40043 - Politics of The World Economy

Course Unit Page


This teaching activity contributes to the achievement of the Sustainable Development Goals of the UN 2030 Agenda.

No poverty Decent work and economic growth Reduced inequalities Partnerships for the goals

Academic Year 2021/2022

Learning outcomes

This graduate course provides the students with the key elements to interpret and understand the interaction between political and economic processes at the international level. At the end of the course, the students will be familiar with the orthodox tripartition of IPE,, the contested nature of such trifurcation and seminal debates in the discipline (First part). Students will have acquired an advanced knowledge of the main actors, processes and issues at stake in global political-economic relations (trade-security, trade-democracy nexuses, multinational investment and its geo-political implications, political and economic risk, the politics and performance of poverty reduction, financial crises and the management of power asymmetries in the international system, global governance issues) (Second Part).

Course contents

The first part of the course covers the most relevant theoretical approaches to the study of IPE. In addition to the three orthodox approaches (Mercantilism, Liberalism, Marxism), the course will focus on the role of domestic and international political determinants in the explanations of different economic outcomes, as well as on the complex relation between security and economic interdependence.

The second part of the course will explore the study of international monetary, trade and financial systems. Against their historical and institutional backgrounds, classes will cover the role of international institutions in global economic governance, with a focus on selected development issues (aid policymaking and aid-development nexus) and financial stabilization. Attention will also be devoted to such non-state actors as MNCs, advocacies from civil society- NGOs, credit rating agencies, large private investors, financial networks.

The course is organized in lectures (part 1, taught) and seminars (part 2, flipped classroom modality), as detailed in the following program. Lectures (16 hours) aim to introduce students to the core tenets of the discipline. Seminars (2 modules of 12 hours each) aim to stimulate active participation by the students, and to provide occasions for in-depth discussions of class materials and exercises. For the seminar section of the course, students will be divided in two groups, and each group will be assigned to one module (12 hours), for a total of 28 hours for each student. Students are required to carefully read the assigned material before each session and - in the case of seminars - active participation through presentations of existing scholarship and case studies will also be expected.

Lectures and Seminars will be delivered in presence: however, regardless of the health-related conditions and the specific organization of the course, students who cannot attend in presence will be able to atten the lessons of the entire course remotely on MS TEAMS, upon advance notice to the Segreteria and to the Instructor.

Students will be assessed based on A) Participation to class discussion and debates, ONE Mid-term exam B) A final oral exam on all the compulsory readings indicated in this syllabus.

Class attendance is mandatory (verifcation policy – roster signing - requires that at least 70% of classes be attended –with active involvement in class discussion- for the student to be admitted to the oral exam).

Students who wish to complement their background on selected topics discussed in class may do so through the suggested readings – further references sections, and/or by consulting the following IPE handbook, John Ravenhill (ed), Global Political Economy, Oxford, University Press, Oxford, 2020, sixth edition.


First Part (Taught)

1.Introduction to the study of International political economy

Required readings:

- Cohen, B.J. International Political Economy. An Intellectual History, Princeton University Press, Princeton & Oxford, 2008, Introduction and Chapters 1-2.

- Keohane, R. (2009), 'The Old IPE and the New.' Review of International Political Economy 16(1): 34-46.

Suggested readings:

- Nye, Joseph S., and Robert O. Keohane. “Transnational Relations and World Politics: An Introduction.” International Organization, vol. 25, no. 3, 1971, pp. 329–349.

- Strange, S. (1970), «International Economics and International Relations: A Case of Mutual Neglect», International Affairs, 46(2), pp. 304-15.

- Watson, M. (2014) ‘The Historical Roots of Theoretical Traditions in Global Political Economy', in Ravenhill, J. (ed) Global Political economy, Oxford, Oxford University Press, 2014, pp. 25-49.

- Wade, R. (2009) ‘Beware what you wish for: Lessons for international political economy from the transformation of Economics', Review of International Political Economy, 16, 1, pp. 106-121.

2. The Mercantilist Tradition

Required readings:

- Irwin, D. (1996) Against The Tide: An Intellectual History of Free Trade, Princeton University Press, Princeton, NJ, pp. 116-137 (The Infant Industry Argument);

- Hirschman, A.O. National Power and The Structure of Foreign Trade, Berkeley, University of California Press, 1945, Ch 1 (p.3-12) and Ch.2 (13-52) available at:


trad. it. Potenza nazionale e commercio estero, Bologna, Il Mulino, 1987, pp. 63-74 and pp. 75-124.

Suggested readings:

- Findlay R. and O'Rourke, K. H. (2008) ‘World Trade 1650-1780: The Age of Mercantilism', in Power and Plenty, Oxford and Princeton, Princeton University Press, Ch. 5, pp. 227-294 e 304-310.

3. The Liberal Tradition

Required readings:

- Irwin, D. (1996), Against The Tide: An Intellectual History of Free Trade, op. cit., pp.75-86 (Adam Smith's Case for Free Trade), and pp.87-98 (Free trade in classical economics);

-Keohane, R. (1984), After Hegemony, Princeton, Princeton University Press, pp.49-64, pp. 85-109 and pp.243-259;

- Oneal, J. R. and Russett, B. (1999) ‘The Kantian Peace: The Pacific Benefits of Democracy, Interdependence, and International Organizations, 1885-1992’, World Politics, 52, 1, 22, pp. 1-36.

