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VII

CURRENT PROBLEMS

IN INTERNATIONAL

POLITICAL ECONOMY

At the dawn of the new millennium, the international economy is ever more global
in scope and orientation. In the 1970s, analysts worried that America’s economic
decline would lead to a new bout of protectionism and economic closure. In the
1980s, scholars trumpeted the Japanese model of state-led economic growth and
feared the consequences of the international debt crisis. Today, policy makers and
analysts alike are concerned with the consequences of a global market. Although
less fearful that the international economy will collapse into a new round of
beggarthy-neighbor policies, analysts and individual citizens today worry more
about untrammeled markets degrading the environment, displacing the nation-
state as the primary locus of political activity and undermining the social welfare
state, which had been the foundation of the postwar international economic order
in the developed world.
As we become increasingly aware of the effects of environmental degradation—
both globally, as with ozone depletion, and locally, as with species preservation—
pressures build for the imposition of greater governmental regulations to control
pollution and manage scarce natural resources. But these pressures have increased
at different rates in different countries, creating difficult problems of international
policy coordination. Alison Butler (Reading 29) surveys the economics of
environmental degradation, examines how efforts to protect the environment affect
trade, and explores how countries with different preferences and policies on the
environment can best manage their relations and influence environmental quality
without damaging trade relations.
As the international political economy becomes more “globalized,” many
observers predict that the nation-state will be forced to cede political authority
upward, to supranational entities (like the European Union); downward, to
subnational regions (as reflected in the growth of regionalist movements in Spain,
the United Kingdom, and elsewhere); or sideways, to nongovernmental
organizations (NGOs) (such as Greenpeace or Amnesty International). Even if
Charles Kindleberger’s pronouncement that the “nation-state is just about through
as an economic unit” proved premature when first issued in 1969, many expect
it to become increasingly relevant in the near future.^1 Addressing this debate,