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Chapter

Cover Contemporary Security Studies

18. Economic Security  

Gary M. Shiffman

This chapter provides an economic framework for analysing and countering organized violence. Looking closely at economics as a scientific approach to understanding human behaviour provides insight into the real-life of criminals, terrorists, and insurgents. Individuals make decisions under conditions of scarcity, and markets, firms, and entrepreneurs organize much of human behaviour. Understanding these dynamics can inform how policy-makers, analysts, and operators promote security.

Chapter

Cover Comparative Politics

22. The Impact of Public Policies  

Jørgen Goul Andersen

This chapter examines the effects of public policy. It first considers economic paradigms and approaches to welfare and documents the overriding historical changes in approaches to the economy, from Keynesian ideas of macro-economic steering to more market-oriented economic perspectives. It then explores the idea of institutional complementarity, as expressed in the typologies of welfare regimes, varieties of capitalism, and flexicurity. It also looks at some of the empirical analyses of the effects of welfare policies and the tension between welfare and economic efficiency. Finally, it looks at policy feedback, path dependence, policy learning, social learning, policy transfer and policy diffusion, and policy convergence.

Chapter

Cover Foreign Policy

12. Economic statecraft  

Michael Mastanduno

This chapter explores the link between economic instruments of statecraft and the broader foreign policy goals and strategies of states. Economic sanctions are used in conjunction with diplomatic and military measures in response to foreign policy problems and opportunities. However, they are not always effective. The chapter begins with a discussion of the instruments and objectives of economic statecraft, including trade restrictions, financial sanctions, investment restrictions, and monetary sanctions. It then explores the potential of economic incentives as a tool of statecraft and the question of whether economic interdependence leads to harmony, as liberals believe, or conflict among states, as realists predict. It shows that economic interdependence can either lead to peace or conflict depending on the future expectations of policy makers, the nature of the military balance, and the form that economic interdependence takes.

Chapter

Cover European Union Politics

17. Trade and Development Policies  

Michael Smith

This chapter focuses on the external economic relations of the European Union—the longest-established area of collective European international policy-making and action—and specifically on trade and development policy. The chapter begins by examining institutions and policy-making for trade, in which the Commission plays a central role in initiating and conducting policy, and looks especially at the Common Commercial Policy (CCP). It goes on to examine development policy—an area of mixed competence, in which policy responsibility is shared between the EU institutions and national governments. The chapter then proceeds to explore the substance and impact of EU trade and development policies, and to assess the linkages between the two areas. The conclusions draw attention to a number of tensions and contradictions in EU trade and development policy, including those arising from the departure of the United Kingdom.

Chapter

Cover Global Political Economy

4. The Domestic Sources of Foreign Economic Policies  

Michael J. Hiscox

This chapter examines the domestic sources of foreign economic policies. Different people in every society typically have different views about what their government should do when it comes to setting the policies that regulate international trade, immigration, investment, and exchange rates. These competing demands must be reconciled in some way by the political institutions that govern policy making. To really understand the domestic origins of foreign economic policies, we need to perform two critical tasks: identify or map the policy preferences of different groups in the domestic economy; and specify how political institutions determine the way these preferences are aggregated or converted into actual government decisions. The first task requires some economic analysis, while the second requires some political analysis. These two analytical steps put together like this, combining both economic and political analysis in tandem, are generally referred to as the political economy approach to the study of policy outcomes. The chapter then considers the impact of domestic politics on bargaining over economic issues between governments at the international level.

Chapter

Cover European Union Politics

22. Economic and Monetary Union  

Amy Verdun

This chapter introduces economic and monetary union (EMU), describingthe key components of EMU and what happens when countries join. EMU was the result of decades of collaboration and learning, divided here into three periods: 1969–91, from the agreement to creation to its inclusion in the Treaty on European Union (TEU); 1992–2002, from having the plans for EMU to the irrevocable fixing of exchange rates; and 2002 onwards, with EMU established and euro banknotes and coins circulating in member states. The chapter reviews various theoretical explanations, both economic and political, for the creation of EMU and considers some criticisms of EMU. The chapter discusses how EMU has fared under the global financial crisis, the sovereign debt crisis, and the COVID-19 pandemic. These crises highlighted various imperfections in the design of EMU and provided opportunities for further development. This chapter discusses changes made since 2009 to address those flaws and what may be yet to come.

