International Political Economy

absolute advantage

ability of country/firm to produce more of a particular good/service than other countries/firms using the same amount of effort and resources

comparative advantage

ability of a country to produce a particular good/service more efficiently than other goods/services

factors of production

• land

• labor

• capital

• human capital

distributive effects

who wins and who loses

trade makes the country richer overall but some groups lose

non-tradable sector

jobs that cannot be traded across border

• hairdressers/teachers

factor mobility

how easily workers/machines can move from one industry to another

material interests

money based reasons for a views

• wages/job/prices

non-material interests

values, indentity, feelings

• patriotism/nationalism/culture

sociotropic

judging a policy by its effect on the country as a whole, not just yourself

political institutions

rules of the political gae

• democracy v dictatorship, electoral systems, parties

electoral system

rules that turn votes into seats

• FPTP, proportional representation

median voter

parties often chase this voter in democracies