INTERNATIONAL POLITICAL ECONOMY

: Prof. Bryan Ortiz

1945-1989

Developed countries/1st world

Ÿ US
Ÿ Great Britain

2nd World Countries

: Industrial world (economy)
: Communist countries back down in 1989
Ÿ Soviet Union
Ÿ North Korea
Ÿ Cuba

3rd World Countries (global sun > scholars)

: non alligned countries
:independent from colonial rule
Ÿ countries near the equator
Ÿ sri lanka
Ÿ bangladesh
Ÿ middle east

20th Century
United States of America
: excercise hegemony (4 Tier Apparatus)
1. military
2. diplomatic
3. economic
 4. clandestine

1953 - Iran Mosadec

Ÿ oil sector (depend)
Ÿ oil deposit (control by transnational country)
Ÿ oil operation became nationalized (prime
minister)
Ÿ totalitarian rule
Ÿ 1979 islamic revolution
Ÿ Semi theocratic

Ÿ Real power - Ayatolla

Ÿ Islamic Activity

Salvador Aliente (1973)

Ÿ Coup de etat
Ÿ American CIA support

PATH TO PROGRESS
3RD WORLD TO DEVELOPED COUNTRIES

1. Modernization Theory (UNIVERSAL????)

Ÿ Form a government same to the Western
countries
Ÿ Adopt their institutions etc..
Ÿ Democratic Country
*India (United Kingdom in 1947) and
Philippines (United States)*
--Adopt the system of the western countries
--India regularly have their elections
--Heavy industries (Industrial Economy),
manufacture,
 technological know how
--Poverty
> Philippines adopted US government
>

2. Marxian Approach
Ÿ Karl Marx
Ÿ Society have the inherent capacity to be
productive
Ÿ Productivity enables them to be Wealthy
Ÿ The wealth generated are being appropriated
by few groups of people
Ÿ No equal Distribution of wealth = Social and
Economic Inequality
Ÿ = Class Struggle= Social Revolution

Similar Consciousness

Countries experimented with Communism

+Russia (1992 Soviet Union) - Industrialized,
Investement in Research, First Space Explorer
(Yuri Gagarin)
-Did not built a government that can match the
US and Western Countries
-1980
+Eastern Europe - Famine
+Mainland China (1948) - Great Lift Forward =
Persecuted, Land Reform, Cultural Revolution
+North Korea (late 40s )
+Cuba (1959)
 Communist Society : Fair (help - need)
Ÿ Means of production would be collectively
owned by all
Ÿ Owned and supervised by State by named to
the people
Ÿ Prolitariath (working class) are dominant than
other classes

3. Dependency Theory (Global South and

Latin America)
Ÿ World/Countries can be divided into 2

1. CORE COUNTRIES (US, France, Canada) -

manufacturing
2. PERI TERI peripheral COUNTRIES - supply of

raw materials
Ÿ Developing countries as a producer for the

core countries.
Ÿ Peri Teri adopt Industrial (import style of

industrialization)
>Argentina
>Brazil- aerospace (commercial and military -
embrayel), developed biofuel, car
manufacturing hub. LIMITATION- car
manufacturing via volkswagen, ford and etc.,
Fabella means SLUM AREAS
>Mexico
late 40s ISI Mode of Industrialization
-After 19th century up until now, the United
States is economic power is declining
-Some developing countries created global
competitive companies (East Asian Region)
can catch up to the rich countries <known as
INDUSTRIALIZED COUNTIES>
1. Japan 19th Cent -
2. South Korea
3. Taiwan
4. Singapore
5. China
-Vast developing countries remain in poverty

ISI vs EOI
ISI - country manufactured then the market
is the country also
: own country to own country
EOI - manufactured in a country but the
market should be exported
: own country to global market
 August 18, 2023

20th century
Ÿ Newly independent
Ÿ Starting 19th cent until first half of 20th -
dominated by western countries (UK ,
Germanu, France, US)
Ÿ 1898 US able to dislodge the Spaniards in the
Phil. And other remaing countries like Cuba.
Ÿ Britain and France (vast colonies) / US able to
build ub its industrial might
Ÿ Allied Side (France and Britain) - victory that
cannot be contested, they needed the alliance
of US in 1870 against Axis Power.

