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491. Der kollektive "Buddenbrooks-Effekt"

Author:
Christoph Deutschmann
Publication Date:
05-2008
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
The paper views the current financial crisis in light of long-term structural socioeconomic changes in advanced industrial societies. In Western Europe, the United States and Japan, the period of economic prosperity after the Second World War led to a remarkable accumulation of wealth among the middle class that had surprisingly little effect on the substantial fortunes of the wealthiest upper class. This affluence gave rise to pension and investment funds emerging as a new type of collective actor in global financial markets, while the economy was marked by increasing instability, declining growth rates and financial crises. The paper tries to clarify the interconnections between these phenomena using the framework of a multilevel analysis that culminates in a model I call the “collective Buddenbrooks effect” (“Buddenbrooks” being a family saga by Thomas Mann): Structural upward social mobility will lead to an increasing imbalance in capital markets, since the volume of financial assets looking for profitable investment will rise as the social reservoir of solvent debtors and promising investment opportunities decline. Advanced industrial economies are thus characterized by a bias towards capital export and excessive financial liquidity, with the well-known consequences of low economic growth rates and the danger of speculative bubbles on global capital markets. The middle class that originally benefitted from postwar prosperity is negatively affected, too. I argue that the current crisis cannot be understood sufficiently without taking this structural socioeconomic background into account.
Topic:
Economics, International Political Economy, International Trade and Finance, Political Economy, and Political Theory
Political Geography:
United States, Japan, and Europe

492. Economic Sociology and Political Economy: A Programmatic Perspective

Author:
Jens Beckert and Wolfgang Streeck
Publication Date:
04-2008
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
The paper presents some of the ideas underlying the current research program of the Max Planck Institute for the Study of Societies (MPIfG). It begins with a discussion of how the institute's programmatic orientation has evolved since it was founded in 1984. Programmatic change over the years involved (1) recognition of a secular decline in the capacity of the nation-state to organize and guarantee social order, and of the growing significance of self-regulating, “free” national and international markets for social life; (2) increased attention to issues of meaning and to “culture” and cultural symbolism, as well as to normative questions; (3) a gradual shift in emphasis from policy to politics; and (4) more explicit recognition of history and of the historicity of the questions posed and the observations analyzed in social science. The second part of the paper argues that Gesellschaftsforschung today is most appropriately conceived as the study of the economy and society of contemporary capitalism. It is suggested that the most promising approach is close cooperation between the scholarly traditions of political economy and economic sociology, with the former standing to benefit from a more explicit micro-foundation in a sociological theory of action and the latter from more systematic consideration of politics and the state. Third, the paper shows how the approach that has evolved at the MPIfG differs from mainstream economic sociology, from the so-called new institutional economics, and from behavioral economics. The paper concludes by enumerating four subject areas that are likely to be of particular importance for research at the MPIfG: (1) the nature of rational-economic action, (2) the constitution of markets, (3) the emergence and change of institutions, and (4) the relationship between capitalism and democracy.
Topic:
Economics, International Political Economy, Political Economy, and Political Theory

493. Industrial Relations Today: Reining in Flexibility

Author:
Wolfgang Streeck
Publication Date:
03-2008
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
The paper was presented as a keynote lecture at the 10th anniversary of the Amsterdam Institute for Advanced Labour Studies (AIAS) in April 2008. It surveys the trajectory of scholarly work on labor after 1945, from its initial emphasis on rights of industrial and social citizenship to its present preoccupation with “flexibility” and “flexicurity”. It recalls the dissolution of the “Fordist” compromise in the 1970s and the subsequent gradual expansion of markets as the dominant mechanism for the allocation of life chances and the governance of society. Marketization encountered surprisingly little resistance, in real life as in the evolving conceptual apparatus of scholarly work. Liberalization proceeded and continues to proceed regardless of the social dislocations it causes, on a scale wholly unimaginable and indeed unacceptable under the postwar settlement. The paper ends with speculation on what if at all might be the forces today that could trigger a Polanyian counter-movement to the progress of capitalist social and economic relations. In particular it discusses whether demographic change, in terms of both a declining birth rate and increasing life expectancy, might bring about a new wave of market-containing social policy.
Topic:
International Political Economy, International Trade and Finance, Markets, Political Economy, and Political Theory

