Politics versus Economics: An Overview of International Political Economy

Abstract

Since the 1970s, academia has made serious endeavors toward the development of International Political Economy (IPE). This discipline initially emerged from the field of International Relations that came into being after World War I, but it differs from the previous studies in many aspects. The most significant characteristic of IPE can be found in the emphasis it places on the interactions between the economics and the politics. The students of International Relations have traditionally regarded as critically and centrally important the military and security aspects of power politics and considered the balance of power as the ultimate mechanism to secure stability. IPE necessitates a shift, if not a change, in this preset perception, treating the economics as an equally significant factor. IPE reflects the dynamic and turbulent political and economic course of events after World War II. Throughout the Cold War, military and security issues were inevitably defmed as the "high politics" and played a crucial role. Needless to say, the economics, confined in the bounds of the "low politics," attracted considerably less attention. However, as the Cold War structure diversified and deteriorated, and as the Bretton Woods regime gradually lost its effectiveness in maintaining the economic coalition within the Western bloc, economic issues began to seem far more problematic than ever. Furthermore, with the collapse of the Soviet Union and the end of the Cold War, military and security issues ceased to receive the contemplation and cogitation that it had enjoyed. Instead, the economics came to assume more importance. Such issues as trade conflicts between nations, restructuring of the international economic order, and international competition involving industrial productivity and technological advancement came to present themselves as highly strategic. More to the point, these events elevated the economics to the realm of the "high politics." IPE has thus emanated as a viable and practical medium by which the international relations in the present can be effectively analyzed. As each state strives to increase its individual productivity and to nurture its high technology industries, interactions among nations do not and cannot only remain political but they also become economic. This