PSC 262: Globalization Past & Present

Professor Mark Kayser

mark.kayser@rochester.edu

http://mail.rochester.edu/~mksr/PSC262.html

CSB 209

Tuesdays 2:00 – 4:40

Fall 2007

Although by many measures economic globalization in the great liberal markets at the end of the 19^th and early 20^th centuries was nearly as advanced – and by some measures more so – as globalization today, current debates about the economic and political consequences of the freer movement of goods and factors often ignore earlier experience. This class aims to introduce students to the fundamental trade theories and arguments about the benefits and costs of economic globalization and evaluate them based on both past and present experience. Accordingly, this class will draw on political science, economics, and history.

Requirements:

Exam One (35%); Exam Two (35%) participation (30%). The exams are not cumulative. Attendance is not required but is obviously a prerequisite for participation, a substantial component of your grade. It is in your interest to come to class prepared and ready to discuss the assigned readings. I do not expect that you read the recommended readings. They are provided for students interested in the given topics.

Format:

I will adjust the class format depending on enrollment and space but my aim is to create a seminar environment in which students are encouraged and expected to speak.

Office Hours: Fridays 1:30-3:30, Harkness 320B.

Books:

• Paul Bairoch. Economics & World History: Myths and Paradoxes. Chicago, 1999.

• Jagdish Bhagwati. In Defense of Globalization. Oxford UP, 2004.
• William Easterly. The Elusive Quest for Growth: Economists Adventures and Misadventures in the Tropics. MIT Press, 2002.
• O’Rourke and Williamson. Globalization and History. MIT Press, 1999.

Recommended:

• Robert Heilbroner. The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers. Touchstone, 1999 (7^th ed.).

Note that this syllabus is subject to change.

Week 1. Intro and Administration

OVERVIEW

Week 2. What is (Economic) Globalization?

• Tina Rosenberg. 2002. The Free Trade Fix. New York Times Sunday Magazine. August 18, 2002.
• Cavanaugh and Mander 2004. Alternatives to Economic Globalization, Ch. 2, Design for Corporate Rule.

• World Bank. 2002. Globalization, Growth, and Poverty. Oxford UP. Ch. 1.
• Bhagwati. Ch. 1-3.

Recommended:

• DeLong. 2006. Growth is Good. Harvard Magazine.
• Gilpin Ch. 10, Globalization and Its Discontents
• Dani Rodrik. 2001. Globalization, Growth, and Poverty. Ms.
• Clive Crook. 2001. Globalisation and Its Critics: A Survey of Globalisation. The Economist. September 29^th.
• Bordo, Eichengreen, Irwin. 1999. Is Globalization Today Really Different than Globalization a Hundred Years Ago? NBER Working Paper #7195.

THEORY

Week 3. Specialization, Comparative Advantage, and Increasing Returns

• Sowell. 2000. Basic Economics. Ch. 19; 20 & 21.
• Warsh. 2006. Knowledge and the Wealth of Nations, Ch. 4, The Invisible Hand and the Pin Factory; Ch. 5 How the Dismal Science Got Its Name
• Economist. 1996. Schools Brief.

Recommended:

• Robert Heilbroner. The Worldly Philosophers Ch 3 & 4 (Smith on specialization, Ricardo on comparative advantage.)

• Frieden and Rogowski. 1996. The Impact of the International Economy on National Policies: An Analytic Overview, in Keohane & Milner (eds), Internationalization and Domestic Politics. Cambridge UP.
• Krugman. 1997 (or later eds). International Economics: Theory and Policy. Ch 2 (Ricardo), Ch4 (Heckscher-Ohlin).

IMPLICATIONS FOR NATIONS

Week 4. Trade and Growth

• O’Rourke & Williamson, Ch. 2, Convergence in History.
• Bairoch, Ch. 4, Has Protectionism Always Had a negative Impact?; Ch. 2, Was there a Golden Era of European Free Trade?
• Bhagwati. Ch. 5, Poverty: Enhanced or Diminished?
• Haggard. 1990. Pathways from the Periphery. Cornell UP. Ch. 1 & 2.
• Skidmore & Smith. 2002. Modern Latin America. Chapter 2, The Transformation of Modern Latin America 1880 to 1990s.

Recommended:

• Anne O. Krueger. Political Economy of Policy Reform in Developing Countries. 2002.

