Chapter One: Understanding International

Relations
1.1. Conceptualizing Nationalism, Nations and States

What is a nation?
 ‘nations are historical entities that evolve organically out of more
similar ethnic communities and they reveal themselves in myths,
legends, and songs (Heywood, 2014).
 A nation, in contrast to a state, constitutes a community of people
joined by a shared identity and by common social practices.

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 A nation, perceives itself to be a distinctive
political community.
 A nation, unlike ethnic groups, has collective
political aspirations.
 These aspirations have traditionally taken the
form of the quest for, or the desire to
maintain, political independence or
statehood.

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 What is nationalism?
 nationalism is the doctrine that asserts the nation
as the basic political unit in organizing society.
 It has caused the outbreak of revolutions and wars
across the globe.
 It is noted as a factor for the collapse of age old
empires, marker for new borders, a powerful
component for the emergence of new states and it
is used to reshape and reinforce regimes in history.

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 The revolutions that took place in Britain’s North
American colonies in 1776, and in France in
1789, provided models for other nationalists to
follow.
 Nationalism in the first part of the 19thC was a
liberal sentiment concerning self-
determination
 The idea of self-determination undermined the
political legitimacy of Europe’s empires.
 Everywhere the people demanded the right to
rule themselves/inclusion in the political
system .
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• In 1861 Italy too – long divided into
separate city-states and dominated by
the Church-became a unified country and
an independent nation.
• Yet it was only with the conclusion of the
First World War in 1918 that self-
determination was acknowledged as a
right.
• After the First World War most people in
Europe formed their own nation-states.
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 1.2. Understanding International Relations

What is international relations?

 Two ways of defining international
relations
A. As a field of study:
• The conventional definition of the field IR
is:
– the study of the relations of states, and
that those relations are understood
primarily in diplomatic, military and
strategic terms
• International relations as a discipline thus
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chiefly concerned with what states do on
• IR is that branch of Political Science
that deals with interactions
between state and non-state
actors in the international system
(Goldstein, 2010).

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• It is thus the field or body of
knowledge that examines the
totality of human relations
across national boundaries.
• IR is therefore an expansive field of
knowledge.

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• IR as a discipline started after the end of
WWI at the University of Wales in 1919.
• Then, it came a distinct department or
course of study.
Why the study of international relations
appeared after the First World War?
• The desire to avoid war in the future
after the First World War determined the
initial direction of the International
Relations field of study.
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B. As an activity/situation
• IR describes the state of interaction
between two or more actors in
separate national boundaries.
• Put differently, it describes the
relationships that take place by
members of the international
community.

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• Describe a range of interactions between people,
groups, firms, associations, parties, nations or
states or between these and (non) governmental
international organizations.
• These include all or any aspects of their relationship
such as:
 War
 Separation
 Belligerency
 Settlement
 Treaties
 Cooperation
 Organization
 Going on holiday abroad
 Sending international mail
 Buying or selling goods abroad
 International conflict
 Inter-national conferences on global warming
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 International crime
Participation in international relations or
politics is also inescapable.
No individual, people, nation or state can exist
in splendid isolation or be master of its own
fate.
No matter how powerful in military, diplomatic
or economic circles
None can maintain or enhance their rate of
social or economic progress without the
contributions of foreigners or foreign states.
Each state is a minority among humankind.

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 Legal, political and social differences
between domestic and international politics.
 Domestic-obeyed, sanction, monopoly of force
 International- self-help, no common enforcement.
 Distinction between domestic and international
politics is real but declining
 Domestic incidents can feature very prominently on
the international political agenda.
 And thus lead to foreign policy changes and
commitments.
 Example: Severe Acute Respiratory Syndrome (SARS)
and Avian Flu

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Studying international relations provides
the necessary tools to:
 Analyze events
 Examine the why, where, what and when
 Understand the factors that led to a particular
outcome and the nature of the consequences.
 Gain a deeper comprehension of some of the
problems that policy-makers confront
 Understand the reasoning behind their
actions.

