Political Economy 304

Comparative and International Political Economy

Professor: Douglas Nelson

Office: Tilton 108 (Murphy Institute), Phone: 865-5317

Office Hours: Monday and Wednesday, 3:30-5:30

Phone: 865-5317

Webpage: http://www.tulane.edu/~dnelson/

Virtually all contemporary economies are characterized by extensive relations between the economic and political systems. All of the modern (post-) industrial political economies are capitalist democracies and (with appropriate adjustments for the European Union) they are all organized as nation states. In addition to these key building blocks, they are also characterized by extensive welfare states, relatively organized labor markets, and governments that take an active role in the management of the macroeconomy. It has been argued that these last three institutions play an essential role in supporting the first three. Furthermore, it has been argued that trends in globalization and post-modernization fatally undermining the second set of institutions. In this course, we examine these relationships and their dynamics.

PECN 304 is one of the core courses in the political economy major. I will assume that you have had exposure to economic analysis at least at a level consistent with principles of microeconomics and macroeconomics. I will also assume that you are comfortable with algebra and geometry. Some of the readings and some of the lectures may make use of somewhat more advanced mathematics. I will not expect you to be able to reproduce such analysis on an exam, however I will expect you to make a good faith effort to understand what is being argued and to be able to express informally what the basic argument is, and how it fits into the broader goals of the course.

Course objectives:

■This course introduces students to the comparative analysis of the interaction between economics and politics with particular application to the relatively wealthy, industrial/post-industrial countries.

■Students should be able to apply a variety of modern theoretical and empirical approaches to the analysis of core issues in the political economy of such countries. Specifically, students should understand that different countries seek solve problems related to macroeconomic management, employment, delivery of welfare in response to changes in the economic, political, technological and social environments. That they solve similar problems in quite distinctive ways, while remaining capitalist democracies.

■Students should be able to identify core controversies in the analysis of these issues and should develop theoretical frameworks, historical and quantitative data sufficient to support making well-grounded evaluations of those controversies.

Readings for the course will be drawn from:

Herbert Kitschelt, Peter Lange, Gary Marks, and John Stephens, eds. (1999). Continuity and Change in Contemporary Capitalism. Cambridge: Cambridge University Press. [KLMS]

Barry Eichengreen (2006). The European Economy since 1945: Coordinated Capitalism and Beyond. Princeton: Princeton University Press. [Eichengreen]

Torben Iversen (2005). Capitalism, Democracy and Welfare. Cambridge: Cambridge University Press. [Iversen]

Alberto Alesina and Edward Glaeser (2004). Fighting Poverty in the US and Europe: A World of Difference. New York: Oxford University Press. [A&G]

Jonas Pontusson (2005). Inequality and Prosperity: Social Europe vs. Liberal America. Itahac: Cornell University Press. [Pontusson]

In addition to the above items, there are several additional articles that are available online, either directly or on electronic reserve.

There is a substantial amount of reading, and everyone is responsible for completing the reading in a timely fashion (i.e. prior to it’s discussion in class). Do not try putting the reading off until just before class. The assigned readings create a foundation on which the lectures will build. The readings are not a substitute for the lectures, nor are the lectures a substitute for the assigned readings. You will be responsible for all readings and all lecture material on exams.

This course is primarily a lecture class. However, your understanding of both the assigned readings and the lectures will be enhanced through active participation in class discussion. Asking questions in class is a good way to clarify issues that were unclear in the assigned readings and/or in the lecture.

Evaluation: Your performance in this course will be evaluated on the basis of 2 examinations (worth points 100 each); and 3 reaction papers (worth 100 total points). To earn an A, you must earn at least 90 percent of the points available. To pass the course you must earn at least 60 percent of the points available. Grades between these limits will be determined on the basis of your performance relative to that of the class as a whole.

Examination format. Both exams will have the following format: about 40% short answer questions and about 60% essays. The short answer questions seek to identify mastery of detailed knowledge of core concepts. The essay questions ask you to develop a coherent argument requiring you to deploy analytical techniques and specific knowledge developed in the course. In general there will be more questions of both types than must be answered, so you will have some choice (though there is often one mandatory question which everyone must answer). Exams will be written in blue books, which you must supply.

Policy on examinations. The midterm exam will be given in class on 26 February. Unless you have a standard university accepted excuse for missing the exam (e.g. health with standard university form), you must take the exams at their scheduled time. The final examination will only be given on the scheduled date: Wednesday, 6 May, 1:00-5:00 (there will be no exceptions so do not make travel plans that conflict with this).

