Webb: International Economic Structures, Government Interests and International Coordination of Macroeconomic Adjustment Policies

Webb, MC. 1991. International economic structures, government interests, and international coordination of macroeconomic adjustment policies. International Organization: 309-342.

How does increased capital mobility effect domestic macroeconomic policy coordination measures? "When different countries pursue different macroeconomic policies, it is likely that external payments imbalances, exchange rate movements, or both will result. A number of different types of policy could be used to reconcile national macroeconomic objectives with international constraints imposed by the resulting payments imbalances or exchange rate movements...Three categories of policies are relevant" (314).

External Policies: manipulation of trade and capital controls; Symptom Management: intervention in markets to control them through reserve spending, etc; Internal Policies: adjustment of domestic imbalances between savings and consumption through fiscal and monetary intervention.

See Table 4 (338) for an overview of how different policy coordination measures changed from the 60s to the 80s.

"This article demonstrates that international coordination of macroeconomic adjustment policies was at least as extensive in the 1980s as it had been in the 1960s. Because of changes in the structure o the international economy, however, there were shifts in the pattern of policy coordination: in the 1980s, payments financing coordination was less extensive, capital controls coordination was more extensive, exchange rate coordination was as extensively pursued...and, most important, monetary and fiscal policies became the focus of coordination efforts. The pattern of the 1980s reflects the fact that when international capital mobility is high, the plight of a country facing serious external imbalances can be resolved only by adjustments to monetary and fiscal policies-either those of its own government or those of the governments of other leading countries" (340).

Grabel: Averting Crisis?

Grabel, I. 2003. Averting crisis? Assessing measures to manage financial integration in emerging economies. Cambridge Journal of Economics 27, no. 3: 317-336.

Grabel highlights five distinct types of risk that are brought about when a country adopts neoliberal policy reforms. These are outlined in Table 1 (319) and are the following types of risk: currency, flight, fragility, contagion and sovereignty. Alternative policies are then outlined in Table 2 (322).

Abdelal: Writing the Rules of Global Finance

ABDELAL, R. 2006. Writing the Rules of Global Finance: France, Europe, and Capital Liberalization. Review of International Political Economy 13, no. 1: 1-27.

Capital controls and their promotion: Why was it true that capital controls formed the cornerstone of the monetary system after WWII but were sacrilegious in the late 90s? This paper attempts to tell that story. There is a difference between how US and European leaders presented the promotion of global capital. The Europeans wanted a more globally managed diffusion of finance while the US was much more keenly interested in an ad hoc approach. The standard story focuses on the role of the US in promoting international finance; this story focuses much more on the European players.

Wibbels and Arce: Globalization, Taxation, and Burden-Shifting in Latin America

Wibbels, E, and M Arce. 2003. Globalization, Taxation, and Burden-Shifting in Latin America. International Organization 57, no. 01: 111-136.

This paper explores the relationship of taxation policy in Latin America and the possible effects of globalization. "The question becomes: If capital flows and deregulation cause burden-shifting, are governments that reform tax systems rewarded with greater flows? We hypothesize that capital flows do respond to tax policy, but that markets evaluate tax systems as a whole, not just capital's burden of taxation"

The rosy assessment of tax policies that come out of Europe cannot be generalized to the rest of the world. Short-term capital needs require clear signals of country intention to be generated. This having been said, it is not entirely a dire situation for all developing countries, and there is still national room for movement and adjustment.

"In sum, globalization seems to bring a mixed bag for policymakers; it brings a broad set of constraints onto the outlines of policy but provides room for policy choices therein. The most direct evidence of this flexibility is the fact that longer-term markets seem to be less interested in the relative share of taxes paid by capital than in how market friendly tax systems are as a whole. While net capital flows have not rewarded shifts to increase the burden of taxation on labor, these flows have rewarded market-oriented reforms of tax systems. Thus, national policy-makers can attract capital by streamlining tax codes, eliminating distortionary taxes on trade, or increasing the efficiency of existing taxes, rather than contributing to ongoing trends in inequality by eliminating progressive components of tax codes" (131-2).