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International politics is also about
maintaining international order.
Anarchical world
Political power is not centralized and
unequal.
Multiplication of independent states.
There is one IO for almost every
activity
Continuing growth of governmental
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and international services.
 1.3.Evolution of International Relations

 In medieval Europe:
 Most of life was local and most political power was
local too. At the local level there was an enormous
diversity of political entities: FLs
 There were two institutions with pretensions to
power over the continent as a whole – the (Catholic)
Church and the Empire.
 The Church:
 Was the spiritual authority with its centre in Rome.
 Virtually all Europeans were Christian
 Its influence spread far and penetrated deeply into
people’s lives.
 Occupied a crucial role in the cultural and intellectual
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 The Empire:
 Known as the Holy Roman Empire
 Established in the tenth century in central, predominantly
German-speaking, Europe.
 It also included parts of Italy, France and today’s Netherlands
and Belgium.
 Holy Roman Empire is best compared to a loosely structured
federation of many hundreds of separate political units.
 The political system of medieval Europe was thus
a curious combination of the local and the
universal.

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Yet, from the fourteenth century onward this
system was greatly simplified as the state
emerged as a political entity located at an
intermediate level between the local and the
universal.
 The new states simultaneously set
themselves in opposition to popes and
emperors on the universal level, and to
feudal lords, peasants and assorted other
rulers on the local level.
 Italy, Germany, France, England,
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In the sixteenth century:
 With Reformation notion of a unified Europe
broke down completely as the Church began to
split apart.
 Followers of Martin Luther had formed their own
religious denominations which did not take
orders from Rome.
 Instead the new churches aligned themselves
with the new states.
 By supporting the Reformation, they could free
themselves from the power of Rome.
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States were not only picking fights with
universal institutions but also with local
ones.
 The kings rejected the traditional claims of all
local authorities
 This led to extended wars
 Peasants rose up in protest against taxes
and the burdens imposed by repeated wars.
 Germany in the 1520s; Sweden, Croatia,
England and Switzerland in the late 17th C. In
France nobilities in the mid-17th C.
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From the sixteenth century
onwards:
States established the rudiments of
an administrative system and
raised armies states.
Extract resources from society for
state building
Provided defense and a rudimentary
system of justice.
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The Treaty of Westphalia, 1648
 Concluded the 30 years of warfare
 Independent both of the pope and the emperor
 Symbolize the new way of organizing
international politics.
 International politics was a matter of relations
between states and no other political units.
 All states were sovereign, and formally equal
 No overarching power.

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 Sovereignty and formal equality led to the problem of
anarchy.
 The practices of diplomacy soon expanded to avoid
misunderstandings and unnecessary conflicts.
 This diplomatic network provided a means of gathering
information, of spying, but also a way of keeping in touch
with one another, of carrying out negotiations and
concluding deals.
 Diplomatic immunities
 However, diplomatic practices were never powerful
enough to prevent war
₪ It was the European model of statehood and the European
way of organizing international relations that eventually
came to organize all of world politics. 23
Nineteenth century:
 Relations between Europe and the rest of the
world were irrevocably transformed.
 B/c economic changes taking place in
Europe.
 Europeans began looking for new markets
overseas.
 Colonial possessions became a symbol of
‘great power’ status
 During First World War in 1914, most parts of
the world were in European hands.
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 It was through the process of liberating
themselves that the European models were
copied.
 Europeans only would grant sovereignty to states
that were similar to their own
 To create such Europe-like states was thus the
project in which all non-European political leaders
engaged.
 They had their respective Territories and fortified
Border, their own Capitals, Armies, Foreign
Ministries, Flags, National Anthems, and all the
other paraphernalia of European statehood.
This, briefly, is how the modern world was
made. 25
 1.4. Actors in International Relations