• Rodrik, Subramian, & Trebbi. 2002. Institutions Rule: the Primacy of Institutions over Geography and Integration in Economic Development.
• Evans. 1979. Dependent Development. Princeton UP.
• Martin Wolf, Why Globalization Works, Ch.10, Traumatized By Trade.
• Sachs. 2005. The End of Poverty, Ch. 2, The Spread of Economic Prosperity.
• Acemoglu & Robinson. Reversal of Fortune. Quarterly Journal of Economics.
• Rodriguez and Rodrik. 1999. Trade Policy and Economic Growth: A Skeptic’s Guide to the Cross-National Evidence. NBER Working Paper # 7081.

Week 5: Investment & Growth

• O’Rourke & Williamson, Ch. 12, International Capital Flows: Causes and Consequences, pp. 235-45
• Easterly (2001), Ch. 3. Solow’s Surprise: Investment is Not the Key to Growth

• Bhagwati. Ch. 12, Corporations: Predatory or Beneficial?; Ch. 13, The Perils of Gung-ho International Financial Capitalism.
• The Economist. 2003. Economic Focus: Catching Up. August 23, 2003, p. 62.

Recommended

• Krugman. 1994. The Myth of East Asia’s Miracle. Foreign Affairs (Nov/Dec).
• Lucas. 1990. Why Doesn’t Capital Flow from Rich to Poor Countries? American Economic Review 80: 92-96.
• Fareed Zakaria. Culture is Destiny: A Conversation with Lee Kuan Yew. Foreign Affairs.
• Martin Wolf. 2004. Why Globalization Works. Ch. 11, Cowed by Corporations; Ch. 13 Fearful of Finance.
• Easterly (2006), Ch. 2, The Legend of the Big Push.
• Sachs (2005), The End of Poverty, Ch. 3, Why Some Countries Fail to Thrive.
• Lant Pritchet. 1997. Divergence, Big Time. Journal of Economic Perspectives 11: 3-17.
• Hernando deSoto, The Mystery of Capital,
• John Gravois, The De Soto Delusion, Slate
• Micro-credit
• FDI

Week 6. Sovereignty and Democracy

• Bhagwati Ch 8, Democracy at Bay?
• Easterly (2001), Ch. 6. The Loans That Were, the Growth that Wasn’t.
• Martin Wolf. 2001. Will the Nation State Survive Globalization? Foreign Affairs 80(1): 178-90.
• Garrett. 1998. Global Markets and National Politics: Collision Course or Virtuous Circle? International Organization 52.4
• Kayser 2007. How Domestic Is Domestic Politics? Globalization and Elections. Annual Review of Political Science 10: 341-62.

Recommended:

• Something on WTO, NTBs, & national regulations
• Diaz-Cayeros, Magaloni, and Weingast. 2003. Tragic Brilliance: Equilibrium Hegemony and Democratization in Mexico.

• Stokes. 2001. Mandates and Democracy. Ch. 1.
• Martin Wolf. 2004. Why Globalization Works. Ch. 12, Sad about the State.
• Economist. 2005. China and the World Economy. July 30^th, 2005.

Week 7. NTBs vs. Domestic Standards

• Bhagwati. Ch. 10, Wages and Labor Standards at Stake?
• Bhagwati Ch. 11, Environment in Peril?
• Is There an Environmental Kuznets Curve?

Week 8. Exam 1

IMPLICATIONS WITHIN NATIONS

Week 9. Trade: Winners and Losers.

• O’Rourke & Williamson. Ch. 4, Were Heckscher and Ohlin Right?; skim Ch. 5 (Corn Laws)
• David Cannadine. 1990. The Decline of the British Aristocracy; ch 3. pp. 88-139.)
• Iain McLean. 2001. Rational Choice in British Politics. Ch 2. (Peel Chapter) pp.33-55.
• Rogowski. 1987. Political Cleavages and Changing Exposure to Trade. American Political Science Review 81(4): 1121-37.
• Iversen & Cusack. 2000. The Causes of Welfare State Expansion: Deindustrialization or Globalization? World Politics 52(April): 313-49.

Recommended:

• Alexander Gerschenkron. 1943. Bread and Democracy in Germany. Marriage of Iron & Rye. Political Consequences of Decline of the Junkers.
• O’Rourke & Williamson. Ch. 8 (Mass Migrations: Impact on Labor Markets, Home and Abroad), Ch. 9, Globalization, Relative Factor Price Convergence, and Inequality
• Burgoon. 2001. Globalization and Welfare Compensation: Disentangling the Ties that Bind. International Organization 55(3): 509-51.
• William Cline. 1997. Trade and Income Distribution. Ch. 5, Conclusion.

• William Cline. Trade and Income Distribution. IIE Policy Brief 99-7.
• Scheve and Slaughter. 2004. Economic Insecurity and the Globalization of Production. American Journal of Political Science 48(4): 662-74.

• Michael Hiscox. H-O-S-S, Ricardo-Viner, & factor specificity.
• Rodrik. 1997. Has Globalization Gone Too Far? Ch. 2.
• Lindert and Williamson. Does Globalization Make the World More Unequal? Forthcoming in NBER, Globalization in Historical Perspective.

Week 10. Capital: The Gold Standard and 19^th Century Politics.

• Benjamin Cohen. 1977. Organizing the World’s Money. Basic Books. Ch. 3,

A Brief History of International Monetary Relations, pp. 75-83 only.

• Rockoff. 1990. The Wizard of Oz as a Monetary Allegory. Journal of Political Economy 98: 739-60.
• Gold Standard Handout: the Gold Standard & the Specie-Flow Mechanism.
• William Jennings Bryan. Cross of Gold Speech.
• Edward Ranson. 1996. Electing the President, 1896. History Today 46(10): 37-43.

Recommended:

• Gretchen Ritter. Goldbugs and Greenbacks. Cambridge UP, 1997.
• Henry Littlefield. 1964. The Wizard of Oz: Parable on Populism. American Quarterly 16.1, pp. 47-58.
• Bordo and Rockoff. 1996. The Gold Standard as ‘Good Housekeeping Seal of Approval.’ Journal of Economic History 56: 389-428.
• Frank Baum. 1900. The Wizard of Oz. W.W. Denslow.
• Barry J. Eichengreen. 1992. Golden Fetters: The Gold Standard and the Great Depression, 1919-1939

GOVERNING GLOBALIZATON

Week 11. Imperialism: the Prequel?

• Niall Ferguson. 2003. British Imperialism Revisited: The Costs and Benefits of ‘Anglobalization’. Ms. NYU.
• Feyrer & Sacerdote. 2006. Colonialism and Modern Income – Islands as Natural Experiments. NBER #12546.
• Bairoch. Ch. 3, 5-8.
• William Easterly. 2006. The White Man’s Burden. Ch. 8, From Colonialism to Postmodern Imperialism.

Recommended:

• Crawford Young. 1997. The African Colonial State in Comparative Perspective. Ch. 8 & 9.
• Jeffrey Herbst. 2000. States and Power in Africa. Ch. 3.

• Acemoglu, Johnson, & Robinson. Colonial Origins of Comparative Development. American Economic Review.
• Hobson. 1905? Imperialism: A Study.
• Lenin. Imperialism: The Highest Stage of Capitalism.

Week 12. Bretton Woods & the Washington Institutions

• Benjamin Cohen. 1977. Organizing the World’s Money. Basic Books. Ch. 3,

A Brief History of International Monetary Relations, pp. 83-107.

• Gilpin, Ch. 2, The Cold War International Economy; Ch 11, Managing the Global Economy
• Stiglitz. 2000. What I learned at the World Economic Crisis. The New Republic.
• Cavanaugh and Mander. 2004. Ch. 3, The Unholy Trinity.

Recommended:

• Lake. 1983. International Economic Structures and American Foreign Economic Policy, 1887-1934. World Politics 35.4:517-43.
• John Ruggie. 1982. International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Order. International Organization.
• Fritz Scharpf. 1999. Globalization and the Political Economy of Capitalist Democracies, from Governing in Europe. Oxford UP. (19^th and 20^th).
• Benjamin Cohen. 1998. The Geography of Money. Cornell UP.
• Krasner 1976. State Power and the Structure of International Trade. World Politics 28.3.

Week 13. Causes and Consequences of the Collapse of 19^th Century globalization

• Lake. 1991. British and American Hegemony Compared: Lessons for the Current Era of Decline, in Frieden and Lake, eds., International Political Economy. St. Martin’s Press, 3^rd ed. 1995.
• Eichengreen. 1989. The Political Economy of the Smoot-Hawley Tariff. Research in Economic History 12:1-43. (Abridged in Ch. 2 of Frieden and Lake)
• Kindleberger. 1973. The World in Depression. UC Press. Ch. 14, An Explanation of the 1929 Depression.
• O’Rourke & Williamson, Ch. 6 (Globalization Backlash: Tariff Responses) Benjamin Friedman. 2005. Moral Consequences of Economic Growth, Ch. 11, Interwar Germany, pp. 267-78.

Recommended:

• Kindleberger. 1983. A Financial History of Western Europe. Ch 16, War Finance, Reparations, War Debts.
• Daniel Vedier. 1994. Democracy and International Trade. (Interwar beggar-thy-neighbor policies.)
• O’Rourke & Williamson, Ch. 10 (Globalization Backlash: Immigration Gets Restrictive). Ch. 14 (Lessons from History)
• Kindleberger Chapter 4 (instead of Friedman?)

Week 14. Exam 2