Iversen and Cusack: The Causes of Welfare State Expansion

Iversen, Torben, and Thomas Cusack. 2000. The Causes of Welfare State Expansion: Deindustrialization or Globalization? World Politics 52: 313-349.

"It is commonplace to argue that the increasing openness of national economies has meant growing economic insecurity. This insecurity once supposedly fueled demand for larger welfare spending as a form of insurance. The rising tide of globalization, however, is now widely seen as a hindrance to a government's ability to meet these demands and even as a cause of government cutbacks. An alternative view combines this 'second image reversed' with a concern for the political power of labor and the left. This revisionist perspective suggests that the challenges promoted by globalization when met by strong left-labor power within the domestic political system combine to produce a compensation strategy that entails a large and vibrant welfare state. This paper challenges both these views. Our argument, in short, is that most of the risks being generated in modern industrialized societies are the product of technologically induced structural transformations inside national labor markets. Increasing productivity, changing consumption patterns, and saturated demand for products from the traditional sectors of the economy are the main forces of change. It is these structural sources of risk that fuel demands for state compensation and risk sharing" (313).
The economic structure of employment has shifted dramatically. There is no longer such a strong focus on agriculture or industry, two sectors that previously were quite important. This paper contends that governments have responded to this change in three ways: 1| governments have promoted the movement towards jobs in service sectors and have compensated those who take this risk; 2| promote employment in public services; 3| have not promoted public or private opportunities and have promoted things like early retirement.

"The argument that globalization leads to welfare state expansion rests on two causal mechanisms. First, trade and capital market integration is said to expose domestic economies to greater real economic volatility, which implies higher income and employment risks for workers. Second, greater labor- market risks are hypothesized to generate political demands for expansionary spending policies that will cushion and compensate people for such risks" (317). This is strange, as international labor market risk may be a substantive reality, but the most important question is whether this international labor market risk is greater than the domestic labor market risk. The authors do not find increased labor market volatility in the countries explored during this period, thus brining previous analyses into question.

"Our results strongly suggest that deindustrialization, not trade or capital market openness, is the driving force behind the expansion of government spending on both transfers and services. Nevertheless, it could be objected that deindustrialization may itself be a consequence of trade and financial openness or that it was caused by, not causing, government spending" (339).

Avelino, Brown and Hunter: The Effects of Capital Mobility, Trade Openness, adn Democracy on Social Spending in Latin America

Avelino, G, DS Brown, and W Hunter. 2005. The Effects of Capital Mobility, Trade Openness, and Democracy on Social Spending in Latin America, 1980-1999. American Journal of Political Science 49, no. 3: 625-641.

"Empirical studies measuring the impact of globalization on social spending have appeared recently in leading journals. This study seeks to improve upon previous work by (1) employing a more sophisticated and comprehensive measure of financial openness; (2) using a more accurate measure of trade openness based on purchasing power parities; and (3) relying on social spending data that are more complete than those used by previous studies on Latin America. Our estimates suggest that several empirical patterns reported in previous work deserve a second look. We find that trade openness has a positive association with education and social security expenditures, that financial openness does not constrain government outlays for social programs, and that democracy has a strong positive association with social spending, particularly on items that bolster human capital formation" (625; abstract).

"Several empirical patterns emerge from our analysis. First, different measures of trade openness produce radically different results: previous empirical results based on exchange rate conversions are reversed when using a trade measure based on purchasing power parities (PPPs). Second, democracy has a strong and positive correlation with social spending. Third, financial openness does not constrain government spending on social programs. Finally, trade openness has a strong positive impact on the resources devoted to educational and social security while democracy's impact on spending results from increased expenditures for education" (625-6).

The DV they use is a combination of the % of population over 65, unemployment, the level of development, growth, urbanization, democracy, financial openness, trade openness, inflation all over gdp.

Key findings: "(1) democratic regimes spend more on social programs than do their authoritarian counterparts; (2) trade, as measured by purchasing power parities, tends to enhance rather than diminish social spending; and (3) financial openness has little systematic bearing on social spending"

"Trade openness (using PPPs) has a positive (though not always statically significant) impact on aggregate spending, and a strong positive and significant association with spending on social security and education" (637).

