Global Integration,

backlashes and
political responses

International Political Economy

Week 14: December 5, 2023, Group 58
Prof. Işık Özel
 Some BIG questions 2/22

1. Globalization and political repercussions

2. Digitalization and its impact on global
integration and the international order
3. Should we be concerned about the future of
globalization?
4. And the ‘liberal’ international order?
 Globalization & political repercussions
Polarization & populism 3/22

… According to Rodrik, it is about demand and supply

•Economic anxiety &

distributive conflicts
DEMAND •solid base
•yet, no direction Direction
&
Content of
populism
•Narratives offered by the
SUPPLY populist leaders
 Is it a new phenomenon?
4/22

Populist Party, US
‘Real people’s’ suffering, while the
elites enjoy prosperity
1892

A coalition of farmers and miners

against the domination of financial
sector
Monopolies = Evil
Wealth = Unequally distributed
Laissez faire = Bankrupt ideology
Individuals = Commodities
2020
 Institutions and politics
5/22

Domestic
Welfare state and its shades
institutions and
Yet, ¿can it be sustained?
their role to depends on
mitigate the risks of • State capacity
global integration • Political will
 Is it only about economic factors?
Other determinants of populism? 6/22

• Alternative explanations for the resurgence of

populisms?

• Do non-economic factors matter?

• Social and cultural elements

• Inglehart & Norris (2016)

• Subjective perception regarding social status

• Gidron & Hall (2017)
 LET’s remember the adverse
consequences of global integration 7/22

Digital revolution
(Mansfield & Rudra)

Technological Backlashes of
change Global globalization
integration

Why does it matter? Distributive Consequences

(Rodrik, 2018)
State capacity
National
Political actors
e. g. Populism

(Mansfield y Rudra 2021) Political

repercussions
National & international
interaction
e.g. End of the ‘embedded
liberalism’
 Digital revolution and end of ‘embedded
8/22
liberalism’ (Mansfield and Rudra)

• Bretton Woods & multilateralism

• ‘Embedded liberalism’ (Ruggie’s concept)
• The postwar consensus

domestic stability (full

open international trade employment), protecting the ‘losers’
regime maintained (i.e., social safety nets) labor &
by multilateralism welfare policies

The GATT State’s

and the visible
states
hand
Challenges of Embedded Liberalism
in the age of Global Digital Interdependence
(according to Mansfield and Rudra)

• Distributional consequences
• 1. Pressure on lower-skilled labor in
advanced countries
• Skill premiums’ rise
• 2. Difficulty of taxing and regulating capital
• 3. Difficulty of maintaining high labor
standards

• Well, so what? Why should we care?

 ‘Embedded liberalism’
Postwar economic order
• Multilateralism
International • Recovered belief in the benefits
of freeR trade
level
• Yet, limited capital flows
Keynesian Embedded
compromise liberalism
• fear of unfettered markets
Domestic • State Interventionism &
Keynesianism-varying degrees
level
• Social safety nets
«The Bretton Woods trio»:
central actors of the postwar liberal order
 Establishment & evolution
 Principles & rules
 Rounds &negotiations

 Deepening & widening

 DSB & institutionalization

 how power is displayed in
its operation

 Issues, contestations,
conflicts

 Fragmentation

 Deadlocks
Call for a major reform of postwar
institutions
• a review & redefinition of the BW institutions.
• Mia Mottley, PM of Barbados,
• ‘the agreement that gave rise to the WB and the IMF “no longer
serv[ing] the purpose in the 21st cc that they served in the 20th cc’

• Kristalena Georgieva of ?
• Not responding to these calls will ‘undermine the credibility of the IMF,
our ability to serve our members.’
• High cost of failing to review the IMF quota, failing to admit civil society
organizations
Global financial crisis Climate International
crisis organizations
Geopolitical rivalry
legitimacy crisis
Supply-chain crisis
de-industrialization
Re-legitimation of
the state’s visible hand

INDUSTRIAL
POLICY BACK IN
TOWN AGAIN