1.4.1. State Actors

State actor includes the individual
leader as well as bureaucratic
institutions i.e. Foreign minister.
The birth of modern stated could be
traced back the 17th C Europe.
There are five statehood criteria.
Accordingly, there are no fewer than
195 states
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States are different in terms of their internal
diversity, wealth, population and
geographical area. These differences have
their own impact and implication on the
international relations of states.
• Military power of states- ranges from the
superpower status of the USA with its long-
range missiles and air craft carriers to small
entities such as Bhutan and Nepal.
– Size and quality of the armed force
– Quantity of the weapon
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• Ideological Differences-
– This is especially true during the Cold War era.
• Wealth difference
– Its self-sufficiency
– Its capacity to provide food, clothing, shelter to its
people
– Main source of wealth (agrarian/industrial)
• Population Size and growth difference
– China vs. Vanuatu
• Territorial Size difference
– Location, climate, size, landlocked, desert

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International Relations (IR) traditionally
focused on interactions between states.
 But now, all sorts of entities
 Notwithstanding this, all states call
themselves ‘sovereign’:
– exclusive right to govern their respective
territories
– declaring war, concluding a peace, negotiating
a treaty
 Thus still, they remain leading actors in
international politics
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1.4.2. Non-State Actors
They are non-sovereign entities
participating in the international
relations.
They participate with sufficient
power to influence/cause change
though not belong to any established
institution of a state.
Global firms, IGOs, NGOs,MNCs,
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 The majority of global interactions – be they
related to global finance, production, education,
personal and professional travel, labor migration
or terrorism – no longer occur via state
channels
 A shift away from the inter-national (‘between-
states’) to the ‘trans-national’ (‘across/beyond-
states’ and their borders).
 ‘International Relations’ is no longer a suitable
label and that we should instead refer to the
discipline as ‘Global Studies’ or ‘World
Politics’ (Keohane 2016)
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 Individuals and groups interact across
borders
 International commercial aviation and the
rapid spread of information technologies has
further increased people’s mobility and the
rate of interactions occur across and
beyond state borders.
 High-speed internet have not only changed
lives at personal and community levels but
also dramatically altered the general
dynamics in politics and global affairs.
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Social media provide accessible
platforms of communication that
allow for the projection and
promotion of ideas across borders
Various political agendas:
progressive, revolutionary or outright
dangerous
Political activity and even
confrontation become weightless
and immaterial 33
• So, non-state sctors are:
• Individual:
– Desmond tutu- Against apartheid
– Mother Teresa- Charity
– Mahatma Ghandi-
– Nelson Mandela-
• International organizations:
– IGOs
– INGOs
• Multinational corporations
– Toyota
– Sony
– McDonalds
– Coca Cola
• Terrorist organizations
– Al Qaida
– Boko haram
– ISIS
– Al shabab 34
 1.5. Levels of Analysis in International
Relations
• LA are perspectives that deal with the cause of what
makes something happen in international relations.
• Again deal with the origin of that cause.
• Perspectives on IR that suggest possible explanations
to ‘‘why’’ questions.
• Ways of analyzing how foreign policy decisions are
made
• Have you ever thought that a single international
political phenomenon can be analyzed at different
levels?
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 1.5.1. The individual level
Begins with the view that it is people who make
policy.
Every international event is the result of
decisions made by individuals.
Great leaders influence the course f history
Concerns with the perceptions, choices,
behaviors, motivations, beliefs and orientation of
the individual
Concerns with the implications of human nature
Psychology and emotions behind people’s actions
and decisions
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• Idiosyncratic characteristics of leaders:
– Personality
– Physical and mental health
– Ego and ambition
• Accordingly: one may analysis
– WWII- based on the role of Hitler
– End of cold-war- based on the role of
Gorbachev
– Ethio-Eritrea war-based on the role of Issayas
and Meles
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1.5.2. The group level
The role of lobbying groups and the
way they influence national decision-
making on an issue.
The actions of groups of individuals:
o All voters of a country
o Political parties
o Social movements
o Activist/Pressure groups