Feenstra and Hanson: Global Production Sharing and Rising Inequality

FEENSTRA, RC, and GH HANSON. 2001. Global Production Sharing and Rising Inequality: A Survey of Trade and Wages. NBER Working Paper.

"One of the most widely-discussed public policy issues in the United States and many other industrial countries is the decline in the wages of less-skilled workers during the 1980s and 1990s, both in real terms and relative to the wages of more-skilled workers. The question is, what factors account for this change?...In this survey, we present a contrary point of view, and argue that international trade is indeed an important explanation for the increase in the wage gap. Our argument rests on the idea that an increasing amount of international trade takes the form of trade in intermediate inputs. This is sometimes called 'production sharing' by the companies involved, or simply 'outsourcing'. Trade of this type affects labor demand in import-competing industries, but also affects labor demand in the industries using the inputs. For this reason, trade in intermediate inputs can have an impact on wages and employment that is much greater than for trade in final consumer goods. As we shall argue, trade in inputs has much the same impact on labor demand as does skill-biased technical change: both of these will shift demand away from low-skilled activities, while raising relative demand and wages of the higher skilled" (1-2).

From the late 70s to the mid 90s, real wages of those with a high school education fell by 13.4%.

Haggard and Maxfield: The Political Economy of Financial Internationalization in the Developing World

Haggard, S, and S Maxfield. 1999. The political economy of financial internationalization in the developing world. Issues and Agents in International Political Economy 50, no. 1: 35-68.

What about the internationalization of financial markets in less developing countries? For a very long time, financial markets were constrained through capital controls especially in less developing countries. These authors point out that this is transitioning and explore its effects. Table 1 (36) offers a taxonomy of different types of liberalization.

In an H-O model, K and L are substitutes, so, when K constraints are lifted, the relative cost of K decreases domestically. In a labor-rich environment, this benefits labor. However, this becomes more complex in a multi-sector model, where benefits may be distributed relatively unevenly. "In sum, increases in international trade and investment ties and the opportunities opened by the deepening of international financial markets should increase interest group pressures for financial internationalization, including from foreign firms, while decreasing the effectiveness of government controls. Yet such broad changes are more useful in explaining general trends than they are in accounting for why specific countries liberalize when they do. Crises play an important role in this regard" (40). There is a positive feedback look when there is a crisis after liberalization, as those who want more liberalization may benefit from the crisis and become more powerful.

"As the integration of financial markets deepens, accelerated by the very policy changes that we have analyzed here, international constraints will play an increasingly role in future policy decisions, not only with regard to the capital account but also with reference to economic policy more generally" (62).

Obstfeld and Taylor: Globalization and Capital Markets

Obstfeld, M, and AM Taylor. 2003. Globalization and capital markets. Globalization in historical perspective: 121-187.

Over the past 50 odd years, the rise of capital markets represent a fundamental shift in the way that global economic events impact the rest of the world. This piece wonders what relationship this increasing preeminence of global financial capital has on state autonomy.

There is clear benefit from increased capital flows from the perspective of economic theory. If, however, there is clear benefit for increased capital flows, why were they not imposed after WWII? "What explains the long stretch of high capital mobility that prevailed before 18914, the subsequent breakdown in the interwar period, and the very slow postwar reconstruction of the world financial system? The answer is tied up with one of the central and visible areas in which openness to the world capital market constrains government power: the choice of an exchange rate regime" (13).

"In most of the world's economies, the exchange rate is a key instrument, target, or indicator for monetary policy. An open capital market, however, deprives a country's government of the ability simultaneously to target its exchange rate and to use monetary policy in pursuit of other economic objectives" (14). Excellent overview of the unholy trinity on 14.

"Eventually, the very success of the Bretton Woods system in spurring international trade and the related capital movements brought about its own collapse by resurrecting the 'inconsistent trinity.' For the United States, maintaining fixed exchange rates seemed to require high interest rates and slower growth; for Germany, fixed exchange rates seemed to require giving up domestic control over inflation. Even the relatively limited capital mobility that existed by the early 1970s allowed furious speculative attacks on the major currencies. After vain attempts to restore fixed dollar exchange rates, the industrial countries moved to floating rates early in 1973" (17).