Suggested readings:

- Kant, I. [1795] ‘Perpetual Peace: A Philosophical Sketch’, available at: https://www.mtholyoke.edu/acad/intrel/kant/kant1.htm

Trad it: Kant, I. Per la pace perpetua, traduzione di Roberto Bordiga, prefazione di Salvatore Veca, Milano, Feltrinelli, 2002, 8 edizione, pp.53-68 (First, Second and Third Article)

4. Security and economic interdependence (I). Systemic change: Hegemonic Stability Theory and its critics

Required readings:

-Conybeare, J. (1984) ‘Public Goods, Prisoners' Dilemma and The International Political Economy’, International Studies Quarterly, 28, pp.5-22;

- Snidal, D. (1985), ‘The Limits of Hegemonic Stability Theory’, International Organization, 39, 1985, pp.579-614.

Suggested readings:

-Krasner, D. (1976) State Power and the Structure of International Trade, World Politics, 28, 3, 1976, pp. 317-347;

-Kindleberger, Ch. (1981), ‘Dominance and Leadership in The World Economy: Exploitation, Public Goods, and Free Riders’, International Studies Quarterly, 25, pp.242-254.

5. Security and economic interdependence (II). Balance of power Theories: Relative gains, alliances and trade policies

Required readings:

- Grieco, J. M. (1988) ‘Anarchy and the limits of cooperation: a realist critique to the newest liberal

Institutionalism’, International Organization, 43, 2, pp.485-507;

- J. Gowa, J. and Mansfield, E.D. (1993), ‘Power Politics And International Trade’, American Political Science Review, 87, No.2, pp.408-420.

Suggested readings:

-Gowa, J. (2011) The Democratic Peace after the Cold War', Economics & Politics, 23,2, 153–171.

6. Domestic determinants: attitudes, preferences and institutions

Required readings:

- Olson, M. and McGuire, M. (1996), ‘The economics of autocracy and majority rule: the invisible hand and the use of force’, Journal of Economic Literature, 34, pp.72-96;

- Mansfield, E.D. Milner, H.V. and Rosendorff, P.B. (2000) ‘Free to Trade: Democracies, Autocracies and International Trade’, American Political Science Review, 94, pp.305-321.

- Mansfield, E.D, Mutz, D. (2013). ‘US versus Them: Mass Attitudes toward Offshore Outsourcing’. World Politics, 65(4), 571-608.

Suggested readings:

- Putnam, D. (1988) ‘Diplomacy and Domestic Politics: The Logic of Two Level Games’, International Organization, 42, 3, pp.427-460;

Colantone, I. and Stanig, P. (2018) ‘The Trade Origins of Economic Nationalism: Import Competition and Voting Behavior in Western Europe’, American Journal of Political Science, 2018, 62, 4, 936-953.

Second Part (Seminars, Debates, Discussion and Presentations, flipped classroom modality)

7. Money and finance in the international political economy: power and regulation

Required readings:

- Ruggie, J. (1982) ‘International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order’, International Organization, 36, 2, Spring 1982, pp.379-415;

- Lipscy, P., & Lee, H. (2019). The IMF As a Biased Global Insurance Mechanism: Asymmetrical Moral Hazard, Reserve Accumulation, and Financial Crises. International Organization, 73(1), 35-64.

- Coulibaly, B.S. and Prasad, E. (2020), The international monetary and financial system: How to fit it for purpose?, Brookings Report, Tuesday, November 2020,

Suggested readings

- Obstfeld, M. (1998) ‘The Global Capital Market: Benefactor or Menace?’, Journal of Economic Perspectives, 12, 4, pp.9-30.

- Cohen, B. (2009) “The Triad and The Unholy Trinity: Problems of International Monetary Cooperation”, J. Frieden and D.Lake, International Political Economy, London and New York, Routledge, 2009, p.255-266;

- Deeg, R. and O'Sullivan, M- (2009) ‘Review Article: The Political Economy Of Global Finance Capital', World Politics ,61, 4, 731–63.

-Reinhart, C. and Rogoff, K. (2011) ‘This Time is Different: A Panoramic View of Eight Centuries of Financial Crises', NBER Working Paper No. 13882, now in Reinhart, C. and Rogoff, K. (2011) This Time Is Different: Eight Centuries of Financial Folly, Princeton, NJ, Princeton University Press.

-S. Claessens, M. Ahyan Khose (2013) ‘Financial Crises: Explanations, Types and Implications', in IMF Working Paper13/28, 2013, pp.1-59.

8. Actors and dynamics in global finance: MNCs, CRAs and Global financial firms

Required readings:

- Strange, S. (1992), ‘States, Firms, and Diplomacy’, International Affairs, 68, 1, pp.1-15;

- Baker, A. (2010) 'Restraining regulatory capture? Anglo-America, crisis politics and trajectories of change in global financial governance', International Affairs, 86, 3, 647-663.