Reaction papers. The course is divided into four main topics (see syllabus). Every student must write a reaction paper on one subtopic (i.e. the readings for one week) in each of three main topics. A reaction paper is a short paper discussing some aspect of the relevant reading, it is not a book report. In the reaction paper you must explicitly discuss the relevant reading and evaluate some central aspect of its discussion. Note: “evaluate” means that you must identify some central aspect of the books analysis, explain why you think this aspect is interesting/important, and present your evaluation of the author’s position (note that you must make an argument, simply asserting your agreement or disagreement will not be sufficient for a passing grade). The reaction papers are due in class on the first date scheduled for discussion of the readings (see syllabus), late papers will not be accepted and will earn a grade of zero.

PECN 304 SYLLABUS Spring 2009

● 1/13, Course Introduction: Globalization and Comparative PE

Topic I. The Modern Political Economy: industrial capitalism, nation state, and liberal democracy

● 1/15, The Nation State: Sovereignty and Democracy

■ Held, David (1995). “The Development of the Modern State”. In S. Hall and B. Gieben, Modernity: An Introduction to Modern Societies. Cambridge: Polity Press, pp. 55-89. [ERes]

■ Michael Mann (1988). “The Autonomous Power of the State: Its Origins, Mechanisms and Results”. In States, War, and Capitalism. Oxford: Blackwell, pp. 109-136.

● 1/20, Modern Capitalism: Disembedding the Market

■ Collins (1980). “Weber’s Last Theory of Capitalism: A Systematization”. American Sociological Review; V.45-#6, pp. 925-942.

● 1/22, Capitalism and Democracy

■ Polanyi (1944). “Man, Nature, and Productive Organization”. Chapter 11 of The Great Transformation. Boston: Beacon Press, pp. 130-134. [ERes]

■ Huber, Evelyne, Dietrich Rueschemeyer, and John Stephens (2003). “The Impact of Economic Development on Democracy”. Journal of Economic Perspectives; V.7-#3, pp. 71-86.

■ Torben Iversen (2006). “Capitalism and Democracy”. Chapter 33 in B. Weingast and D. Wittman, eds. Oxford Handbook of Political Economy. New York: Oxford University Press, pp. 601-623.

■ Greif, Avner (2008). “Commitment, Coercion and Markets: The Nature and Dynamics of Institutions Supporting Exchange”. In Claude Ménard and Mary M. Shirley (Eds.). Handbook of New Institutional Economics. Berlin: Springer-Verlag, pp. 747-785.
■ Przeworski, Adam and Fernanco Limogi (1997). “Modernization: Theories and Facts”. World Politics; V.49-#1, pp. 155-183. (optional)
■ Boix, Carles and Susan Stokes (2003). “Endogenous Democratization”. World Politics; V.55-#4, pp. 517-549. (optional)

■ Ziblatt, Daniel (2006). “How Did Europe Democratize”. World Politics; V.58-#2, pp. 311-338. (optional)

Topic II. Taming the Market?: The Golden Age in History

● 1/27-1/29, The Golden Age of Embedded Liberalism

■ Shonfield (1965). “The Argument in Brief”. Chapter IV in Modern Capitalism. London: Oxford University Press, pp. 61-67. [ERes].\

■ Eichengreen, Chapters 1 & 2

■ Pontusson, Chapter 1

● 2/3-2/5, The Foundation of the Golden Age

■ Eichengreen, Chapters 3, 4, & 6

● 2/10-2/12, Trouble in Paradise

■ Eichengreen, Chapters 7-9

Topic III. The Political Economy of the Golden Age

● 2/17-2/19, Frameworks for Analysis

■ Soskice, Chapter 4 in KLMS

■ Pontusson, Chapter 2

■ Iversen, Chapters 1 & 2

No Class: 2/24 (Mardi Gras break)

Midterm Exam: 2/26

● 3/3-3/5, Labor Markets and Income Distribution

■ Pontusson, Chapters 3 & 4

■ Freeman, Richard and James Medoff (1979). “The Two Faces of Unionism”. Public Interest; #57, pp. 69-93

■ Golden, Wallerstein & Lange in KLMS

■ L. Calmfors and J. Driffill (1988). “Bargaining Structure, Corporatism and Economic Performance”. Economic Policy; #6, pp. 14-61. (Optional)

■ Nickell, Stephen, Luca Nunziata and Wolfgang Ochel (2004). “Unemployment in the OECD Since the 1960s. What Do We Know?”. Economic Journal; V.115-#500, pp. 1-27. (Optional)

■ Baccaro and Diego Rei (2007). “Institutional Determinants of Unemployment in OECD Countries: Does the Deregulatory View Hold Water?”. International Organization; V.61-#3, pp. 527-569.(Optional)

● 3/10-3/12, Macroeconomic Policy

■ Blinder (1987). Chapters 2 & 3 from Hard Heads, Soft Hearts: Tough-Minded Economics for a Just Society. Reading: Addison-Wesley, pp. 32-108. [ERes]

■ Torben Iversen and David Soskice (2006). “New Macroeconomics and Political Science”. Annual Review of Political Science, V.9, pp. 429-453.

