Southern standards

The paper contributes to the growing debate about how China drives change in institutions and norms of global governance. It analyses the case study of China’s approach to transnational voluntary sustainability standards as concrete tools of Western-sponsored green value chain initiatives, between integration and contestation. Engaging international political economy scholarship, the paper shows that China participates in such initiatives by reshaping their focus away from contested market-based approaches to more internationally consensual state-led ones. This stance indicates that China’s reshaping of international norms and institutions conveys claims made by Global South alliances. These alliances are increasingly important for China, not only politically and militarily but also economically and for the success of key initiatives, like the Belt and Road Initiative.

Organizing for transformation: post-growth in International Political Economy

The global political economy is organized around the pursuit of economic growth. Yet scholars of International Political Economy (IPE) have been surprisingly slow to address its wide-ranging implications and, thus, to advance debates about post-growth alternatives. The premise of the article is that for IPE to deepen its grasp of the escalation of contemporary socioecological crises both analytically and normatively, it needs to put the growth question front and center. To problematize the pursuit of economic growth from an IPE perspective, we bring together research on green growth, post-growth/degrowth, sustainability transitions and socioecological transformation. More specifically, we develop an analytical framework that revolves around four pathways of reorganization toward socioecological sustainability: (1) modification, (2) substitution, (3) conversion and (4) prefiguration. We use illustrative examples from the plastics and food sectors to show how the post-growth pathways of conversion and prefiguration could interact to trigger change for sustainability. Notably, our discussion reveals that conversion, which requires a strong state for developing post-growth institutions, is the least traveled pathway in both sectors. This insight points to a strategic priority for post-growth proponents and an urgent research agenda for IPE scholars.

States and new markets: the novelty problem in the IPE of finance

Finance has changed, and the study of finance needs to change with it. Previously marginal actors—hedge funds, index providers, tech firms, etc.—have become lynchpins in the global financial system. Likewise, the traditional subjects of international political economy (IPE)—states, international organizations, banks, central banks, etc.—are engaging in once-peripheral spheres. Yet, these novel trends have been largely ignored in mainstream political science and international relations venues for IPE scholarship. We demonstrate this through a discussion of two trends—the rise of shadow banking and central bank involvement in climate change—and an analysis of publications in top international relations and political science journals. While previous commentaries identify a methodological and epistemological divide in IPE, our results suggest an empirical one. We then construct a practical framework to remedy this problem by returning to the work of Susan Strange. Strange’s approach embodied a radical ontology, a focus on structures and their interaction, and an analytical eclecticism that provided keen insights into the politics of finance. We argue that these principles, often embraced in Review of International Political Economy, should be applied more broadly by IR scholars to better contribute to debates on emerging political economic issues.

Accounting for whom? The financialisation of the environmental economic transition

ABSTRACT Accounting standard-setters including the International Financial Reporting Foundation have recently begun to revisit the relationship between accounting and sustainability to address issues of environmental economic transition. How has sustainability become an issue of interest to accounting standard-setters? And how do accounting standards intend to contribute to the environmental economic transition? Scholars of international political economy and cognate fields have devoted little attention to the study of international accounting standards, particularly in relations to sustainability. Drawing on a set of qualitative data and an interdisciplinary literature on finance and financialisation, this article first argues that accounting standard-setters’ interest in sustainability is the result of the incremental transformation of environmental issues into meaningful information for investors’ decision-making. Secondly, it shows that these standards and their development are based on the premise that the environmental economic transition depends on the provision of information that primarily meets the needs of investors, contrasting starkly with the original underpinnings of sustainability accounting. Overall, both the fact that financial accounting standard-setters are becoming involved in sustainability, and the way that they are addressing this issue, are further evidence of a financialisation of the environmental economic transition.

Critical junctures and state actors: towards a micro-strategies approach of the global political economy

Scholarship in International Political Economy (IPE) has traditionally explored the systematic nature of global economies and, due to its founding moment in the 1970s, placed a particular emphasis on global capital movements. Famously, Susan Strange, one of the founders of the discipline, examined the new troubles around currency and monetary systems and called for a deliberate linking of the political and the economic, as well as the domestic and the international. Even though this call could not be timelier in the 21st century, already ridden with crises – contemporary mainstream IPE scholarship has shied away from examining complex relations of the domestic and the global, focusing instead on rational interests of voters, sectors and factors of production. The state, while relevant as an entity that aggregates these interests, is not included as an independent agent. This commentary argues that there is already important scholarship which places ‘the state’ at the centre of a complex global economy. But we need to delve deeper. In order to understand what ‘states do’, we also need to understand what ‘what state actors do’ and assess them as fundamentally purposive and independent agents. To make sense of the nexus of the economic and the political, the global and the domestic, we need to understand the interests, relationships and conflicts of individual state actors in the global political economy.

