International Political Economy Master's Final Revision Flashcards

Comprehensive practice flashcards for the International Political Economy Master's Final Revision, covering Selectorate Theory, Vladimir's Choice, the Impossible Trinity, Resource Curse, Games, Hegemony, Sanctions, Interdependence, Bellicist Theory, and Policy Diffusion.

What is the core focus of Selectorate theory in International Political Economy?

It explains how political leaders maintain power and how institutions shape policy outcomes based on the support of specific groups.

In Selectorate theory, what is the 'selectorate' ($S$)?

The group of people in a political system who have some role in choosing the leaders.

What is the 'winning coalition' ($W$) within Selectorate theory?

The subset of the selectorate whose support is necessary for a leader to remain in office.

According to Selectorate theory, what is a leader's primary motivation?

To keep the winning coalition satisfied to remain in power.

What does the ratio of the winning coalition to the selectorate ($W/S$) dictate?

How a leader must allocate national resources to stay in power.

How do leaders in autocracies or juntas (small $W$) typically buy political loyalty?

By distributing targeted, exclusionary private goods to their small inner circle of cronies.

Why do leaders in democracies (large $W$) provide non-excludable public goods?

Distributing private goods becomes mathematically too expensive due to the large size of the winning coalition.

Name three examples of public goods provided in a large $W$ system.

National security, open trade, and public infrastructure.

How does democratization in developing nations affect trade policy according to Selectorate theory?

It expands the winning coalition ($W$), leading leaders to abandon protectionism in favor of free trade to satisfy the domestic working class.

Who is the median voter in an expanding winning coalition in a labor-abundant developing nation?

A member of the domestic working class.

What are two economic benefits for the masses intended by a democratic 'rush to free trade'?

Increased real wages and lower consumer prices.

Which country is an example of democratization encouraging trade liberalization policies?

Mexico.

Define 'Vladimir’s Choice' in a game-theoretic context.

A scenario where a political actor prioritizes relative gains and the absolute degradation of an adversary over their own absolute economic welfare.

In the folk tale 'Vladimir’s Choice', what is the condition of the wish?

Whatever Vladimir asks for, his neighbor will automatically receive double.

What was Vladimir's specific request in the folk tale?

To have one eye gouged out so that his neighbor would lose both.

How does 'Vladimir’s Choice' apply to Economic Nationalism?

States may endure self-inflicted economic inefficiencies if they impose a disproportionately larger penalty on a strategic competitor.

According to Mutz and Kim, why do many people oppose trade?

They dislike seeing other countries benefit and think in terms of winners and losers rather than mutual gains.

How is 'Vladimir’s Choice' illustrated in US-China trade relations?

The United States imposed tariffs on Chinese goods despite facing higher costs for American consumers and firms.

What is the Impossible Trinity (Monetary Trilemma)?

A structural logic stating a state can achieve any two of three specific economic objectives simultaneously, but never all three.

What are the three components of the Impossible Trinity?

$1.$ Fixed exchange rate, $2.$ Free capital mobility, and $3.$ Monetary policy autonomy.

Define 'Free capital mobility' in the context of the Impossible Trinity.

Money can move across borders easily seeking higher returns or interest rates.

Define 'Monetary policy autonomy'.

The government's ability to set its own interest rates to control inflation or growth.

Which two objectives does the United States choose in the Impossible Trinity?

Free capital mobility and monetary policy autonomy.

What must the United States give up according to the Impossible Trinity?

A fixed exchange rate (Stable currency).

Which two objectives does China choose in the Impossible Trinity?

Fixed exchange rate and monetary policy autonomy.

What does China sacrifice in the Impossible Trinity?

Full capital mobility.

In the logic of fixed exchange rates, what risk arises when the dollar weakens?

Inflation risk.

Why is the US unable to maintain a fixed exchange rate in a system of free capital mobility?

It would require sacrificing monetary policy autonomy, making it difficult to control domestic economic conditions.

What is the 'Resource Curse' (Paradox of Plenty)?

The observation that nations with abundant natural resources often experience slower economic growth and higher prevalence of authoritarianism.

What is the 'rentier effect'?

When governments rely on resource rents rather than domestic taxation, reducing accountability to citizens.

How does the Resource Curse affect a ruler's ability to handle political opposition?

Rulers use resource rents to fund security apparatuses and 'buy off' political opposition.

What institutional issues are often associated with the Resource Curse?

Corruption, clientelism, and the decay of governmental institutions.

Which country is frequently cited as a classic example of the Resource Curse?

Venezuela.

Define 'Dutch Disease'.