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 1.5.3. The state level
 State remains as the dominant unit of analysis
 This is the ‘state-centrism’ of the discipline
 Point of reference for other types of actors
Why?
 State being the main location of power within the international
sphere.
 States form the primary kind of actor in major international
organizations
 They feature prominently in the global discourse on most of
the major challenges of our time
 States still hold the monopoly on violence
 The state as a unit of analysis and frame of reference will
certainly not go away any time soon
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• Internal organization of states is the key to
understand war and peace
• Locates the cause in the in the character of
domestic system of specific states.
• Uses internal defects of a state to explain its
external act.
• Deals with how a country’s political
structure and the political forces and sub-
national actors with in a country influences
the foreign policy of its government.

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Regime type indicates the way states
interact with other states in the
international system.
– Democratic regimes:
• Do not go to war
• Go to war only for just causes
• Encourages mutual trust and respect.
– Authoritarian
• Foreign policy will be centered in a narrow
segment of the government.
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Each country’s foreign policy tends to reflect
its political culture
 A society’s widely held traditional values and its
fundamental practices that are slow to change.
 Leaders tend to formulate policies that are
compatible with their society’s political culture
 How people feel about themselves and their
country, how they view others, what roles they
think their country should play in the world, and
what they see as moral behaviour.
 Example: American exceptionalism &
Sinocentrism.
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Thus, a state level analysis might be
interested to look at any one of the following:
how states interact with each other to deal with
the crisis / their foreign policy
how they build off each other’s suggestions and
react to international developments and
trends
how they cooperate, say, in the framework of
international organizations
how we look at them as competitors and
antagonists

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Careful consideration of:
what kinds of states we are looking at
(how they are ordered politically),
 their geographical position,
 their historical ties and experiences,
and
their economic standing.

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 1.5.4. The system level
 Conceive the global system as the structure or context
within which states cooperate, compete and confront
each other over issues of national interest.
 The level above the state
 This level of analysis involves a top down approach to
the study of world politics.
 It examines state behavior by looking at the
international system.
 In this level of analysis, the international system is the
cause and state behavior is the effect.
 Changes in international system also causes change in
state behavior
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 Focus on the external constraints on foreign
policy.
 Global circumstances are seen to condition the
ability and opportunity of individual states and
groups of states to pursue their interests in
cooperative or competitive ways
 Balance of power between states and how that
determines what happens in global politics.
 Developments that are even outside the
immediate control of any particular state or group
of states: global economy, transnational terrorism
or the internet.
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• The anarchic nature of the international
system
– Self-help
– No international 911 to call for help
– This compels states to have military
• Distribution of power amongst states:
– Unipolarity: relative peace
– Bipolarity: conflict/unavoidably worry of one another
– Multipolarity: limited conflict
• Economic pattern:
– Economic interdependence
– Natural location and use
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 1.6. The Structure of
International System
 Political power is usually distributed into three main types of systems namely: (i)
unipolar system, (ii) bipolar system and,(iii) multipolar system.
A. Unipolar system:
 In a unipolar international system, there is one state with the greatest political,
economic, cultural and military power and hence the ability to totally control other
states.
• It is a system dominated by one super power/empire.
• The hegemonic actor prevents or resolves conflicts by serving as “the Police Agent of
the World.”
• The distribution of power is determined by the single super power.
• Power structure is hierarchical in that power is concentrated in the hands of one
powerful nation/empire.
• The hegemon assures international order and stability through punishing violators and
giving rewards to obedient actors.
• No alliances exist because the hierarchy is ruled by one centre of power.
• Example: US after the end of Cold War.