The intellectual and institutional challenges for International Political Economy in the UK: Findings from Practitioner Survey Data

AbstractThis article asks whether there is a discrepancy between the field of International Political Economy (IPE) as we know it from recent debates about its role, distinctiveness, and contribution compared to the experience of its practitioners on the ground? Intellectually IPE is needed more than ever to engage real world events but faces constraining institutional imperatives. We have two interrelated objectives related to this: (1) to assess the extent to which the patterns in recent interventions are replicated when you ask those who self-identify as IPE scholars in the UK (2) to appraise survey data on the reproduction of a particular community of practice within the field as it evolves intellectually and institutionally. Rather than imposing our interpretation of IPE through publications, citation practices, conference attendance, or textbook content we offer two distinct contributions. First, to report new empirical data on IPE as a ‘field of inquiry’ in UK universities; and, second, to develop a critical intervention on the indisciplined nature of IPE as a field of inquiry in the UK. We conclude that the widely acknowledged and long-standing fertile intellectual advantages of IPE's ‘open range’, unlimited intellectual borders and transgressive enquiry bring institutional disadvantages with them.

Where You Work Is Where You Stand: A Firm-Based Framework for Understanding Trade Opinion

AbstractWhat determines public support for trade liberalization? Scholars of international political economy have generally focused on the effects of openness on employment via individuals’ skill level, sector, or occupation. Recent developments in trade economics suggest that the characteristics of individual citizens’ employing firms may also shape their attitudes on trade policy. In this paper, using under-explored survey data combining trade opinion with measures of employer productivity (from the 2008 Japanese General Social Survey), we present evidence that employees of more productive, more globalized firms are much more supportive of trade openness than employees of less productive, domestically oriented firms, even when accounting for skill level and sectoral and occupational characteristics. Moreover, we find evidence that the effects of these characteristics described in the literature are conditioned by globalized firm employment. Last, we find that the effect of globalized firm employment is conditioned by employees’ relative position within their firms. Those who are more likely to benefit directly from firm success—such as permanent employees and managers—hold the most pro-trade preferences. These findings suggest that economic interests affect individual policy preferences in more nuanced ways than previously recognized.

FX Swap Valuation As a Cost of Filling Dollar Funding Gap: A Hierarchical and Dealer-Centric Perspective

This paper constructs a model of the FX swap valuation, the cost of synthetic dollar borrowing, based on the dealers’ behavior and the hierarchy of international finance. In this model, three fundamentals- market-making costs (measured by dealers’ bid-ask spreads), dollar funding liquidity risk (measured by CIP deviation), and the FX swap market liquidity (measured by the dealers’ competition)- derive the valuation of FX swap. The goal is to understand the financial instability spillovers between FX swaps and offshore US-Dollar funding markets through the “dealers” channel. FX dealers are vital institutions that connect different national monetary jurisdictions in the international monetary system. For currencies where FX turnover is low, market makers are central banks. On the other hand, those dealers are primarily private banks for currencies with the highest FX turnover, such as the US dollar. Nevertheless, studying the “dollar funding gap” through the lens of FX swap dealers is a feature that often gets overlooked in International Political Economy scholarship.

Who generated the loopholes? A case study of corporate tax advisors’ regulatory capture over anti-tax avoidance legislation in Finland

Abstract Recently welfare economists and international political economy scholars have increasingly discussed how the corporations seek profits by corroding policies that tackle tax avoidance and undermine public interest. This article contributes to these discussions on so-called regulatory captures in the global wealth chains by providing a comprehensive case study on anti-tax avoidance legislative processes in Finland. The author analyzes the statements that various stakeholders provided during several phases of enacting the interest deduction limitation rule that targets so-called thin capitalization arrangements. Because of this specific research material, the author is able to undertake a nuanced analysis in describing how and whose statements made the difference from the draft version of legislation to the final wording of the law. The evidence suggests corporate interest groups and tax advisory firms influenced the content of the rule as notable tax base eroding loopholes have been included in the Finnish anti-tax avoidance rule. The author also assesses remedies of regulatory captures.

