International political economy

For the study of political economy on a national level, see Political economy.

International political economy (IPE) is the study of how politics shapes the global economy and how the global economy shapes politics. A key focus in IPE is on the power of different actors such as nation states, international organizations and multinational corporations to shape the international economic system and the distributive consequences of international economic activity. It has been described as the study of "the political battle between the winners and losers of global economic exchange."

A central assumption of IPE theory is that international economic phenomena do not exist in any meaningful sense separate from the actors who regulate and control them. Alongside formal economic theories of international economics, trade, and finance, which are widely utilised within the discipline, IPE thus stresses the study of institutions, politics, and power relations in understanding the global economy.

The substantive issue areas of IPE are frequently divided into the four broad subject areas of 1. international trade, 2. the international monetary and financial system, 3. multinational corporations, and 4. economic development and inequality. Key actors of study may include international organizations, multinational corporations, and sovereign states.

International political economy initially emerged as a subdiscipline of international relations in the 1960s and 1970s, prompted by the growth of international economic institutions such as the World Bank, International Monetary Fund, and the General Agreement on Tariffs and Trade, alongside economic turmoils such as the fall of the gold standard, 1973 oil crisis, and 1970s recession. The study of multinational corporations also featured prominently in the early IPE, in close interaction with scholars in adjancent disciplines and the regulatory initiatives championed by the United Nations Centre on Transnational Corporations (1975–1992). IPE eventually developed into an independent field also linked to international economics and economic history, where scholars study the historical dynamics of the international political economy.

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