POLICY AND POLITICS
INTERNATIONAL POLITICAL ECONOMY

CD10 Outline                                                                           Course Structure Index

Goals

The goal of this course is to enable students to analyze the interaction of political and economic influences in the development of policies affecting international trade and investment, and to apply that knowledge in the formulation of strategies designed to advance a country's or a firm's trade policy interests. Students will learn how to evaluate the complex interactions among and between governments and firms that characterize international economic relations in the 1 990s, and develop an improved ability to identify the critical policy elements that affect the international competitive position of national industries.

Topics Covered

This course will be organized around a series of questions. What is the role of states in the global economic competition? Are multinational firms free actors in the global economy? In what ways to they depend on the host countries in which they invest their "global" operations? What can states do to attract foreign direct investment? To what extent and in what ways can multinational corporations be identified with the economies of the nations in which they originated?

The course will examine these and other questions in the context of the three way rivalry of the United States, Japan and Europe by comparing patterns of (1) foreign direct investments, (2) intra-firm trading, (3) research and development, (4) corporate governance, and (5) corporate finance of multinational corporations originating in the United States, Germany, and Japan.

A preliminary break out of class sessions and corresponding reading follows:

Week l: Political Economy and International Trade

Week 2: Multinational Corporate Behavior

Robert Gilpin, The Political Economy of International Relations, pp. 3‑24.

Jeffry Frieden and David Lake, eds. International Political Economy, 2d edition, pp. 1 -16.

Susan Strange, States and Markets.

Peter Katzenstein, Small States in World Markets' pp. 17‑79

Paul Kennedy, The Rise and Fall of the Great Powers.

Karl Polanyi, The Great Transformation.

Robert Gilpin, U. S. Power and the Multinational Corporation

John Dunning, Multinational Enterprises and the Global Economy.

William W. Keller, d al., Multinationals the Myth of Globalization (Princeton, N1: Princeton University Press, forthcoming, 1997). World Investment Report 1994, "Transnational Corporations, Employment and the Workplace, Ch. 111: Globalization. Integrated International Production and the World Economy, pp. 117-60. "Everybody's Favorite Monsters: A Survey of Multinationals," The Economist, Special Survey, March 27, 1993.

Week 3 (Session A): Nationality and the Multinational Corporation

Robert Reich, "Who Is Us? Harvard Business Review, January‑February, 1990.

Laura Tyson, "They Are Not Us: Why American Ownership Still Matters," The

American Prospect, 1991, pp. 37-49.

Stephen Thomsen, "We Are All 'Us'," The Columbia Journal of World Business (Winter) 1992, pp. 6-14.

Lorraine Eden and Mareen Molot, "Insiders and Outsiders. Defining 'Who Is user in the North American Auto Industry," Transnational Corporations Vol. 2, No. 3 (December), 1993, pp. 31‑64.

Week 3 (Session B): Competing Firms or Competing States?

Paul Krugman, "Competitiveness: A Dangerous Obsession," Foreign Affairs' March­-April, 1994.

James Fallows, Looking at the Sun.

Lester Thurow, Head-To-Head.

Susan Strange, Rival States, Rival Finns .

Laura Tyson, Who's Bashing Whom?

Week 4: States, Firms, and "Global" Technology Innovation

Alfred Chandler, "Technological and Organizational Underpinnings of Modern Industrial Multinational Enterprise," in Alice Reichover, Maurice Levy-Leboyer, and Halga Nuss aum (eds.), The Multinational Enterprise in Historical Perspective, pp. 30-54. Office of Technology Assessment, Multinationals and the U.S. Technology Base, 1994.

John Dunning, Multinational Enterprises and the Global Economy, Ch. 11, "MNE,  “Technology and Innovatory Capacity: A Host Country Perspective," pp. 287-330; and Ch. 12, "MNE, Technology and Innovatory Capacity: A Home Country Perspective," pp. 33148.

John Cantwell, Technological Innovation and Multinational Corporations.
Scherer, "Competing for Comparative Advantage through Technological Innovation," Business and the Contemporary World, Summer
1992, pp. 30-39.

Office of Technology Assessment, "Foreign Access to U.S. Government Technology Funding," 1995.

Case Material

Materials will be developed to examine several of the following situations.

·        Japanese auto transplants in the United States.

·        Foreign corporate participation in the Advanced Technology Program of the U.S. Department of Commerce.

·        Cases of U.S. FDI in East Asia, and of East Asian FDI in the United States.

·        A case involving government subsidy of an industry of national importance: Sematech or Airbus.

Criteria for Evaluating Teaching and Student Performance

 Students should have mastered and be able evaluate the key concepts surrounding international economic relations. In addition, students should be able to demonstrate an understanding of the differences associated with multinational firms originating in Europe, Asia, and North America. They should also be able to associate those differences with the different policy, cultural, and financial environments of different regions of the global economy.