There is a discussion as to the implications of capital mobility on tax structures as well as income distribution.

Garrett and Lange: Political Responses to Interdependence

Garrett, G, and P Lange. 1991. Political Responses to Interdependence: What's" Left" for the Left? International Organization 45, no. 4: 539-564.

"One line of criticism is from scholars of international political economy. Many argue that in an era of great economic interdependence there is little scope for partisan governments to pursue distinctive and independent economic policies, even if these are desirable from the standpoint of domestic political competition. Instead, the trade openness of national economies, the integration of financial markets, the competitiveness of global markets in goods and services, and, more generally, the free flow economic resources across national frontiers in response to market forces all combine to create powerful constraints against autonomous national strategies. Furthermore, this policy convergence is often seen to center on reducing government intervention in the economy and on liberating market forces, thereby severely circumscribing...the prospects for distinctive leftist strategies" (539-40).

If one generally explores the different leftist parties of Europe, they will find that they all generally embrace market oriented solutions.

"This article argues, however, that while the effects of interdependence clearly have been great, they have not eliminated partisan economic separation between the left and the right. Ever-increasing integration of and competition in the world economy have heightened incentives for all governments to attempt to promote the competitiveness of national goods and services in world markets and to increase the speed and efficiency with which national producers adjust to changes in global markets. This, in turn, has altered the policy instruments through which governments can pursue their partisan objectives. It has not, however, rendered these objectives infeasible" (541).

Williamson: Globalization, Convergence and History

Williamson, JG. 1996. Globalization, convergence, and history. Journal of Economic History: 277-306.

From 1850 to the present, the author highlights three main stages of global growth from the perspective of convergence. "Thus history offers an unambiguous positive correlation between globalization and convergence. When the pre-World War I years are examined in detail, the correlation turns out to be causal: globalization played the critical role in contributing to convergence" (from abstract; 277).

What is the meaning of convergence? "The critical bottom line for me is whether the living standard gap between rich and poor countries falls over time. Convergence implies an erosion in this gap, at least in percentage terms. New growth theorists call this sigma-convergence. To get sigma-convergence poor countries must grow faster than rich, an event new growth theorists call beta-convergence" (279).

Ruggie: At Home Abroad, Abroad at Home

Ruggie, JG. 1995. At home abroad, abroad at home: international liberalisation and domestic stability in the new world economy. Millenium: Journal of International Studies 24, no. 3: 507.

Ruggie presents a brief argument about how Carr and Polanyi, though being polar opposite in much of their thought, agreed about the effect of self-regulating market solutions post WWII. This was termed by Ruggie to be the embedded liberal compromise, where states would protect their domestic policies from external shocks from the market, but would also pursue broadly liberal policies internationally. The success of this system, which promoted fixed exchange rates and autonomous monetary policy, eventually led to the rise of the movement of capital and floating exchange rates.

"In this article, I develop a provisional schematic formulation of this new world economy's key institutional features and consequences. I focus on three sets of issues in particular: the growing role of domestic domains as issues over contention in international economic policy; the denationalization of control over significant decisions regarding production, exchange, and employment; and the growing difficulty experienced by governments in living up to their part of the domestic social compact on which post-war liberalization has hinged" (508).

The Financial Times and the Economist both wrote in late 1990s about how, even while we were experiencing the most robust of capitalist situations, that the reality of welfare capitalism was still quite clear: "These two British publications are among the most irrepressible and articulate advocates anywhere of free markets and free trade. What, then, possessed them to worry about the economic security of workers and sustaining welfare capitalism, and, even more curiously, to suggest that governments have a role to play in achieving those objectives? The answer is surprisingly simple. Both realize that the extraordinary success of post-war international l liberalization has hinged on a domestic social compact between state and society. Both see that this social compact is everywhere fraying; and both fear that if it unravels altogether, so will international liberalization" (523).