494. States and Rules, Norms and Interests

Author:
Ian Hurd
Publication Date:
11-2008
Content Type:
Working Paper
Institution:
Centre for International Peace and Security Studies
Abstract:
The conventional separation in IR theory between instrumental behavior and legitimated norms as explanations for state action has discouraged the study of phenomena that include both. As a result important practices including hypocrisy, norm violation, and the strategic reinterpretation of rules and laws are under-examined. The source of the problem is the idea of 'internalization' of external rules and norms, which has come to define the distinction between rationalism and constructivism in IR, and between the logics of appropriateness and of consequences. I argue that internalization is problematic for empirical research in IR because it eliminates the possibility of strategic thinking by states in relation to international norms and rules. It leaves no room for instrumentalism around norms and so cannot account for norm violation, the strategic manipulation of norms, and the productive process of norm innovation. This is a problem equally for rationalism and constructivism. I argue for an alternative model that focuses on the practice of invoking international norms and rules and show that this approach allows new insight into the agent-structure problem, the relation between states and rules in world politics, and the relation between rationalism and constructivism.
Topic:
International Relations, International Political Economy, Sovereignty, and Political Theory

495. Globalization and Global Governance in the 21st Century

Author:
Jeffrey Hart and Joan Edelman Spero
Publication Date:
01-2008
Content Type:
Working Paper
Institution:
Centre for International Peace and Security Studies
Abstract:
An examination of international economic relations in the six decades since World War II reveals many ways in which political factors have shaped economic outcomes. The postwar security system significantly affected the postwar economic system. The creation of a bipolar security system following the outbreak of the Cold War led to the separation of the Eastern and Western economic systems and provided a basis for the dominant role of the United States in the Western system and of the Soviet Union in the Eastern system. The end of the Cold War led in turn to the end of the East-West economic divide and to the integration of the formerly Communist countries and China into the global capitalist economy.
Topic:
Cold War, Globalization, Government, International Cooperation, International Political Economy, International Security, and International Affairs
Political Geography:
United States and China

496. East Asian regionalism: Much ado about nothing?

Author:
John Ravenhill
Publication Date:
12-2008
Content Type:
Working Paper
Institution:
Australian National University Department of International Relations
Abstract:
In the decade since the financial crises, East Asia has become the most active site in the world for the negotiation of preferential trade agreements. Region-wide functional collaboration now goes substantially beyond trade, however, ranging across such areas as financial cooperation, disaster management, transborder crime, tourism, energy and environmental issues.
Topic:
International Relations, International Political Economy, International Trade and Finance, Regional Cooperation, and Treaties and Agreements
Political Geography:
Israel and Asia

497. Raymond Aron and the morality of realism

Author:
MURIELLE COZETTE
Publication Date:
12-2008
Content Type:
Working Paper
Institution:
Australian National University Department of International Relations
Abstract:
The realism school of thought in international relations is often accused of presenting politics as an autonomous sphere which does or should exclude ethical considerations, and of providing a tragic vision of politics which precludes any belief in progress. These accusations are particularly misplaced when applied to Raymond Aron, a leading classical realist whose insights are rarely investigated in the discipline. The article challenges the perception of Aron as a 'mainstream' classical realist and emphasises the distinctiveness of his formulation of realism by focusing on his views on ethics, politics and progress. It demonstrates that Aron promotes a 'morality of wisdom' which gives a central place to the defence of values alongside considerations of power. He also provides a definition of survival which stresses the importance of shared values for the existence of political communities, and consequently the need to uphold them even though ethical perfection cannot be achieved in the political sphere. Aron's ideas are finally underpinned by Kantian elements. Advocating not so much faith in a determined future, but rather hope sustained by reason, his realism provides a middle ground between moralism and cynicism. Aron therefore provides a very distinctive European version of realism which demonstrates the richness of realist arguments upon morality, politics and progress.
Topic:
International Relations, Government, International Political Economy, Politics, and Political Theory