An economic mechanism where one sector's success (usually natural resources) causes other sectors to weaken.

What is the primary mechanism of Dutch Disease?

A boom in natural resource exports causes the national exchange rate to appreciate.

How does currency appreciation in Dutch Disease affect manufacturing and agriculture?

It makes these sectors less competitive on the global market.

What is 'deindustrialization' in the context of Dutch Disease?

High profits in one sector 'crowd out' the productive economy and corrode incentives to invest in non-resource sectors.

From where does the term 'Dutch Disease' originate?

The Netherlands, following the discovery of large natural gas reserves.

How does the semiconductor industry in Taiwan relate to Dutch Disease?

Analysts worry that extreme success in semiconductors could crowd out other sectors and make the economy overly dependent on one industry.

What is the 'One-Line Memory Trick' for Dutch Disease?

"One sector gets so strong that it crowds out the rest of the economy."

In IPE, what is 'Rent-seeking'?

The strategic pursuit of capturing wealth from natural resource rents for personal gain rather than productive activity.

How do US sugar producers illustrate rent-seeking?

They use political influence to secure protection from foreign competition.

What is a 'rent-grabber'?

An entrepreneur who specializes in direct wealth appropriation, such as corruption or extortion, rather than production.

What characterizes 'Grabber-Friendly Institutions'?

Weak rule of law, dysfunctional bureaucracy, and high corruption.

What happens to talent in a grabber-friendly state during a resource windfall?

Talent is attracted away from production and into grabbing, lowering the nation's aggregate income.

According to the entrepreneurial allocation model, when does the shift between producer and grabber stop?

When the returns of both activities are equalized.

Define the 'Prisoner’s Dilemma'.

A 'mixed-motive game' where actors benefit from mutual cooperation but gain more from 'double-crossing' or defection.

What is the dominant strategy for a rational individual in a single-play Prisoner’s Dilemma?

Defection.

How does an 'iterated game' change the logic of the Prisoner’s Dilemma?

It introduces repeated interactions, making mutual punishment over the long run a deterrent to short-term defection.

What becomes a 'critical asset' in iterated interactions that is irrelevant in single-play games?

Reputation.

How do WTO members demonstrate the importance of iterated games?

They cooperate because repeated interactions make future retaliation and reputation important.

What is the core definition of 'Hegemony'?

A concentration of structural and material power where a single nation has the capability and will to police the rules of the global economic order.

Name three materials required for 'material dominance' in a hegemon.

Military dominance, financial depth, and industrial supremacy.

According to Hegemonic Stability Theory (HST), what three functions must a benevolent hegemon perform?

Open markets for distress goods, counter-cyclical lending, and acting as a lender of last resort.

What is Daniel Drezner’s 'Post-Hegemony Nuance'?

That hegemonic decline does not automatically mean institutional collapse; existing regimes can remain resilient.

What does Drezner argue about global governance during the 2008 Financial Crisis?

Global governance was 'good enough' to prevent a 1930s-style collapse.

Define 'Beggar-Thy-Neighbor Policy'.

Economic strategies where a country attempts to advance its own welfare by worsening the economic condition of its partners.

What are three mechanisms of Beggar-Thy-Neighbor policies?

High tariffs, competitive currency depreciation, and strict foreign-exchange controls.

Explain Kindleberger's 'Fallacy of Composition'.

When the pursuit of individual national interests destroys the world public interest, leaving every country in a worse position.

What is a 'regressive spiral' in trade?

A cycle where multiple countries cut imports to achieve surpluses, inadvertently wiping out international trade.

What historical legislation is a primary example of a Beggar-Thy-Neighbor policy?

The Smoot-Hawley Tariff Act of 1930.

Why is a 'stabilizer' needed in a non-zero sum game to prevent protectionism?

To set standards of conduct and absorb redundant commodities so countries don't maximize short-run gains out of fear.

Did the global economy deteriorate into a 1930s-style spiral after the 2008 crisis?

No, because the international institutional system and multilateral trade system acted as a brake.

What are 'targeted sanctions' (smart sanctions)?

Punitive measures designed to pressure specific individuals, entities, or sectors rather than a target state's entire population.

What is the theoretical objective of targeted sanctions?

To minimize humanitarian side effects on civilians while maximizing costs on the regime's core support groups.

List four examples of targeted sanctions.

Asset freezes, travel bans, arms embargoes, and financial restrictions on international banking.

What does the 'microfoundations' approach to sanctions argue?

Sanction success depends not on 'how much a state suffers', but on 'who suffers'.

How is 'weaponized interdependence' used in modern sanctions?

