POLST 362'3 The International Political Economy IPEof Biotechnology

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POLST 362.3 The International Political Economy
(IPE)of Biotechnology

• Lecture 07
• The Study of IPE

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POLST 362 The Study of IPE

• Outline
• Overview The basis of IPE
• the study of international political economic
  integration
• IPE Areas of Inquiry
• Combining Gilpin Chapters 4 and 6

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POLST 362 The Study of IPE

• Overview The basis of IPE inquiry is
• Political (Lecture 03)
• study of states/authorities
• Political perspectives liberalism, marxism,
  nationalism, realism
• Economics (Lectures 04, 05 06)
• study of markets
• Economic perspectives neoclassical new
  theories (NGT, NIE, NTT)
• International (Todays lecture )
• study of integration of states markets
• International Political Economy areas of Inquiry

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POLST 362 The Study of IPE

• Two Broad Areas of Inquiry
• The dynamic, transitional issues associated with
  international integration
• Focus on Gains/Losses from International
  Integration
• National Autonomy Gains/Losses
• Absolute relative distribution
• Focus on Governance of International Integration
• International Institutions/Regimes
• Hegemonic Stability Theory

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POLST 362 The Study of IPE

• Recall from Lecture 03 (Chapter 02)
• Four different perspectives on analyzing these
  two broad areas of inquiry
• Liberalism
• Marxism
• Nationalism
• Realism
• State-centric realism
• System-centric realism

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POLST 362 The Study of IPE

• International Integration

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POLST 362 The Study of IPE

• But First
• what is international integration?
• The dynamic process whereby the economic and
  social (political, cultural, normative, etc.)
  dimensions of a nation converge with those
  dimensions of other nations.
• It occurs
• Explicitly (trade agreements, MEAs, Land Mines)
• Implicitly (cultural convergence e.g. internet,
  sports)

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POLST 362 The Study of IPE

• International integration is a neutral term
• Supporters
• based on the belief that collective action among
  independent nation-states can lead to greater
  overall gains/avoid overall losses than possible
  when nations act alone
• Provide global public goods
• Example United Nations
• Critics
• Corrosive force that erodes national/domestic
  economic and social distinctiveness autonomy

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POLST 362 The Study of IPE

• States can choose
• Level of integration
• Regionally (bilaterally or plurilaterally)
• Globally (multilaterally)
• Depth of integration
• Shallow/economic integration
• Deeper/social integration
• Strategy of Integration
• Competition
• Coordination

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POLST 362 The Study of IPE

• Examples of integration
• Level of Integration
• Regional Global
• Shallow/Economic Shallow/Economic
• NAFTA, MERCOSUR WTO
• ASEAN MAI
• Deeper/Social Deeper/Social
• EU, TAED CITIES, BSP, TACD Basle
  Convention

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POLST 362 The Study of IPE

• Two Broad Areas of Inquiry of IPE
• Gain/Loss from International Integration
• Governance of International Integration

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POLST 362 The Study of IPE

• First Gains/Losses from International
  Integration
• National Autonomy Gains/Losses
• absolute relative distribution of economic
  wealth political power
• Clash of the Logic of the Market Logic of the
  State
• States calculate their gain/loss from
  international integration
• In absolute terms
• Relative to other states
• During the dynamic transition between the old
  equilibrium and the new equilibrium

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POLST 362 The Study of IPE

• This is consistent with both
• A state-centric realist view
• New economic theories
• Examples
• Terms of trade
• World Biotechnology Trade Initiative
  WTO-style
• Biosafety Protocol MEA
• Investment in Knowledge-Based Growth
• Innovative clusters

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POLST 362 The Study of IPE

• States pursuing their own best interest is
  neither always good nor always bad
• Sometimes individual states pursuing their own
  best interest can result in
• A positive global externality
• Health care policies, education policies
• Yet, the result can also be
• A negative global externality
• Environmental degradation, food safety

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POLST 362 The Study of IPE

• Of central concern to states is the impact of
  international integration upon domestic autonomy
  
• Both economic and political
• Some argue never a net loss
• If every state agrees to the same rights and
  obligations, then there is no real change in
  state power vis-à-vis other states
• Example Lipsey (1988) Canada-US FTA

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POLST 362 The Study of IPE

• Others argue always a loss of autonomy
• International integration starts at the border,
  then works its way into the social fabric
• Thus requiring a benefit-cost analysis
• Benefits Sensitivity
• Mutual interdependence, global externalities
• Costs Vulnerability
• Exploitation, erosion of distinctiveness

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POLST 362 The Study of IPE

• States use various strategies to influence the
  gain/loss of international integration, depending
  on whether they are a leader or a laggard in the
  particular policy area
• There is rarely a consistent position on
  integration pursued

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POLST 362 The Study of IPE

• Leaders maximize gain
• Level Global Free Trade
• Liberalized inflows of factors into innovative
  clusters free trade
• Pursuit of international market access rules for
  outflowing innovative products
• Depth Shallow/economic
• Shape international institutions and regimes to
  adopt their economic approach
• Example regulations

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POLST 362 The Study of IPE

• Laggards minimize loss
• Level regional
• protectionist blocks
• Prevent outflows of resources (subsidies)
• Prevent inflow of innovative foreign products
• Depth deeper/social
• Prevent international institutions and regimes
  from disciplining the shared social perspective
  of the block
• Example EU and biotech and hormone-beef?