Bridging international political economy and public policy and administration research on central banking

ABSTRACT Central banking as an avenue of research has been of interest to scholars from International Political Economy (IPE) and Public Policy and Administration (PPA) disciplines. Nevertheless, there is very little dialogue between these two perspectives to bridge macro, meso, micro-level analyses and examine the reciprocal relationship between the global and domestic political economy context and monetary policy conduct. This article investigates the Turkish experience to bridge IPE and PPA scholarship on central banking in emerging economies. In doing so, we adopt an analytic eclectic approach combining multiple structural, institutional, and agential causal explanations with particular reference to the Structure, Institution, and Agency (SIA) theoretical framework. This is because analytic eclecticism complements, speaks to, and selectively incorporates theoretical approaches such as the New Independence Approach (NIA) of IPE and institutional and ideational PPA approaches. Drawing on the empirical context of the historical evolution of the Turkish political economy, we explore domestic and international interactions among micro, meso, and macro levels that shape central banking behavior. Our analysis also reveals how global dynamics are translated into domestic policy choices and how particular ideas influence the policymaking process. The analysis underscores the constraining and enabling influence of international dynamics, politics of ideas on emerging economy central banking, and the essential role individual and organizational agency play in the policymaking process.

Trade, health and social reproduction in a COVID world

ABSTRACT Building on feminist International Political Economy scholarship, my paper traces the effects of the COVID-19 pandemic on the trade and health nexus, taking into account the global productive economy and the realm of social reproduction. I argue that COVID-19 has exacerbated the socio-economic inequalities, including the crisis in social reproduction, that characterised the trade and health nexus prior to COVID-19. However, no ideational shift has taken place during the pandemic whereby trade policy communities conceive of trade as a tool for equitable and sustainable forms of social reproduction, as advocated by feminists, environmentalists, and others. This leaves the exploitative nature of global trade relations and their ambivalent relationship with health and social reproduction intact. I conclude that building back better from COVID-19 requires an ambitious redrawing of global trade relations and discuss a number of reforms that could be applied by global trade institutions today.

How business challenges climate transformation: an exploration of just transition and industry associations in Australia

As the consequences of a warming world intensify and actions to mitigate climate change remain persistently slow, demands for a more radical political economic transition focused on climate and justice have grown. ‘Just transition’ is one such counter-hegemony that has gained wide appeal within the field and practice of international political economy. Through document analysis and interviews with industry associations in Australia, this article seeks to demonstrate the pliability of just transition, a plasticity that allows incumbent business interests to ‘remake’ what is just within a just transition. Underpinning this analysis is a novel theoretical framework based on ‘justification of worth’, which shows that fossil capital seeks to outmaneuver calls for just transition by discursively re-aligning justice with the ‘common good’ of fossil capital hegemony. The article therefore assists scholars of international political economy to understand the discursive strategies through which powerful incumbent actors endeavor to maintain fossil capital hegemony in response to justice focused counter-hegemonies.

From Latin American International Political Economy to Latin American Global Political Economy

This paper focuses on the differences between International Political Economy (IPE) versus Global Political Economy (GPE) in Latin America. It explores how IPE tends to be taught and researched beyond mainstream IPE but in dialogue with it. It engages with the main literature of this field to discuss the contours and extension of a transition in teaching and research. It rests upon a historical sociological approach and employs a qualitative analysis of syllabi and curricula of various masters and doctoral programs on International Relations/Studies and underlying disciplines, and is complemented with semi-structured interviews with leading scholars of IPE from across the region. The paper argues that there is a shift from mainstream IPE to a new Latin American GPE as the result of a revitalization of the field and as a response to the new regional and global challenges. New dynamics of development, conflict and a changing world order coexist with old problems, pushing our field to find new responses, demonstrating the limits of the traditional knowledge, and requiring the development of new contributions. While the shift may be minor, it is constant and steady, and is neither homogenous nor dominated by a unique vision of the field, but it is defined by heterogeneity and plurality.

The legacy of Frank H. Knight for the politics of financial governance

AbstractThe politics of financial governance under conditions of uncertainty has re-emerged as a significant issue for scholars of International Political Economy and related fields, not least because of the fallout from the 2007-2008 financial crisis. In this article I assess the legacy of Frank H. Knight's Risk, Uncertainty, and Profit for debates about reconceptualising financial governance and fostering financial stability. I argue Knight's book is productive in assisting understanding of the fallacies of the ‘risk-based’ economic theory tending to underpin financial governance, in particular drawing attention to the limitations of social scientific knowledge that reduce governance capacity and increase uncertainty in financial markets. I further argue, after Knight's deliberately paradoxical approach, that uncertainty in finance might be beyond regulation but at the same time there is still a societal need to attempt to achieve a politics of uncertainty that can cope with ignorance of the future through experimental governmental efforts.