States exploit the topography of global networks (hubs) to achieve chokepoint effects against adversaries.

Why were the 1960–62 sanctions on the Dominican Republic successful?

They surgically focused on the sugar industry, which was the personal financial base of the Trujillo family.

By how much did the Dominican Republic GNP drop during successful U.S. sanctions?

$$1.9\,\%$$

Why did the U.S. sanctions on Panama in the late 1980s fail?

They primarily hurt the urban middle class rather than Noriega’s core military support base, despite a massive GNP drop.

By how much did Panama's GDP drop during the failed U.S. sanctions?

$$17.8\,\%$$

In David Baldwin's 'Logic of Choice', what is 'Effectiveness'?

A dimension measuring the degree to which sanctions achieve intended goals, subdivided into scope, weight, and domain.

Define the 'Scope' component of effectiveness.

The range of issues affected by the sanctions, such as tariff levels or human rights.

What is the 'Weight' component of effectiveness?

The degree of impact on the target's behavior (the probability change in their actions).

What is the 'Domain' component of effectiveness?

The number of actors (countries or organizations) affected by the sanctions.

How does Baldwin view the 'Costs to the User' in sanction success?

Success is gain minus costs; lower costs generally increase success, but some costs are needed for credibility.

What is Baldwin’s argument regarding 'Costs to the Target'?

Imposing costs is a success in itself, even if the target does not concede, because the behavior has been penalized.

Explain 'Stakes for the User' in Baldwin’s framework.

Higher stakes for the user (like non-proliferation) justify higher economic sacrifices and make contributions more valuable.

Explain 'Difficulty of the Undertaking' in sanction analysis.

Demanding a target alter core sovereign interests is high difficulty; success should be structurally weighted for this difficulty.

What is the 'Panopticon Effect'?

A state's ability to extract critical information from global network hubs over which it has jurisdiction.

What allows a state to extract info using the Panopticon Effect?

Hub Centrality; most users find it impossible to avoid communicating through central intermediaries.

Give an example of a financial messaging Panopticon.

The U.S. Treasury using the Terrorist Finance Tracking Program (TFTP) to subpoena data from SWIFT.

What is 'PRISM' and how does it relate to the Panopticon Effect?

A program where the U.S. government compelled technology giants to provide strategic info on non-U.S. targets using home game advantage over servers.

Define the 'Chokepoint Effect'.

A privileged state’s ability to use jurisdictional control over a central network hub to limit or penalize access for adversaries.

Why was the 2012 SWIFT disconnection of Iranian banks called the 'financial equivalent of crossing the nuclear threshold'?

Because it crippled Iran's banking sector and forced them to the negotiating table by removing access to a critical global hub.

What percentage of global web traffic flows through hubs in Northern Virginia?

$$70\,\%$$

Why does 'Focal Power' make a network hub resistant to disruption?

Challengers must coordinate a massive number of actors to defect to a different system simultaneously.

What is the core aphorism of 'Bellicist Theory'?

"War made the state, and the state made war."

Who is the famous scholar associated with Bellicist Theory?

Charles Tilly.

What is the second step in the 'Four-Step Logic' of Bellicist state-building?

Extraction and Taxation; rulers build bureaus to extract financial resources from domestic populations for war.

According to Didier Queralt, how do 'Tax-Financed Wars' build long-run fiscal capacity?

Rulers must bargain with domestic taxpayers and offer institutional concessions (like property rights) to overcome resistance.

How do 'Loan-Financed Wars' weaken state building?

Rulers bypass domestic taxpayers by using external credit, breaking the political pressure to bargain and build institutions.

Define 'Policy Diffusion'.

The process through which a nation's policy choices are systematically conditioned by the prior choices or innovations of other countries.

What dynamic curve is followed by global waves of policy liberalization?

An S-shaped logistic curve.

Name the four core causal mechanisms of Policy Diffusion.

Coercion, Competition, Learning, and Emulation.

What is 'Coercion' in policy diffusion?

When powerful states or organizations (like the IMF or World Bank) pressure weaker states to adopt policies via conditionality.

Define 'Competition' as a diffusion mechanism.

When governments adopt policies (like cutting corporate taxes) to safeguard economic competitiveness and prevent capital diversion to neighbors.

Define 'Learning' as a diffusion mechanism.

Updating internal bureaucratic beliefs based on the observed success or failure of policies implemented abroad.

What is 'Emulation' in the context of policy diffusion?

The ritualistic copying of policies to align with a 'logic of appropriateness' and capture global legitimacy, signaled by actions like signing treaties.