- Brooks, S. (2021) What finance wants: explaining change in private regulatory preferences toward sovereign debt restructuring, Review of International Political Economy, 28:6, 1509-1532

Suggested readings:

- Jensen, N. (2003). “Democratic Governance and Multinational Corporations: Political Regimes and Inflows of Foreign Direct Investment”, International Organization 57 (3), pp. 587-616.

-Biglaiser, G., DeRouen, K. Jr. (2007). “Sovereign Bond Ratings and Neoliberalism in Latin America”, International Studies Quarterly 51(1), pp. 121-138

- Jensen, N. (2005) ‘The Multinational Corporation Empowers the Nation-State', Perspectives on Politics, 3, 3, 548-551


9. The International Trade System

Required readings:

- Goldstein, J., and Gulotty, R. (2021). America and the Trade Regime: What Went Wrong? International Organization, 75(2), 524-557. doi:10.1017/S002081832000065X

- Whalley, J. (1998) ‘Why Do Countries Seek Regional Trade Agreements?', in Jeffrey Frankel, (ed.), The regionalization of the world economy, University of Chicago Press, Chicago, 1998, pp.63-87;

Suggested readings

- Hoekman, B. (2013) ‘Sustaining Multilateral Trade Cooperation in a Multipolar Economy’, RSCAS Working Paper 2013/86, EUI, San Domenico di Fiesole, pp.9-26 available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2377256

- Barton, J., Goldstein, J. Josling, J.E and R.H. Steinberg (2006), The Evolution of the Trade Regime, Princeton University Press, Princeton, 2006, Chapters 2 and 5.


10. The political economy of development: aid, growth, and poverty reduction

Required readings:

- Easterly, W. (2006) The White Man's Burden, Oxford University Press, Oxford & New York, 2006, pp.33-49 ‘The Legend of the Big Push', e pp.99-138, ‘Planners and Gangsters'.

- Baroncelli, E. (2019) The European Union, the World Bank and the Policymaking of Aid, New York, Routledge, Ch.2, 5 and 6.

Suggested readings:

- Burnside, C. and Dollar, D. (2000) ‘Aid, Policies and Growth’, American Economic Review, 90, 4, pp.847-868.

-Ban, C. and Blyth, M. (2013) ‘The Brics and the Washington Consensus: An Introduction', in Review of International Political Economy, 20, 2, 141-155.

11. Mutilateral development and crisis finance: the global-regional interplay between continuity and change

Required readings:

-Henning, R. (2019) Regime complexity and the institutions of crisis and development finance, Development and Change, 50, 1.

- Baroncelli, E. (2019) The European Union, the World Bank and the Policymaking of Aid, New York, Routledge, Ch.1, Ch.3

Suggested readings:

- Woods, N. (2006), The Globalizers: The IMF, the World Bank, And Their Borrowers, Cornell University Press, 179-213.

- Kring, W. and Gallagher, K. (2019) ‘Beyond Bretton Woods? Complementarity & Competition in the International Economic Order’, Special Issue, Development and Change, 50, 1.

-Fioretos. O. and Heldt, E. (2019) Legacies and innovations in global economic governance since Bretton Woods, Review of International Political Economy, 26:6, 1089-1111

12. IPE at 50: between change and continuity

-McNamara, K. and Newman, A. (2020), The Big Reveal: COVID-19 and Globalization’s Great Transformations, International Organization 74 Supplement, December 2020, pp. E59–E77.

-Mansfield, E., & Rudra, N. (2021). Embedded Liberalism in the Digital Era. International Organization, 75(2), 558-585. doi:10.1017/S002081832000056965X

Suggested readings:

-Drezner, D. (2020), ‘The Song Remains the Same: International Relations After COVID-19’, International Organization 74 Supplement, December 2020, pp. E18–E35.

Teaching methods

Taught classes, seminars, class discussion and debates, divided in two modules (see above), with the help of visual tools (ppt, movies, web and non web-resources), contributed teaching by sectoral experts (Guest lecture and Seminar Series).

Assessment methods

Assessing the students' acquisition of expected knowledge and abilities, and her/his overall performance throughout the course is based on the following two levels:

1.Active participation to class discussions, seminars and debates, Guest Lectures and Seminars delivered by external experts and ONE mid-term (worth 50% of the final grade). Students’ participation is encouraged through guidelines-study questions-reviews posted through Virtuale. Active presence in 5 out of 6 classes in the Second Part of the Course (flipped classroom modality) is necessary to qualify for attendance, along with 70% LM IPE Programme-wide requirement.

2. Final oral exam (worth 50% of the final grade) on the overall program, through three questions, suggested by the Professor, aimed at testing the student's ability to verbally articulate themes and methods discussed in class, providing the student with an opportunity to show their abilities to critically reassess such material.

Teaching tools

Ppt, visual and interactive web and non-web based tools, inclusive teaching to enhance class participation, in presence and -where needed-blended formats. Classes held in taught and flipped-classroom modaliies, Guest lectures provided by external experts.

Office hours

See the website of Eugenia Baroncelli

See the website of