Right to Self Determination - ethno linguistic

Ÿ Poland
Ÿ Hungary
Ÿ Romany
Ÿ Bulgaria
- People from colonized territory demanded
the same to those in Romania, Hungary and
etc. HENCE they are ignored because of their
lack of knowledge
- Colonezed people still struggle until they
finally got what they needed
-They transintioned to Newly Independent
Nation States
Ÿ India 1947

Ÿ Philippines

Ÿ Africa, Ghanna to Senegal Late 50s

Ÿ Algeria 1960s

They are independent but in reality they cannot

live with
 theirselves

Fates of the Global South/3rd World

Ÿ Some latin american countries like Brazil
suceeded in Industrialization yet there is a big
gap between elite and those who are still
hungered by poverty
Ÿ Indians had their own automobile industries,
competitive software industries, technological
know how (space crafts in moon). 2014, space
craft to moon. But despite their
accomplishments, many are still in poverty
Ÿ Africa, several not even able to build up their
basic industries.

BUT
Ÿ The Republic of Korea in 50s up until 60s, their
gdp is lower than the Philippines
Ÿ Singapore
Ÿ Late 70s mainland China catching up, High
Speed Rail Network. 350 k/ph high speed train.

Ÿ In the past, the share of the western countries

in the global economy was disproportionately
imbalance.
Ÿ 40% US in 1960. In 2017, 15% share of the US
 in global economy.
Ÿ China - cement

Ÿ Social Scientists and other social scientists

must
 develope another theory that can explain the
phenomenon.
Ÿ 1980s Role played by the state in in managing
in the state to have an effective societal
transformation.

Max Weber' Theory

- German Social Scientist during the late 15th
century until the early decades of 19th century
(1920)
- For him, State is a set of organizations that
has the authority to make binding decision
using force if necessary.
- The state is in the unique position, because in
an ideal setting the state possess the
monopoly in the use of force. It has the power
to make decision binding the people under its
jurisdiction. Inside the territory of the state, the
latter have the capabilities and the rights to
make laws, policies, regulations and such and
that the people living in there has the obligation
to follow it. The state have military and police
to ceompel the people to follow the rule of the
state. In an ideal setting, only the stare can
do that.
- If the state is weak, the state cannot easily
impose its will to the people. (There are several
societal groups that are able to defy the state.
This are powerful anought to defy the state,
and the state does not have the capacity to
fought against the defial of the groups) Social
groups are organization, associations, groups
and etc that are built outside the state.
- Scientists like Migtal, Evans and
Rueschemeyer that if the state is strong over
the objections of the different groups or forces,
then that states has the capability to enforce its
will; otherwise the state becomes weak.
 - Weak states (African counties, Latin America,
Some in Asia) on the other hand in the
NorthEast Asian Region, are relatively strong.
(STRONG STATE IS A NECESSARY
CONDITION YET IT IS NOT SUFFICIENT)

Ÿ If you want to grow your economy, you need a

states interventions because:
1. Solving coordination problems in the
growth process.
2. Failures in capital markets. - State can build
companies or state owned and controlled
corporations.
3. Promotion of technology, development of
indegenous capabilities, and learning - the
state can do technological diffusion
Ÿ State (LAW AND ORDER) is handsoff,

market forces work for themselves; private

sector to decide.
Ÿ Economic activities held inside the states

should be engrusted to the market forces.

Rule of Supply and Demand.
Ÿ FOCUS ON COMPARATIVE
ADVANTAGES

States should have these:

1. Corporate Coherence - shared set of goals,
expectation, beliefs, common goals
2. Meritocratic Recruitment System - Inside the
states are those have competence, know how,
and expretise to to what they needed to do.
You are hired on the basis of your merit or
competence
3. Unambiguous Location of Decision Making
- Planning and excuting regulation it should be
clear who lead.
4. Insulation from Social Pressure - State when
making one policy or regukation it should not
be pressured by the dictate of the vested
interests.

Max Weber belong to a school of economic

thought (Renaissance)

Industrial Revolution - Britain (most

powerful)