How Has International Political Economy Transformed?

Gambling Jul 17, 2021

Global politics, also referred to as world political economy, refers to both the field that studies the economic and political patterns of the globalized world and the inter-related political processes that go with these patterns. Within this broad field, there are three key theories that explain how political economies operate: classical economics; geo-political economy; and international institutionalism. In the study of classical economics, the theory of natural order states that a society’s goods, services and wealth are produced in the location where they are consumed or produced. The theory of geo-political economy maintains that political systems tend to maximize their own security through stable trade relationships and liberalization of local production and consumption policies. Finally, the theory of international institutionalism suggests that human beings adopt macroeconomic policies that promote the spread of political freedom and peaceful prosperity globally, while fighting off protectionist tendencies at the national level. These three theories together offer a comprehensive description of how world politics affect the global economy.

World Politics

Classical economists argue that the evolution of the world economy follows a pattern of progressive development that tends towards equilibrium and stability. Geo-political systems, on the other hand, are characterized by chaotic and inter-changing fluctuations of the state of play in world politics. Natural economic laws that maintain a sense of equilibrium are broken down and distorted by the forces of socio-political organization and conflict.

Geo-political systems generally exhibit a highly fluid and disperse distribution of power among political leaders and various political interests. This often leads to regional conflicts and a variety of international political struggles. The diffuse structure of world politics makes global economics more complex than the classical understanding of how the economy works. Political competition and diplomacy result in immense pressures to increase economic growth that can sometimes lead to severe distortion of these processes. Economic globalization has also posed great challenges to the functioning of international institutions such as the World Trade Organization and the European Union.

On the other hand, there is an opposite trend towards increasing economic inter-dependence and de-fusion in global trade. This has increased political influence at the national level and encouraged political experimentation and reforms. The recent past has also seen the European Union undergoes extensive political reforms that were implemented to ensure its economic welfare. The recent economic crisis in Europe has also helped to de-link the European Union from national perspectives and fuel national debates on how the crisis was caused in the first place.

Geo-political systems in the present world are characterized by great variation in their structure of values, goals, and relationships. There is a marked shift towards a regional focus in the international political arena. This has created great disparity between regions and communities across the world. At the international level, there is increasing pressure for greater cooperation and integration of nations. This has led to a shift of interests away from geo-political arenas towards economic issues and trade.

Today’s economic growth in Asia has helped Asian political systems to become more developed and open to the external world. However, this has been accompanied by major internal problems like corruption and poor leadership that have hindered progress. Geopolitics is changing dramatically as different political systems compete for economic opportunities. The future of human civilization is very unpredictable. The emergence of multipolarity – a change where there is a dominance of the major players but none of them dominates – is expected to lead to major shifts in the patterns of world politics.

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