PO942 Theories and Issues in International Political Economy

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PO942 Theories and Issues in International
Political Economy
Week 13 Production and Foreign Direct Investment
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Week 3 - Wednesday 23 January
seminar series
S0.18 4.00 pm
The Current Political Scene in Britain and the
United States The forthcoming elections and who
is most likely to win
Professor Sir Robert Worcester Honorary
Professor, Department of Politics International
Studies, University of Warwick
Also One World Week programme of talks at
http//www.oneworldweek.net/events/forum
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NOTE
IPE of Production The chapter 'Corporate Power
and Global Production Networks' by Held, D. and
McGrew, A. G. and Goldblatt, D. and Perraton, J.
in (1999) Global transformations politics,
economics and culture. Cambridge Polity Press,
pp.236-282, and the Ruigrok Van Tulder chapter
'The myth of the 'global' corporation' In The
logic of international restructuring. London
Routledge, Ch.7, pp.152-174, both of which are
core reading for week 13's seminar on Production
in IPE, have been helpfully scanned by the
library and are available for you to download
here -http//www2.warwick.ac.uk/services/library/m
ain/electronicresources/extracts/po942 IPE of
Finance The Benjamin (Jerry) Cohen chapter on
'International Finance' In Carlsnaes, W. and
Risse, T. and Simmons, B. A. (2002) eds.,
Handbook of international relations. London
SAGE, Ch.22, pp.429-447  which is core reading
for week 14's seminar on Finance in IPE, has been
helpfully scanned by the library and is available
for you to download here -http//www2.warwick.ac.u
k/services/library/main/electronicresources/extrac
ts/po942
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• Now that the timed essays are finished
• Time to start thinking about your research essay
  title
• Deadline for submission of titles is noon, 28
  February week 8
• Your choice of topic, to be negotiated with your
  tutor
• Has to be within the (very) broad remit of the
  module look at the learning objectives
• You are encouraged to follow your interests
• Planning pays!

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• This weeks objectives
• Understanding of how the analysis of production
  is central to political economy
• Overview of the changing context of production
  in the global economy implications for states
  and markets
• The firm as actor states and firms public
  versus market power?
• The place of production in debates about
  globalisation
• Competing IPE perspectives on production, TNCs
  and FDI
• economic nationalist
• liberal
• critical

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Seminar questions
To what extent is it valid to talk about the
globalisation of production? On what broad
theoretical grounds can foreign direct investment
be promoted or opposed? What is the political
significance of increased FDI transborder
production?
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Context the changing nature of production in
advanced capitalist states
FORDISM
POST-FORDISM
mass production
mass consumption
Hollowing out of the national state
(Jessop) Changing organisation of production
Unionisation Labour-management relations Governmen
t intervention
Keynesian welfare state
But by late 1970s/1980s Falling rates of
productivity growth governments active to
retrain wage increases rise of the neoliberal
state decreasing competitiveness of mass
produced goods ? flexible specialisation
differentiated products and production for
targeted consumers rather than social classes
production more market sensitive and hi-tech
just in time techniques moves away from
singular assembly-line production (raw materials
to finished product) to fragmentation
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To what extent is it valid to talk about the
globalisation of production?
http//ucatlas.ucsc.edu/economic.php
http//www1.worldbank.org/economicpolicy/globaliza
tion/documents/AssessingGlobalizationP1.pdf
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• TNCs account for the major part of the global
  production structure and approximately 50 per
  cent of world trade
• Over half of the worlds 500 largest
  corporations are located in only four countries
  170 in the US, 70 in Japan, 38 in France and 38
  in the UK
• (OBrien and Williams, 2007 174)

All data on handouts taken from
here http//www.unctad.org/en/docs/wir2006overvie
w_en.pdf
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On what broad theoretical grounds can foreign
direct investment be promoted or opposed?
Three groups each group is asked to provide a
summary of how its theoretical perspective would
account for, tell the story of and evaluate
FDI Group 1 liberalism Group 2 economic
nationalism Group 3 Marxism
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What is the political significance of increased
FDI transborder production?

• Exercise Debating the Advantages of inward TNC
  Investment
• Your group dispenses policy-advice to a
  developing country government.
• Unemployment is at an historical high. There is
  strong interest in attracting investment by TNCs.
• Decide briefly upon the industrial profile and
  geographic location of your case (country). Why
  have you made this choice?
• Write a short report to the government
• List the advantages of attracting TNC
  investment (3 points)
• Identify problems with TNC investment (3
  points) and
• Speculate on possible solutions to these
  problems.