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B. Bipolar System
 This is a system dominated by two contending super powers which
in turn dominate other states and the international system at large.
 There are two coalitions/alliances formed and headed by the two
super powers.
 Alliances are hierarchically organized with the two powers as the
leaders of their respective alliance.
 There is conflict between the two coalitions/blocs and especially
between the bloc leaders.
 In both bipolar and multipolar systems there is no one single state
with a preponderant power and hence ability to control other states.
 Example: US and USSR during Cold War.

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C . Multipolar System
• This comprises of four or more powerful actors in the
international system with relative equal political, economic
and military powers.
• There is no significant hierarchy among actors.
• Multipolar configuration reached its climax in 1700s and
1800s
• It lasted from the treaty of Westphalia (1648) to mid-
twentieth century,
• Example: Great Britain, France, Germany, Austria-Hungary,
Russia and other European countries dominated the globe.
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 Power
 Power is the currency of international politics.
 Power determines the relative influence of actors and it
shapes the structure of the international system
 Power is the blood line of international relations.
 Power can be defined in terms of both relations and
material (capability) aspects.
 The relational power: ‘A’s’ ability to get ‘B’ to do
something it would not otherwise do.
 Example: US vs. Russia
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 Anarchy
 Absence of authority (government) be it in
national or international/global level systems.
 Power is decentralized and there are no shared
institutions with the right to enforce common rules.
 Everyone looks after themselves.
 States had to rely on their own resources or to
form alliances
 Constant tensions and threats of war
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 Sovereignty: two dimensions
 Internal sovereignty: a state’s ultimate
authority within its territorial entity.
 Independence/freedom in its domestic affairs
 External sovereignty: the state’s involvement
in the international community.
Autonomy in foreign policy

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 1.7. Theories of International Relations
 1.7.1. Idealism/Liberalism
o Referred to as a ‘utopian’ theory
o From 1919 to the 1930s, the discipline was dominated by what is
conventionally referred to as liberal internationalism
 Human nature:
o View human beings as innately good
o Capable of mutual aid and cooperation
o Bad human behaviour is the product not of evil people but of
institutions
o If properly organized, they could see what they have in common,
put in place laws and rules to reduce conflict and facilitate
cooperation.
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Cooperation/Peace:
o War is unnatural
o War can be eliminated.
o Peace/cooperation is the normal state of affair
o Believe peace and harmony between nations is not only
achievable, but desirable
o Optimistic that world order can be improved, with peace
and progress gradually replacing war.
o There is a greater potential of cooperation among states,
even if the international system is anarchic.
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 International law(IL):
o Liberals also argue that international law offers a
mechanism by which cooperation among states is made
possible.
• IL performs two different functions.
1) To provide mechanism for cross-border interaction,
2) To shape the values and goals these interactions are
pursuing.
o Generally, the purpose of international law is to regulate
the conducts of government and the behaviors of
individuals within states.
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 Democracy and free trade:
o It suggested that ‘the prospects for the elimination of war lay with a preference for
democracy over aristocracy, free trade over autarky, and collective security over
the balance of power system’
 Democracy:
o Wars are created by militaristic and undemocratic governments for their own
vested interests
o Democracy breaks the power of ruling elites and curb their propensity for violence.
o Kant states that shared liberal values should have no reason for going to war
against one another.
o Liberal states are ruled by their citizens and citizens are rarely disposed to desire
war.
o Democratic peace theory, which posits that democracies do not go to war with
each other.
o Mutual trust and respect.

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Free trade:
- Encourage international friendship and
understanding
- Create mutual interdependence and thereby
reduce conflict
- Economic interdependence makes conflict/war
threatening to each side’s prosperity

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 International organization:
o War and injustice are international problems that require
collective/multi-lateral efforts.
o Woodrow Wilson, following World War I, in his famous ‘fourteen
points’ speech, argued that ‘a general association of nations must be
formed’ to preserve the coming peace.
o This resulted in the establishment of League of Nations in 1919.
o League of Nations would be the guarantor of international order and
would be the organ through which states could settle their difference
through arbitration.
o League collapsed due to the outbreak of the Second World War in 1939.
o Thus, liberalism failed to retain a strong hold and a new theory
emerged to explain the continuing presence of war.