Chapter

Cover Global Political Economy

12. Global Growth, Inequality, and Poverty:  

Power and Evidence in Global ‘Best Practice’ Economic Policy

Robert Hunter Wade

This chapter argues that economists have oversold the virtues of globalization, displaying confidence in derived policy prescriptions well beyond the evidence. The most spectacular recent demonstration of hubris is the failure of almost the whole of the mainstream economics profession in the few years before 2007–8 to forecast a major recession. The chapter then outlines the neo-liberal world view and its application in the form of the development recipe known as the Washington Consensus. Since the 1980s, the Western economic policy ‘establishment’ has espoused a doctrine of ‘best economic policy’ for the world which says, put too simply, that ‘more market and less state’ should be the direction of travel for developed and developing countries. This overarching neo-liberal ideology embraces globalization as a major component, relating to the nature of integration into the international economy. The chapter then looks at trends in world income distribution and poverty, bearing in mind the optimistic claims of the globalization argument.

Chapter

Cover Global Political Economy

15. State power and geopolitics  

Andrew Hurrell

This chapter covers three dimensions in answering questions about the role of state power and geopolitics in the Global Political Economy (GPE). The first answer focuses on how changes in the global economy affect the nature and the effectiveness of the economic instruments available to governments as they pursue their foreign policy goals. The second cluster of answers focuses on the ways in which politics and economics are bound together in the construction and evolution of economic institutions and economic orders. The third cluster of answers accepts the need to think in terms of power operating within economic orders but this time with the causal arrow flowing from politics into the economy. Ultimately, the dynamics of the international political system are what drive the foreign economic policies of governments, shape the states and societies making up the global system, and help explain the character and operation of the global economy.

Chapter

Cover US Foreign Policy

18. Global economy  

Peter Gowan and Doug Stokes

This chapter examines some of the central debates on how we should understand the United States’ efforts to reshape international economic relations since the 1940s. It first considers debates on the sources and mechanisms of American economic strategy before turning to debates about the substance of American efforts to shape the global economy. It approaches the debates about the substance of U.S. foreign economic policy since 1945 by classifying varying perspectives on this question in three alternative images. The first such image is that of America as the promoter of a cooperative, multilateral order in international economics. The second image is that of an American economic nationalism and the third is that of an American empire. The chapter goes on to analyse the global financial crisis and concludes with an overview of some of the main current debates about the strength of American capitalism in the world economy.

Chapter

Cover Politics in the Developing World

16. Development  

Tony Addison

This chapter examines development policy objectives and their explicit focus on poverty reduction. It first considers different definitions of development policy objectives before discussing the roles that the market mechanism and the state should play in allocating society’s productive resources. In particular, it looks at the economic role of the state as one of the central issues dividing opinion on development strategy and explains how rising inequality led to a backlash against economic liberalization. The chapter proceeds by exploring the relationship between economic growth and poverty reduction, along with the political difficulties that arise from economic reform. It also analyses the importance of transforming the structure of economies and the new global development landscape, including changes in development finance.

Chapter

Cover Politics in the Developing World

17. Environment  

Peter Newell

This chapter examines how developing countries are managing the relationship between the environment and development. Despite being widely regarded as a threat to their economic development and prospects for growth, environmental issues have come to occupy a central place on policy agendas throughout the developing world. Driven by donors, public concern, and vocal environmental movements, responses to these environmental issues have taken a number of different forms as they compete for ‘policy space’ with other pressing development concerns. The chapter links global agendas to national policy processes, highlighting differences and similarities between how countries respond to various environmental issues. It also considers patterns of continuity and change in the politics of environment in the developing world, along with new policy instruments for environmental protection. It concludes by reflecting on the likely future of environmental policy in the developing world.