"The new world economy that has emerged over the past few decades poses significant challenges to governments because it is disembedded in several key dimensions. The first is in its policy templates: the mental maps of spaces and structures within which policy-makers visualize the basic contours of their world...The second, related source of disembeddedness is the world of policy-making itself. International as well as domestic economic policy targets are increasingly elusive because instrumentalities are no longer as effective. This loss of efficacy, in turn, reflects the fact that the theoretical, conceptual, and statistical bases of policy too often still reflect previous policy templates and the cause-effect relations that pertained in that earlier world. Last, the new world economy is increasingly disembedded from the domestic social compact between state and society on which the political viability of the post-war international economic order has hinged. Policy attitudes towards the new world economy have shifted in the direction of neoliberalism to an extent that is beginning to be of concern even to staunch guardians of market orthodoxies in the leading financial journals of Britain and the United States" (525).

"Constructing a contemporary analogue to the embedded liberalism compromise will be a Herculean task" (525).

Cao: Convergence, Divergence, and Networks in the Age of Globalization

Cao, X. 2006. Convergence, Divergence, and Networks in the Age of Globalization: A Social Network Analysis Approach to IPE.

"Convergence denotes a process wherein distinctive domestic institutions and economic policies fade away over time, giving away to common economic structures whose efficiency and universality produce super strength in the market...Divergence, on the other hand, refers to persistent and maybe increasing diversity of national policies and institutions among which the efficiency-mandated minimalism is only one of the many varieties" (1).

"Empirical studies following this fashion unsuprisingly leave us with confusion by revealing a mixed picture of convergence-divergence caused by economic forces of globalization...We still have to ask why and how convergence has happened in some countries, in some policy areas (but to different extents), but not others?" (2).

The author explores the convergence-divergence debate by exploring the relationship different countries have with regard to the international system; how are different countries engaged with the global system?

"The empirical findings indicate that proximity in IGO [inter-governmental organizations; number of shared memberships, closer countries are in the 'web' of inter-governmental connections (12)] networks ahs the most consistent converging effect on domestic economic policies. We also find that network position similarly induces convergence through the network of transnational portfolio investment. Trade, the most intensively studied network in international political economy, has no consistent effects on convergence in domestic economic policies. Given the fact that most of the works on convergence-divergence to date use some measure of trade exposure to capture the extent a country is subject to the pressure of globalization, the finding of this research on trade reminds us that the research in this area might have to target some new sources of globalization pressure" (22).

Krugman: Pop Internationalism

Krugman, PR. 1996. Pop internationalism. Mit Press.

Written in the mid 90s, this slight text responds to a mountain of literature that paints globalization out to be an area of zero-sum competition between states who look more like companies than nations. Krugman presents a standard liberal account for the lack of substantial growth in real wages since the 70s (slower growth in production) and trade theories of comparative advantage to explain how international trade is an arena of overall gains, and not gains that can best be analogized with military battles, etc.

Rodrik: One Economics-Many Recipes

Rodrik, D. 2007. One economics-Many recipes. Globalization, institutions, and economic growth. Princeton University Press.

Why do some countries grow faster than other countries? One must look at national politics to understand the diverse causes of growth. Countries that are able to harness the power of globalization are those that are likely to grow the most effectively.

"First, this book is strictly grounded in neoclassical economic analysis. At the core of neoclassical economics lies the following methodological predisposition: social phenomena can best be understood by considering them to be an aggregation of purposeful behavior by individuals...interacting with each other and acting under the constraints that their environment imposes" (3).

The book then explores three major issues: economic growth, institutions and globalization. The first two were not of great interest to me.

"On the plus side, the global expansion of markets promises greater prosperity through the channels of division of labor and specialization according to comparative advantage...But globalization also undercuts the ability of nation-states to erect regulatory and redistributive institutions, and does so at the same time that it increases the premium on solid national institutions" (196).