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 1.7.2. Realism
 Liberal internationalist ideals seemed, at the outset of the
1930s and ultimately the outbreak of the Second World War,
futile and utopian.
 The ‘idealism’ of the interwar period was henceforth to be
replaced by realism.
 Realism locates its roots further back, citing Thucydides,
Machiavelli and Hobbes.
 Realism in the modern sense arose as a critique to liberalism.
 And, realism gained momentum during the Second World War

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 E.H. Carr’s ‘Twenty Years’ crisis’, published in 1939.
 He presented the fact-value distinction, which separates the ‘what
is’ from the ‘what ought to be’
 Hans Morgenthau: ‘Politics among Nations’ (1948)
 For him, there are objective laws which have universal applicability,
‘international politics, like all politics, is a struggle for power’.
 According to him theories of international relations must be
consistent with the facts.
 Morgenthau, like other realists, hence assumes a clear separation of
fact and value, of theory and practice.
 By the late 1950s and into the 1960s we see a discipline dominated
by realist conceptions of international relations

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 Human nature:
• Man is flawed and therefore prone to conflict.
• This explains why cooperation is never guaranteed and world
government is unachievable.
• Conflict and are rooted in human nature.
• They believe conflict is unavoidable and perpetual and so war is
common and inherent to humankind.
• They claim individuals act in their own self –interests.
• Stress human nature as the factor that shapes world politics.
• Human nature is immutable.
• Thus, little hope for progress in international relations.
• State, like human beings, has an innate desire to dominate others, which
led them to fight wars.
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 International system
• International system is ‘anarchic’.
• World is made up of states that exist in an environment of
anarchy.
• World is a dangerous jungle full of predators.
• ‘No one to call’ in an international emergency helps
• Therefore, states can ultimately only rely on themselves.
• States should rely on their own means of security, i.e.,
power.
• This is related with the bad nature of human beings.
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Power:
The primary task of states is to promoting their
national interests:
IN is whatever that enhances or preserves a
state’s security, its influence, and its military
and economic power.
Power is the key to national survival in a
country-eat-country world.
“Might makes right”
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 Realists, therefore, are bold to state that stability can
be achieved, if states accumulate more power or
build their capability.
 The best way to maintain the peace is to be
powerful: “peace through strength.”
 It is necessary for a country to be armed as the world
dangerous.
 States have to be ready for war, in order to maintain
peace.
 Unbalanced power is dangerous
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Balance of power:
o Countries should practice balance-of-power politics.
o This is to achieve an equilibrium of power in the
world in order to prevent any other country or
coalition of countries from dominating the system.
o This can be done through:
 Building up your own strength
 Allying yourself with others
 Dividing your opponents

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Scepticism about IOs, IL, principles, morality,...
 Rules are for weak
 IOs and ILs have no power/force
 Moral concerns should not guide foreign policy
 Morality must be weighed prudently against NI
 Political actions must be inspired by the moral principle
of national survival.
 The highest moral duty of a state is to do good for its
citizens.
 “Do good if the price is low”.
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Kenneth Waltz’s ‘Man, the state and War’ (1959)
o He focuses on the international system itself and
seeks to provide a structuralist account of its
dynamics and the constraints it imposes on state
behaviour
o For Waltz, the international system is anarchical
o And hence perpetually threatening and conflictual.