■ Pontusson, Chapter 5

● 3/17-3/19, Redistributive Policy, 1

■ Pontusson, Chapter 6

■ A&G, Chapters 2-4

■ Torben Iversen and David Soskice (2006). “Electoral Institutions and the Politics of Coalitions: Why Some Democracies Redistribute More than Others”. American Political Science Review;. V.11-#2, pp. 165-181.

No Class, 3/24-3/26 (Spring break)

● 3/31-4/2, Redistributive Policy, 2

■ A&G, Chapters 5-7

■ Pontusson, Chapter 7

■ Pontusson (2006). “Review Essay: The American Welfare State in Comparative Perspective,” Perspectives on Politics, V.4-#2, pp. 315-326.

● 4/7-4/9, Social Risk and Redistribution

■ Iversen, Chapters 3-5

■Journal of Labor History (2006). “Symposium on Iversen's Capitalism, Democracy and Welfare”. Journal of Labor History; V.47-#3, pp. 397-449. (optional)

Topic IV. Globalization, Post-Modernization and Transformation

● 4/14, Globalization and Post-Modernism?

■ Simmons, in KLMS

■ Klausen, in KLMS

■ Obstfeld (1998). “The Global Capital Market: Benefactor or Menace?”. Journal of Economic Perspectives; V.12-#4, pp. 9-30. (Optional)

■ Garrett, Geoffrey (1998). “Global Markets and National Politics: Collision Course or Virtuous Circle?”. International Organization; V.52-#4, pp. 787-824. (Optional)

● 4/16, Globalization and Fiscal Policy

■ Steinmo, Sven (1994). “The End of Redistribution? International Pressures and Domestic Tax Policy Choices”. Challenge; V.37-#6, pp. 9-18.

■ Garrett, Geoffrey (2001). “Globalization and Government Spending Around the World”. Studies in Comparative International Development; V.35-#4, pp. 3-29.

■ Stewart, Kenneth and Michael Webb (2006). “International Competition in Corporate Taxation: Evidence from the OECD Time Series”. Economic Policy; V.21-#45, pp. 153-201.

● 4/21, Globalization and National Politics: Preferences

■ Esping-Andersen, in KLMS

■ Kriesi, in KLMS

● 4/23, Globalization and National Politics: Organization

■ Kitschelt, in KLMS

■ Kersbergen, in KLMS

■ King and Wood, in KLMS

● 4/28, Retrenchment/Convergence

■ Eichengreen, Chapters 11-13

■ Pontusson, Chapter 8

■ Iversen, Chapter 6

■ Iversen, Torben and Thomas Cusak (2000). “The Causes of Welfare State Expansion: Deindustrialization or Globalization?”. World Politics; V.52-#3, pp. 313-349. (Optional)

■ Hicks, Alexander and C. Zorn (2005). “Economic Globalization, the Macroeconomy, and Reversals of Welfare Expansion in Affluent Democracies, 1978-1994”. International Organization; V.59-#3, pp. 631-662. Optional [errata: http://www.sociology.emory.edu/ahicks/IOErrataAndRevisions.pdf ]

● Retrenchment: The Social Democratic and Christian Democratic Cases (optional topic)

■ Moene and Wallerstein, in KLMS

■ Ponstusson, Jonas and Peter Swenson (1996). “Labor Markets, Production Strategies and Wage-bargaining Institutions: The Swedish Employer Offensive in Comparative Perspective”. Comparative Political Studies; V.29-#2, pp. 223-250. [Revised version in Iversen, Pontusson and Soskice, eds., Unions, Employers and Central banks, 75-106.]

■ Huber, Evelyne and John Stephens (2002). “Globalisation, Competitiveness, and the Social Democratic Model”. Social Policy and Society; V.1-#1, pp. 47-57.

■ Steinmo, Sven (2003). “Bucking the Trend: Swedish Social Democracy in a Global Economy”. New Political Economy, V.8-#1, pp. 31- 48.

■Streeck, Wolfgang and Christine Trampusch (2006). “Economic Reform and the Political Economy of the German Welfare State”. in Kenneth Dyson and Stephen Padgett (eds.): The Politics of Economic Reform in Germany. London und New York: Routledge. 60-81.

Final Exam: Wednesday, 6 May, 1:00-5:00pm