13/05/2024
International political economy (IPE) is the study of how politics shapes the global economy and how the global economy shapes politics.
A key focus in IPE is on the distributive consequences of global economic exchange.
It has been described as the study of the political battle between the winners and losers of global economic exchange.
A central assumption of IPE theory is that international economic phenomena do not exist in any meaningful sense separate from the actors who regulate and control them.
Alongside formal economic theories of international economics, trade, and finance, which are widely utilised within the discipline, IPE thus stresses the study of institutions, politics, and power relations in understanding the global economy.
The substantive issue areas of IPE are frequently divided into the four broad subject areas of :-
1. international trade
2. the international monetary and financial system
3. multinational corporations
4. economic development and inequality.
Key actors of study may include international organizations, multinational corporations, and sovereign states.
International political economy is a major subdiscipline of international relations where it emerged in the 1960s and 1970s, prompted by the growth of international economic institutions such as the World Bank, International Monetary Fund, and the General Agreement on Tariffs and Trade, alongside economic turmoil’s such as the fall of the gold standard, 1973 oil crisis, and 1970s recession.
IPE is also a major field of study within history, especially economic history, where scholars study the historical dynamics of the international political economy.
International political economy has its historic roots in the discipline of political economy, the study of the national economy and its interactions with governance and politics.
Adam's publication of The Wealth of Nations profoundly influenced the development of the field of political economy.
While the newly founded discipline of economics, which studies economic phenomena absent political and social considerations, began to diverge from political economy studies in the late 19th century, political economy continued to live as an academic tradition within political science departments, as well as within modern economics as a pluralist approach. While notable works from John Maynard Keynes' General Theory and Karl Polanyi's The Great Transformation published in the early 20th century are still written in the tradition of political economy, economics in its narrower form was dominating economics departments from the 1920s and onward.
The emergence of international political economy can be traced to the late 1960s and early 1970s, when deepening economic interdependence prompted by the growth of post-war economic institutions such as the International Monetary Fund, World Bank, and General Agreement on Tariffs and Trade, drew increasing attention within international relations scholarship towards the study of these institutions, and more broadly, to the study of governance of the world economy.
The need for a more comprehensive understanding on global economic governance within political science circles became increasingly apparent through the crises of the 1970s, with the end of the gold standard, the 1973 oil crisis, 1973-1975 recession and calls for greater trade protection.
Influential figures in the emergence of the discipline were international relations scholars Robert Keohane, Joseph Nye and Robert Gilpin in the United States, as well as Susan Strange in the United Kingdom.
IPE has since become a key pillar in political science departments as well as a major subdiscipline of international relations, alongside traditional international relations scholarship centered on material security.