498. Multilateralism Beyond Doha

Author:
Arvind Subramanian and Aaditya Mattoo
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
There is a fundamental shift taking place in the world economy to which the multilateral trading system has failed to adapt. The Doha process focused on issues of limited significance while the burning issues of the day were not even on the negotiating agenda. The paper advances five propositions: the traditional negotiating dynamic, driven by private sector interests largely in the rich countries, is running out of steam; the world economy is moving broadly from conditions of relative abundance to relative scarcity, and so economic security has become a paramount concern for consumers, workers, and ordinary citizens; international economic integration can contribute to enhanced security; addressing these new concerns–relating to food, energy and economic security-requires a wider agenda of multilateral cooperation, involving not just the WTO but other multilateral institutions; and despite shifts in economic power across countries, the commonality of interests and scope for give-and-take on these new issues make multilateral cooperation worth attempting.
Topic:
International Relations, Economics, Globalization, International Political Economy, International Trade and Finance, Markets, and Privatization
Political Geography:
Middle East

499. Thought for Food: The Challenges of Coping with Soaring Food Prices

Author:
Nora Lustig
Publication Date:
11-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
World food commodities prices increased 130 percent from January 2002 to July 2008. Individual agricultural commodities show even more pronounced increases: corn, wheat, rice and soybeans rose by 190, 162, 318 and 246 percent, respectively. Since July, food commodities prices began to fall. While this decline comes as a relief, prices are likely to stay high in the foreseeable future. Available evidence suggests that the decline in living standards of net consumers caused by higher food prices outweighs the benefits accruing to poor net sellers in the majority of countries that have been analyzed so far. The time to implement measures to help the poor net consumers cope with higher food prices is now. However, too many developing countries lack the instruments, administrative capacity and fiscal space to implement safety nets fast enough and in the required scale. This is one of the most pressing policy challenges that we face. For the poor who are net sellers, governments should seize the opportunity to convert the short-run windfall into longer-term gains. Multilateral financial institutions can play a key role in providing financial resources to countries facing negative terms of trade shocks, technical assistance in the design of safety nets and resources to add fiscal space to countries to fund safety net programs. International organizations can also help countries design the appropriate macroeconomic policy response. This will call for greater flexibility in the menu of policy options traditionally deployed by the Bretton Woods institutions.
Topic:
Security, Agriculture, International Political Economy, International Trade and Finance, Markets, and Poverty

500. Rainfall Shocks, Markets, and Food Crises: Evidence from the Sahel

Author:
Jenny C. Aker
Publication Date:
12-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
How do markets respond to extreme rainfall in West Africa? This paper examines the effect of weather on grain market performance in Niger, a country increasingly affected by drought and severe food crises over the past two decades. Using a dataset that combines information on rainfall, agricultural production, prices and transaction costs, I exploit rainfall variation to estimate the impact of drought on grain market performance between 1997 and 2006. Time series tests suggest that grain markets in Niger respond to supply shocks and that markets are more integrated during drought years. Exploiting the exogeneity of extreme rainfall in a difference-in-differences framework supports these findings: drought reduces grain price dispersion across markets. This impact is stronger as a higher percentage of markets are affected by drought, as was the case in 2004/2005, the year of a severe food crisis. The results suggest that early warning systems in West Africa should focus on the spatial impact of drought at the sub-regional level, as well as monitor prices in key forecasting markets during the harvest period.
Topic:
Agriculture, International Political Economy, and Markets
Political Geography:
Africa and Nigeria