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POLST 362 The Study of IPE

• Second Governance of International Integration
• For the most part, international integration has
  been based on the ideology of a liberal
  international economic order
• Problem
• power to enforce compliance rests with states
• Solution
• political leadership must be achieved among
  sovereign states, but how ?
• International Regimes Institutions
• Hegemonic Stability Theory

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POLST 362 The Study of IPE

• International Regimes Institutions
• Regimes
• Sets of implicit or explicit principles, norms,
  rules and decision-making procedures around which
  actors expectations converge in a given area of
  international relations
• Accepted Example Principle of Non-Discrimination
  in the WTO
• National Treatment
• Most Favoured Nation
• Like Products
• Controversial Examples
• Precautionary Principle
• Sustainable Development
• Plurilateral Example Human rights

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POLST 362 The Study of IPE

• Institutions
• Formal Organization whose mandate may be the
  creation or protection of regime principles
• WTO PND
• Convention on Biological Diversity Sustainable
  Development
• International Labour Organization employment
  equity
• Generally, it is assumed the International
  Institutions are international governmental
  organizations, not non-governmental
  organizations (NGOs)
• Consumers International
• Greenpeace
• Christian Aid

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POLST 362 The Study of IPE

• A regime can encompass several institutions
• Liberal International Economic Order
• WTO
• IMF
• World Bank
• Sustainable Development
• Secretariat to the Convention on Biological
  Diversity
• UNEP (UN Environment Programme)
• An institution can encompass several regimes
• United Nations
• FAO, WHO, Codex, UNEP, WFP

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POLST 362 The Study of IPE

• Finally, while institutions have a formal
  membership, treaties and conventions have only
  signatories
• WTO v. GATT
• UNEP v. BSP

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POLST 362 The Study of IPE

• International Regimes Institutions exist to
• Minimize transactions costs (NIE)
• Reduce risk/uncertainty
• Prevent/correct market failures
• the inability to provide global public goods
• Further, they rely upon the cooperative behaviour
  of members/signatories
• Did not rely upon a dominant leader
• Example
• EU, no one dominant leader (France Germany
  together)

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POLST 362 The Study of IPE

• International Regimes Institutions
• Provide global leadership (global gains)
• Facilitate cooperation (conciliatory coordination
  of policy)
• Build ideological consensus (emphasizing shared
  values, minimizing differences)
• Example EUs Common Agricultural Policy (CAP)
• in order to provide global public goods
• And any adverse domestic impacts are mitigated by
  the integration strategy of coordination
• Problems solved beforehand
• Therefore, international regimes institutions
  are benign

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POLST 362 The Study of IPE

• International Regimes Institutions ensure
  compliance
• Through mutual concern over collective action
  problem cooperative bargaining game where
  tit-for-tat leads to a retaliatory race to the
  bottom
• Example for tariff barriers to trade
• Example against environmental degradation
• Rules are set to minimize cheating
• Example Science basis in WTOs SPS Agreement

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POLST 362 The Study of IPE

• Critics
• International Regimes Institutions are not
  benign
• Have distributional impacts
• Somebody wins, somebody loses in the bargaining
  for rules
• Instead, they are a cunning attempt to disguise
  US domination
• Example Strange argues that trade does not
  represent cooperative behaviour, it represents
  subversive US-style liberalism
• Critics generally believe in Hegemonic Stability
  Theory (HST)

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POLST 362 The Study of IPE

• Hegemonic Stability Theory (HST)
• Suggests that competing states will not act
  cooperatively enough to realize potential of
  international regimes/institutions
• Instead, requires a leader to use its economic,
  political and perhaps even military resources in
  order to facilitate cooperation and punish
  defection from the rules of integration
• Coercive power, bribes, sanctions
• Example
• US post WWII US leadership in European and
  Japanese reconstruction
• Counterfactual Great Depression no hegemon,
  therefore no strong leadership to prevent state
  self-interest seeking from leading to overall
  losses

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POLST 362 The Study of IPE

• Duties of the Hegemonic leader are to support the
  liberal international economic order through
• Capital lending
• Support for foreign-exchange regime
• Macro-economic coordination
• Historically trade policies
• Increasingly domestic policies (domestic
  creep)
• Lender of last resort
• Via IMF and World Bank

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POLST 362 The Study of IPE

• Supporters of HST argue that without a hegemon
• International Institutions/Regimes
• Cannot credibly create and enforce rules
• Institution Example
• rise of transatlantic trade tensions in the WTO
• Regime Example
• Kyoto Protocol
• Environmental Protectionism while a global public
  good, runs counter to a liberal order because it
  supports protectionism
• Example NTBs based on process and production
  methods

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POLST 362 The Study of IPE

• Conclusions
• IPE the study of international political and
  economic integration over all
• levels
• depths
• strategies
• Two broad areas of inquiry are
• Gains/losses for a state from International
  Integration
• Governance of International Integration