Globalization: Rodrik posits a trilemma for globalization. In this world, there are three possibilities for the future of globalization that rely on the interaction of three different variables, only two of which can be a reality at the same time. The three variables are the following: integrated national economies, the nation state or mass politics. If the world is made up of integrated national economies and mass politics, a kind of global federalism emerges. If the world is made up of integrated national economies and the nation state, the Friedman golden-straightjacket will be imposed. If the world is comprised of nations and mass politics, then a world described as the Bretton Woods compromise (ala no capital mobility, monetary policy autonomy and fixed exchange rates) will emerge.

"...I suggest two different paths, one appropriate for the short to medium term, and the other for the long term. The first path consists of re-creating the Bretton Woods compromise: under this scenario, we would accept the continued centrality of the nation-state, and therefore combine international rules and standards with built-in opt-out schemes...The long-term path is one of global federalism: since this scenario obviously lies far in the future, it allows our imagination to run freely" (204-5).

Shiller: Irrational Exuberance

Shiller, RJ. 2006. Irrational exuberance. Princeton University Press.

"How we value the stock market now and in the future influences major economic and social policy decisions that affect not only investors but also society at large, even the world. If we exaggerate the present and future value of the stock market, then as a society we may invest too much in business startups and expansions, and too little in infrastructure, education, and other forms of human capital. If we think the market is worth more than it really8 is, we may become complacent in funding our pension plans, in maintaining our savings rate, in legislating an improved Social Security system, and in providing other forms of social insurance" (xii).

The author presents a wide variety of evidence to show that the stock market is currently overvalued by historical standards. Part of the argument is that the investors who are part of the stock system to not understand the constructed nature of markets, and that their growth does not necessarily represent the underlying value of assets. Human psychology plays a clear role in determining stock prices, and the author makes the claim that investment has become irrational and exuberant.

The book goes through a wide variety of explanations for the causes of this excessive investment in equities.

Woods: The Globalizers: The IMF, The World Bank, and Their Borrowers

Woods, N. 2006. The Globalizers: The IMF, The World Bank, And Their Borrowers. Cornell University Press.

"The IMF and World Bank are targets of endless criticism. Left-wing groups denounce them as tools of US imperialism. Antiglobalization websites accuse them of enforcing global capitalism. Right0wing think tanks accuse the Fund and Bank of supporting corrupt elites and governments that cripple their economies, maul their environments, and oppress their people. In 20045 it was revealed that even the terrorist group Al Qaeda may have planned an attack on the institutions" (1).

There are three reasons that these IOs do not successfully carry out their ostensibly noble mandates: Firstly, they do not stand in isolation and are influenced by powerful governments; secondly, the technocrats who make up these institutions are shaped by a certain kind of institutional milieu which goes on to shape the ethos of the institution; finally, they have to contend with the governments that they work with on a level of equality, and they cannot impose their will. These all lead to obvious problems. The author refers to this with the chapter sub title "Riding Three Horses at Once".

"There is no incontrovertible evidence that the IMF and World Bank know what is good for their borrowing countries. More important, there is even less evidence that what they know translates into what they require of governments. Overall, powerful states set the boundaries within which the IMF and World Bank work. Within those parameters, professional economists and staff draw up the details. They work with an eye on the political masters of the institutions and equally with a view to promulgating their own and institutions interests. They express their solutions in the language of professional economists. Once solutions are defined, staff take their mission into the field. There they must coerce or persuade borrowing governments to undertake prescribed measures. Their influence in the short term depends on local conditions and whether politicians have an interest in using Fund or Bank resources or conditionality to bolster a particular position or policy" (6).

Strange: Mad Money

Strange, S. 1998. Mad Money. Manchester University Press.

This is a wide ranging tale of financial markets gone wild. States no longer have the power, capabilities and/or will to control the forces of free flowing capital. The causes of this crisis, while being decisions made by actors, are generally seen as being deterministic. The solution to the problem requires swift and bold action.

Written after the SE Asian crisis of '97, this book contains much that should be considered in today's economic climate, and much that remains hyperbole.

The book begins by explaining why the author understands the current organization of the financial system to be "mad". One moment it is manic, the other it is depressed. The output of the system is, in effect, insane.

The themes of Casino Capitalism are explored: volatility; we're all "involuntary gamblers"; arose from 5 decisions that really weren't decisions.