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• Waltz and his followers conceived of international
politics as a struggle for power, wealth, or security.
• And thus the anarchic structure of the international
system was the most important determinant of state
behaviour.
• Put differently, states’ fear for survival is not rooted in
human nature, as classical realists believed, but has its
origins in the institutional configuration of the
international system.
• Waltz argues “International anarchy is the
permissive/underlying cause of war.”
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• Neo-realists have little room in the world for
cooperation than realists.
• When cooperation does occur, power relationships
are at work within the cooperative arrangements.
• The more powerful states take larger share of any
joint share (relative gains) that flows from the
cooperation.
Both liberalism and realism consider the state to be
the dominant actor in IR, although liberalism does
add a role for non-state actors such as Ios.
70
 1.7.3. Structuralism/Marxism
• Marx began with belief that free market system was an
aberration and has to be destroyed by revolution.
• Capitalism is the central cause of international conflict.
• For Marx, capitalism is characterized by two major divisions
within society: the ‘bourgeoisie’ and the ‘proletariat’.
• Actors of International Relations are the classes.
• Classes are more important than society and states.
• There is nothing as such like national interest.
• But states reflect the interests of the dominant/rich class.

71
• The role of the state-States as “Executive Committee of the
Ruling (Corporate) Class,” doing the bidding of
corporations.
• Ensuring overall stability of global capitalist economy as
the roles of the state.
• International cooperation among the working
class/proletariat will eventually bring about a just and fair
international system where everyone equally benefits.
• There could not be peace in the world unless the proletariat
class wages proletarian internationalism and seizes power.

72
• There is no anarchy; rather there is hierarchy in
international system.
• This is to mean that some states (dominant classes
within them) dominant other states and peoples of
the world.
• States are unfinished but categorized into different
classes that also dominate the international system.
• Economic power is the most crucial power to
dominate others.

73
 Emerged as a critique of both realism and pluralism
 Concentrated on the inequalities that exist within the
international system
 In equalities of wealth between the rich ‘North’ or the
‘First World’ and the poor ‘South’ or the ‘Third World’.
 Focused on dependency, exploitation and the
international division of labor which relegated the vast
majority of the global population to the extremes of
poverty, often with the complicities of elite groups
within these societies.

74
 As many in this tradition argued, most states were
not free.
 Were subjugated by the political, ideological and
social consequences of economic forces.
 The basis of such manifest inequality was the
capitalist structure of the international system
 Creates center-periphery relations
 Networks of economic interdependence viewed as
the basis of inequality, the debt burden, violence and
instability.
75
1.7.4. Constructivism
o One of the most popular approaches in 1990s and 2000s
o The three main proponents: Kratochwil, Onuf, and Wendt.
o A “social theory of international politics” that
emphasizes the social construction of world affairs
o The major thesis of constructivism is that the
international system is “socially constructed”.
o It considers international politics as a sphere of
interaction which is shaped by the actors’ identities and
practices and influenced by constantly changing
normative institutional structures.
o Actors are intrinsically “social” beings whose identities
and interests are the products of inter-subjective social
structures. 76
ACTORS AND STRUCTURES ARE
MUTUALLY CONSTITUTED
• This implies that structures influence agents
and that agents influence structures.
• Agents (individuals, groups, states) create
structures (rules, IOs and images), which
reciprocally impact the agents’ action.
• Meaning, agents and structures are co-
constituted through reciprocal interaction.

77
• The social relation of enmity between US and
North Korea represents the intersubjective
structure (that is, the shared ideas and beliefs
among both states).
• U.S and North Korea are actors who have the
capacity to change or reinforce the existing
structure or social relationship of enmity.
• This change or reinforcement ultimately depends
on the belief and ideas held by both states.
• If these beliefs and ideas change, the social
relationship can change to one of friendship.

78
CONSTRUCTIVISM AND ANARCHY
• For neorealists: “anarchy” is a determining
condition of international system that by itself:
– Makes competition and conflict endless strong
possibilities
– Makes the International System (IS) a more
conflictual than a peaceful environment.
• But, for constructivists anarchy alone does not
make much sense as it cannot by itself bring about
a predetermined state of affairs among state actors.
• Rather, we can have different social structures
and arrangements under anarchy: cooperative or
conflictual.
79
• