ECONOMY AND THE POLITICS: HOW THEY INTERACT IN THE MEDIUM AND THE LONG RUN?
Bela Greskovits
Winter Trimester 1996
Department of Political Science
CENTRAL EUROPEAN UNIVERSITY



Course Description


The main purpose of this course is to present some problems, methods, and results of comparative structural analysis in political science. Through a collection of examples students will explore, how characteristic features, and differences of political-institutional systems can be better understood by analyzing changes and variations in underlying economic-structural factors over time, and across nations.

Economy is considered as explanatory, while politics as dependent variable during much of the course. Based on a carefully selected, representative collection of both classic, and recent readings, the typical questions discussed in class are as follows.

How did variations in production factor endowments shape political alignments and coalitions, political systems, and policy responses in various countries when facing challenges of the World Economy? (Rogowski, 1989)

In which way did economic openness affect the creation of specific institutional forms of class-compromise in small, developed European states? (Katzenstein, 1985)

How did differences in the sectoral composition of the economy - like the different weight of liquid and fixed asset holding capitalists, or the balance between internationally, and locally oriented investor groups -, influence the political support for development strategy changes in various countries in Latin America? (Frieden, 1988 and 1991)

How structural economic changes, like the shift to smaller units of industrial production and the growth of private, non-industrial employment contributed to the decline of European social democratic parties? (Pontusson, 1995)

To what extent did the results, and prospects of industrialization in Latin America play and important role in regime changes, like the turn to bureaucratic authoritarianism in the 1960s, or the emergence of neoconservative dictatorships in the 1970s? (Hirschman, 1981; Schamis, 1991)

What the course attempts to show in brief is, that structures - more specifically economic structures - matter, and their analysis cannot be rejected, if politics is to be understood. The specific aspect chosen, however, does not mean running counter to the long institutionalist tradition in political science. Bringing the structures back in "by no way" implies that it is only structures, or economic structures that matter, and institutions or individual actors do not.

As a counterbalance against both simplified structuralism, and economic determinism, the course provides two more insights.

First, parallel to the "structuralist" criticism of the political-institutionalist approach (e.g. Pontusson, 1994), examples for the "institutionalist" criticism of structuralist analyses and results will also be presented (e.g. Garrett and Lange 1994), in order to introduce students into the conceptual dimensions of the topic.

Second, while the main focus of the course is how economy affects politics, from time to time the opposite question will be raised as well. Based on the selected literature, for example, we can ask not only, how more than a decade of negative growth (recession) might have reshaped polities and institutions in Latin America, but also: how a continued presence of the Left in the government combined with a sustained strength of trade unions may be an explanatory factor behind the good growth performance of some developed countries.

Last, but not least, while confronting the students with insights, ideas, conceptual frameworks, and results, that are still mostly new for the East-Central European political science, the course hopes to encourage scholarly adaptation, and application. It hopes to urge future researchers to pay more attention to socioeconomic structures, groups, and interests in the background of the often confusing, rapid changes of the transforming Eastern political realm.

Requirements

While the lectures will give a basic insight, it will be the goal of the seminars to deepen the understanding, by an interactive and creative exploration of a carefully selected set of literature. Therefore students are required to attend regularly and to participate actively in the course.

Each student will be requested to pass a brief written test after every four lectures.

Students are also requested to prepare an essay by the end of the course, related to one or some of the topics.

Grading

In class activity: 30%

Tests: 30%

Final essay: 40%

Week 1

Introduction to the course

Week 2


DO ECONOMIC STRUCTURES MATTER?
(An empathic, "structuralist" criticism of historical institutionalism in political science)

Required readings:

Pontusson, Jonas: "From Comparative Public Policy to Political Economy: Putting Political Institutions in their Place, and Taking Interests Seriously." Cornell University. Department of Government 1994. ms

Recommended:

Thelen, K. and Steinmo, S. "Historical institutionalism in comparative politics" in S. Steinmo, K. Thelen, and F. Longstreth eds. Structuring politics New York: Cambridge University Press. 1992.

Weaver, K. and Rockman, B. "Assessing the effect of institutions" and "When, and how do institutions matter?" in K. Weaver, and B. Rockman eds. Do institutions matter? Washington D. C. Brookings Institute. 1993.

Week 3

POLITICAL IMPLICATIONS OF PRODUCTION FACTOR ENDOWMENTS
(Trade expansion / trade contraction - assertive and defensive political coalitions)

Required readings:

Rogowski, Ronald: "Why Changing Exposure to Trade Should Affect Political Cleavages?" Chapter One in Ronald Rogowski, Commerce and Coalitions. How Trade Affects Domestic Political Alignments. Princeton University Press. Princeton, New Jersey 1989.