Chapter

Cover Poverty and Development

26. Returning to the ‘Great Transformation’  

John Harriss

This chapter recounts how Karl Polanyi developed an explanation for the rise of fascism and for the world crisis of the mid-twentieth century. In doing so, he elaborated a profound critique of the kind of thinking about economic development — described as 'market fundamentalism' and commonly referred to as neoliberalism. In the early twenty-first century, neoliberal economic policies, together with the implications of rapid technological change, have caused a crisis, comparable with that analysed by Polanyi, in which social, environmental, and financial problems are interwoven, and to which the rise of authoritarian populism is one response. The Covid-19 outbreak has further exposed the unsustainability of the global system of market fundamentalism and may point to another 'great transformation'. It is possible that a combination of worldwide movements against inequality and environmental degradation with local struggles for citizenship, economic and social rights, and environmental justice among the masses in major 'emerging economies', such as India, can provide a platform for a social democratic alternative.

Chapter

Cover Politics in the European Union

7. The First Years of the European Economic Community (the 1960s and into the 1970s)  

This chapter focuses on the first years of the European Economic Community (EEC). It describes the early 1960s as a period of apparent success for the supranational elements within the EEC, noting the rapid progress made towards the creation of both a common market and a common agricultural policy. The chapter also examines the crisis sparked by France’s decision to boycott meetings of the Council of Ministers in response to proposals for a more supranational method of funding the EEC budget; the impact of this crisis on the process of European integration; the so-called Luxembourg Compromise; and the Hague Summit. It concludes by discussing the EEC’s expansion of its membership at the start of the 1970s, as well as its first moves towards an Economic and Monetary Union and a Common Foreign and Security Policy.

Chapter

Cover Policy-Making in the European Union

1. An Overview  

Mark A. Pollack, Christilla Roederer-Rynning, and Alasdair R. Young

The European Union represents a remarkable, ongoing experiment in the collective governance of a multinational continent of nearly 450 million citizens and 27 member states. The key aim of this volume is to understand the processes that produce EU policies: that is, the decisions (or non-decisions) by EU public authorities facing choices between alternative courses of public action. We do not advance any single theory of EU policy-making, although we do draw extensively on theories of European integration, international cooperation, comparative politics, and contemporary governance; and we identify five ‘policy modes’ operating across the 15 case study chapters in the volume. This chapter introduces the volume by summarizing our collective approach to understanding policy-making in the EU, identifying the significant developments that have impacted EU policy-making since the seventh edition of this volume, and previewing the case studies and their central findings.

Chapter

Cover The Institutions of the European Union

3. The European Council:  

the Union’s supreme decision-maker

Luuk van Middelaar and Uwe Puetter

This chapter discusses the central role of the European Council in European Union (EU) politics and policymaking. Even though it was not listed among the EU’s core institutions until the Treaty of Lisbon, the European Council regularly intervenes in EU decision-making to make other institutional actors follow its guidance. Initially, it was meant to be predominantly an informal institution for direct exchanges between the heads of state or government of the member states. Yet it assumed responsibility for landmark decisions which paved the way for key steps in integration, such as EU enlargements and the euro. The European Council has arguably saved the Union from break-up by acting as its ultimate crisis manager and, at times, has skirted the boundaries of EU law by finding institutional compromises and fixes. The institution plays a guiding role, especially in relation to the Commission and the Council of the European Union, which was formerly known as the Council of Ministers. The European Council devises strategic guidelines for policy development, shapes processes of institutional reform, and breaks impasses when agreement cannot otherwise be found. Since the Treaty of Maastricht, European Council intervention has become a routine in new EU policy areas, such as euro area economic governance and foreign policy. The Treaty of Lisbon assigns the European Council its own full-time president and places the institution right after the European Parliament (EP) in the list of EU institutions. Even though it has shaped European integration since 1975, the European Council did not find much recognition in traditional theories of European integration. This has changed more recently, with renewed debate about intergovernmentalism in EU politics.

Chapter

Cover Global Political Economy

4. Globalization and neoliberalism  

Jacqueline Best

This chapter evaluates the contested concepts of globalization and neoliberalism, and looks at their role in Global Political Economy (GPE). There are significant debates about the political salience of globalization, with hyperglobalists, sceptics, and transformationalists disagreeing on its implications for the power of the state. Scholars also disagree about when the era of globalization began. Meanwhile, neoliberalism is a set of economic ideas and policies built upon a belief in the ‘free market’ as an unquestionable value in political and economic life. Neoliberal globalization has increased living standards in many parts of the world while also intensifying inequality along the lines of class, race, and gender. At the heart of debates about neoliberalism and globalization are three core puzzles: whether they are primarily depoliticizing or repoliticizing strategies; whether they are best understood by looking at global-level processes or at changes in everyday life; and whether their power is primarily material or ideational.

Chapter

Cover International Relations Since 1945

25. Economic Problems in the West and the Economic Rise of China in the East  

This chapter examines the shift in global balance that began in the post-2007 economic crisis. For a considerable time before the 2008 crisis, the United States and most European states had been living on high levels of debt both national and individual, public and private. Manufacturing in the developed West, and its provision of secure jobs for many workers, was undermined by the new economic environment of globalization, as well as the growth of cheaper manufacturing in China and the other BRIC countries. A new epoch of financial capitalism, which had emerged since the 1980s, was in full swing by the start of the Noughties. The chapter first considers the post-2007 economic crisis, before discussing the continuing rise of China and Russian foreign policy under Vladimir Putin. It concludes with an assessment of international reactions to China’s rise, including those of East Asia, international organizations, and Taiwan.

Chapter

Cover Contemporary Terrorism Studies

23. Foreign Policy and Countering Terrorism  

Rashmi Singh

This chapter explains how foreign policies intersect and interact with terrorism and counterterrorism. It considers core instruments of foreign policy and methods for countering terrorism. Examples include diplomacy and culture, economic statecraft, and the military. There is some evidence suggesting the use of military pressure can be quite effective in achieving specific policy objectives. However, the chapter also emphasizes how an interrelationship and interdependence between foreign policies and counterterrorism could hinder the fight against terrorism. The sub-divisions of countering terrorism are anti-terrorism, counter-terrorism, and consequence management. States must include compromise elements in their foreign policy in their direct dealings with other governments when it comes to countering terrorism.

Chapter

Cover The Institutions of the European Union

16. The European Economic and Social Committee and the Committee of the Regions:  

consultative institutions in a multichannel democracy

Gabriele Abels

This chapter investigates the European Economic and Social Committee (EESC) and the Committee of the Regions (CoR), two bodies established in 1957 and 1992, respectively. Both Committees are consultative; their rationale is to provide expertise to EU legislators and to represent functional respectively territorial interests. These organs share a number of similarities with regard to their legal basis and policymaking influence. Both have pursued diverse activities beyond their official mandates in a quest to find their own identities and exercise voice in the EU system. This chapter analyses these committees with regard to their development, membership, and activities, illustrating how both embraced timely topics and seek to involve themselves in the larger debate on the future of Europe. Thereby, they contribute to the EU’s development as a complex, multilevel, and multichannel democracy.

Chapter

Cover Poverty and Development

25. Climate Change and the End of Development  

Dina Abbott, Gordon Wilson, and Alan Thomas

This chapter studies how the debate on climate change has evolved and how development relates to climate change. Climate change relates to development in two main ways. First, economic development is likely to exacerbate future climate change. Second, climate change as it occurs impacts on development, often negatively. The different ways in which climate change relates to development lead to different types of intervention. Climate change mitigation policies are designed to limit future climate change or reduce its impact but may themselves curtail development options. Climate change adaptation policies attempt to work with climate change and achieve development in spite of its impacts. There are also policies to cope with 'loss and damage', i.e. extreme, often irreversible, impacts which are too severe for adaptation. Lived experiences of climate change and of the effects of mitigation and adaptation policies demonstrate how their impacts result from the interaction of physical effects with existing social and power relationships, including those of gender.