This chapter investigates the concepts of liberal democracy, democratization, and governance and how they relate to development. There are several critiques of liberal democracy, which mostly correspond to well-known problems for any political regime. They include the 'tyranny of the majority', élite capture, clientelism, and the threat of populist capture. Alternative models claimed by their proponents to be democratic include illiberal democracy, direct democracy, and democratic centralism. Especially for proponents of market economy, liberal democracy and economic development are seen as complementary aspects of modern society. However, it is not clear that democratization leads to development. Successful development requires a supportive institutional environment. This may occur in a liberal democracy but it is not democracy itself that matters but 'something else' — which may be called 'quality of governance', including impartiality and effectiveness.
17. Democratisation, Governance, and Development
David Potter, Alan Thomas, and María del Pilar López-Uribe
This chapter studies the relatively new topic of sharing economy in international political economy (IPE), describing the concepts of marketization of everyday life, the gig economy, and platform capitalism. It begins by looking at ride-sharing, which is an increasingly popular means of transport that constitutes a significant sector in the for-profit sharing economy. Using the Indonesian ride-hailing company Gojek as an example, the chapter draws out fundamental tensions between solidarity and exploitation that underpin processes of marketization in the sharing economy. It then examines different forms of economic organization and their historical lineages. The different principles that can structure economic exchange include householding, reciprocity, redistribution, and the market. Finally, the chapter evaluates for-profit and not-for-profit dimensions of the sharing economy using the diverse economies framework and community mapping.
4. Globalization and neoliberalism
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.
7. Social Media
This chapter explores the increasing significance of social media in international political economy (IPE). How we experience and represent social media has profound implications for the ethical possibilities and limits of global market life. The chapter begins by problematizing social media through the related concepts of self-branding, the attention economy, and the prosumer. It then looks at social media via two popular documentaries on Netflix: Fyre: The Greatest Party That Never Happened (2018) and The Social Dilemma (2020). These documentaries tackle questions of reform and regulation, identifying how social media data carries immense value for corporate marketing, political strategy, credit rating, and other ways of knowing and governing society. This helps to establish an important dilemma: is social media a free and democratic space or a new infrastructure of surveillance? Finally, the chapter reflects on the politics of social media by considering different forms of critical agency.
9. Financial Openness and the Challenge of Global Governance
Louis W. Pauly
This chapter studies the globalization of finance. The world economy today reflects a systemic experiment involving, on the one hand, the unleashing of cross-border capital movements and, on the other, the dispersion of the political authority necessary to oversee and, when necessary, stabilize the markets through which vast amounts of capital now flow. Resulting tensions become most obvious during financial crises, when those flows suddenly stop or reverse their direction. In the late twentieth century, most such crises began in emerging-market or developing countries and had limited systemic consequences. In 2008, however, the global experiment capital market openness, now far along in its evolution, almost failed catastrophically when policy mistakes in the United States combined with large national payments' imbalances and a broad economic downturn to spawn a worldwide emergency. Shortly thereafter, Europeans at the core of the system narrowly escaped a similar disaster at the regional level. The chapter then explores key implications for contemporary global governance. It calls particular attention to the increasingly difficult and variegated politics of systemic risk assessment, emergency management, and future crisis prevention as the experiment continues.
26. Returning to the ‘Great Transformation’
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.
14. Energy Policy
Sharp Challenges and Rising Ambitions
This chapter examines three strands of the European Union’s energy policy: the internal energy market, energy security, and climate change. Energy policy has rapidly gained in importance for the EU, as it faces the challenges of creating an internal energy market, increasing energy security, and playing an active role in combating climate change. Reform of the energy market has been a constant activity since the late 1980s and has been based on liberalizing cross-border competition, but this could be increasingly undermined by member-state intervention and subsidy to promote renewable energy and to ensure adequate back-up power. Efforts to curb energy use and to develop a low-carbon economy are at the heart of Europe’s new programmes and targets to combat climate change. The chapter shows that each of the three strands of the EU’s energy policy involve different policy-making communities and illustrate a range of different policy modes.