Markets have outgrown the constraints of government. This is not the only problem that has become too large, complicated or forceful to move beyond the capacity of states to regulate (environment, technology, etc).

All areas of the economy move to the rhythm of finance. States have much less control over finance than they had previously. Financial concentration is increasingly a problematic reality. Excess leads to "moral contamination" (181). There are widening gaps (income gaps, gaps between large and small business, between large and small states).

Kirshner: Currency and Coercion in the Twenty-First Century

KIRSHNER, J. 2005. Currency and Coercion in the Twenty-First Century.

Much of the work done on monetary issues and power has focused on the periods between WWI and 1989. This work has a different, much more current, focus. "In the early twenty-first century, however, two conditions, less salient during those seventy-five years, are of dramatically increased significance: globalization and uni-polarity...The goals of this chapter are to illustrate the continued role of monetary power and to assess the nature of this transformation" (from abstract).

"This paper argues that although the consequences of globalized finance are profound, those consequences recast rather than reduce the significance of monetary diplomacy in contemporary international relations. By shifting the analysis from an almost exclusive focus on state-to-state interactions to one that places much greater emphasis on the relationship between states and markets, it can be illustrated that even in an era of globalization international monetary relations remain an area of political competition. As long as there are states and money, states will attempt to manipulate monetary relations to advance their political objectives" (1).

The three independent variables that were explored in Kirshner's Currency and Coercion book are also explored: the effect of globalization on 1) currency manipulation; 2) monetary dependence; and 3) strategic disruption.

Currency manipulation: a very interesting story of manipulation of the Dinar is told. "As illustrated by the events described above, there is good reason to believe that currency manipulation will continue to be a feature of International Relations under globalization" (6).

Monetary Dependence: There is arguably even greater competition among states to become a central currency within the global order after unipolarity.

Strategic Disruption: This still exists. See the US' insistence that all states reduce capital controls. Once again, this does not take the same form as in the pre 1990 world of bipolarity.

"In sum, the contemporary international system is characterized by globalization and unipolarity. Financial globalization in particular recasts the nature of monetary power and the practice of monetary diplomacy. But it does not provide an escape from politics-even under globalization, international relations will continue to feature currency manipulation, monetary dependence, and strategic disruption. As long as there are states and currencies, the monetary system will remain an arena of political conflict" (17).

Ruggie: Taking Embedded Liberalism Global: The Corporate Connection

Ruggie, JG. 2002. Taking Embedded Liberalism Global the Corporate Connection. John F. Kennedy School of Government, Harvard University.

Ruggie traces a bit of history regarding embedded liberalism. The core: "...economic liberalization was embedded in social community" (1).

The problem of this new world is that governments are overwhelmed by the size and scope of global capitalism. It is nigh impossible to construct a similar pact with governments as was organized through the Bretton Woods conference. "Embedding the global market within shared social values and institutional practices represents a task of historic magnitude. The reason is obvious: there is no government at the global level to act on behalf of the common good, as there is at the national level. And international institutions are far too weak to fully compensate. Accordingly, this chapter examines the role of certain social processes and movements in triggering the emergence of more inclusive forms of global governance. Specifically, I focus on the contribution of the dynamic interplay between civil society, business and the public sector of the issue of corporate social responsibility" (2-3).

"The burden of my argument, with due appreciation for the irony, is that the corporate sector, which has done more than any other to create the growing gaps between global economy and national communities, is being pulled into playing a key bridging role between them. In this process, a global public domain is emerging, which cannot substitute for effective action by states but may help produce it" (3).

"When we reflect on how hard it was and how long it took to institute the original embedded liberalism compromise at the national level, the prospect of achieving a similar social framing of global market forces seems exponentially more daunting" (27).

"I have argued that, as a result of the expansion of civil society and its engagement with the corporate sector, a global public domain is emerging. I take that to mean an area inhabited by various actors for whom the territorial state is not the cardinal organizing principle..." (28).

"Haltingly anbd erratically, something akin to an embedded liberalism compromise is being pulled and pushed into the global arena, and the corporate connection is a key element in that process" (29).