Recommended:

Stolper, W. and Samuelson, P. "Protection and Real Wages" Review of Economic Studies 9. 1941

Haggard, S . "Explaining Development Strategies", Chapter Two in Stephan Haggard, Pathways from Periphery. The Politics of Growth in the Newly Industrializing Countries. Cornell University Press. Ithaca and London 1990.

Week 4

THE POLITICAL IMPLICATIONS OF SECTORS I.

(How the intensity of conflict among business, and labor, and the cleavage among fixed and liquid asset holders impacted upon political support for development strategy options)

Required readings:

Frieden, J. A. "Classes, Sectors, and Foreign Debt in Latin America" Comparative Politics. October 1988.

Recommended:

Frieden, J. A. "Debt, Development, and Democracy. Modern Political Economy and Latin America, 1965-1985" Princeton University Press. Princeton, New Jersey. 1991.

Week 5


THE POLITICAL IMPLICATIONS OF SECTORS II.
(The politics of international capital mobility, and high-level financial integration: implications for distribution and conflict among capital and labor, fixed and liquid asset holders, and producers of tradable, and non-tradable goods)

Required readings:

Frieden, Jeffrey, A. "Invested Interests: the Politics of National Economic Policies in a World of Global Finance." International Organization. 45. 4, Autumn 1991.

Recommended:

Frieden, J. A. "Debt, Development, and Democracy. Modern Political Economy and Latin America, 1965-1985" Princeton University Press. Princeton, New Jersey. 1991.

Week 6

THE POLITICAL IMPLICATIONS OF FACTORS, AND SECTORS COMBINED

Required readings:

Frieden, J. A. and Ronald Rogowski "The Impact of the International Economy on National Policies. An Analytical Overview." Prepared for the Project on Internationalization and Domestic Politics. September 1994. ms.

Week 7

THE POLITICAL ECONOMY OF THE "LEADING SECTOR"
(Political implications of the sector through which a national economy is tied into the international economy)

Required reading:

Shafer, Michael, D. "Old Questions, New Answers" and "Sectoral Analysis: The Model's Bare Bones" Chapters One and Two in Michael D. Shafer Winners and Losers. How Sectors Shape the Developmental Prospects of States. Cornell University Press. Ithaca and London 1994

Recommended:

Shafer, M. D. "Winners and Losers. How Sectors Shape the Developmental Prospects of States." Cornell University Press. Ithaca and London 1994

Week 8

THE POLITICAL ECONOMY OF THE PRODUCT CYCLE
(The - domestic, and external - political tendencies of three successive champions of industrial development: textiles, steel, and car-manufacturing, in different stages of their life-cycle)

Required readings:

Kurth, James, R. "The Political Consequences of the Product Cycle: Industrial History and Political Outcomes" International Organization 33.1, Winter 1979.

Week 9

THE POLITICAL ECONOMY OF THE "PROJECT CYCLE"

(How the relative bargaining capacity of multinational corporations, and their host countries is affected by the life-cycle of large investment project)

Required readings:

Moran, Th. H. "Multinational Corporations and Dependency: a Dialogue for Dependentistas and Non-Dependentistas" International Organization, Winter 1978.

Recommended:

Moran, Th. H. "A Model of the Relations Between the Host Country and Foreign Investors: Balance of Power, National Interest, and Economic Nationalism" in Theodor H. Moran Multinational Corporations and the Politics of Dependence; Copper in Chile. Princeton University Press, Princeton, New Yersey, 1974

Moran, Th. H. "International Political Risk Assessment, Corporate Planning, and Strategies to Offset Political Risk" in Theodor H. Moran ed. Multinational Corporations. The Political Economy of Foreign Direct Investment. Lexington Books 1985


Week 10


AFTER ALL, INSTITUTIONS MATTER
(An empathic, institutionalist criticism of Frieden, and Rogowski)

Required readings:

Garrett, G. and Peter Lange "Internationalization, Institutions and Political Change" Stanford University, and Duke University, February 20. 1994. ms.

Week 11


THE POLITICAL IMPLICATIONS OF ECONOMIC CRISES
(How do crises affect alliances among societal actors)

Required reading:

Gourevitch, P. "The Politics of Economic Policy"; "Explaining Policy Choices"; and "The Social Bases of the Autonomous State" Chapters 1, 2, and 6, in Peter Gourevitch Politics in Hard Times. Comparative Responses to International Economic Crises. Cornell University Press. Ithaca and London. 1986

Recommended:

Maier, Ch. S. "Why did Communism Collapse in 1989?" Harvard University, Program on Central and Eastern Europe, Working Paper Series No. 7. 1991

Week 12


"STRENGTH OF THE WEAK." ECONOMIC OPENNESS, AND CLASS COMPROMISE
(The economic and social sources of good economic performance, and political stability in small European states)

Required readings:

Katzenstein, P. J. "Introduction", and "Flexible Adjustment in the Small European States" in Peter J. Katzenstein, Small States in World Markets. Industrial Policy in Europe. Cornell University Press. Ithaca and London, 1985.

Recommended:

Katzenstein, P. J. "Small States in World Markets. Industrial Policy in Europe." Cornell University Press. Ithaca and London, 1985.

Week 13


LEFT IN POWER, AND ECONOMIC GROWTH IN CRISIS
(The growth-effects of a combined political, and market-power of labor in capitalist democracies)

Required readings:

Lange, P. and Geoffrey Garrett "The Politics of Growth: Strategic Interaction and Economic Performance in the Advanced Industrial Democracies, 1974-1980." The Journal of Politics, 47. 1985.

Garrett, G. and Peter Lange "Performance in a Hostile World: Economic Growth in Capitalist Democracies, 1974-1982" World Politics 38. 1986.

Recommended:

Hicks, A. "Social Democratic Corporatism and Economic Growth" The Journal of Politics, 50. 1988.

Week 14


STRUCTURAL CHANGE, AND THE DECLINE OF THE LEFT
(How structural adjustment affected the political and market power of labor in Western democracies, and Latin America)

Required readings:

Pontusson, J. "Explaining the Decline of European Social Democracy: The Role of Structural Economic Change." Cornell University. Department of Government January 1995. ms

Gibson, E. "Populism Across Developmental Eras. Rural and Urban in the Transformation of the PRI in Mexico and Peronism in Argentina" Paper presented at the 91st Annual Meeting of the American Political Science Association. Chicago, IL, August 31-September 3. 1995. Northwestern University. ms.

Recommended:

Heredia, B. "Capital Emboldened: State-Business Relations in Post-Reform Mexico" Paper delivered at the Annual Meeting of the American Political Science Association. Chicago, August 31-September 3. 1995. Departarnento de Estudios Internacionales. Instituto Tecnologico Autonomo de Mexico. ms.

Diaz, A. "Restructuring and the New Working Classes in Chile. Trends in Waged Employment, Informality and Poverty, 1973-1990." Discussion Paper Nr. 47. United Nations Research Institute for Social Development. October 1993.

Week 15


ECONOMIC IMPLICATIONS OF TV; ABSENCE OF ECONOMIC ELITECOMPROMISE
(The socioeconomic origins, and consequences of inflation)

Required readings:

Hirschman, A. O. "The Social and Political Matrix of Inflation: Elaborations on the Latin American Experience." in Albert O. Hirschman Essays in Trespassing. Economics to Politics and Beyond. Cambridge University Press. 1981.

Recommended:

Haggard, S. and Robert R. Kaufman "The Political Economy of Inflation and Stabilization in Middle-lncome Countries" in Stephan Haggard and Robert, R. Kaufman eds. The Politics of Economic Adjustment. International Constraints, Distributive Conflicts, and the State. Princeton University Press, Princeton, New Jersey, 1992.

Week 16


POLITICAL IMPLICATIONS OF THE ABSENCE OF ECONOMIC ELlTE AND CLASS COMPROMISE
(The socioeconomic origins of authoritarian regimes in Latin America)

Required readings:

Hirschman, A. O. "The Turn to Authoritarianism in Latin America and the Search for its Economic Determinants" in Albert O. Hirschman Essays in Trespassing. Economics to Politics and Beyond. Cambridge University Press. 1981.

Schamis, H. E. "Reconceptualising Latin American Authoritarianism in the 1970s. From Bureaucratic Authoritarianism to Neoconservatism" Comparative Politics. January 1991

Recommended:

Londregan, J. B., and Keith T. Poole "Poverty, the Coup Trap, and the Seizure of Executive Power" World Politics

Week 17


SOCIOECONOMIC ORIGINS OF SYSTEMS
(Reconsidering the message of "Social Origins of Democracy, and Dictatorship")

Required readings:

Moore, B. Jr. "Preface and Acknowledgments", and "The Democratic Route to Modern Society"; "Revolution from Above and Fascism"; "The Peasants and Revolution", Chapters VII, Vlll, and IX in Barrington Moore, Jr. Social Origins of Dictatorship and Democracy. Lord and Peasant in the Making of the Modern World. Beacon Press. Boston 1966

Recommended:

Stokes, G. "The Social Origins of East European Politics" in Daniel Chirot, ed. "The Origins of Backwardness in Eastern Europe. Economics and Politics from the Middle Ages until the Early Twentieth Century", University of California Press. Berkeley, Los Angeles, Oxford 1989




CRC-Curriculum Resource Center
CEU Budapest, Hungary
Modified: May, 1996

Gre_Econ&Pol.W96PS.v3

Back to the Political Science Syllabi List Back to the Syllabi Collection

Back to the CRC Homepage Back to the CEU Homepage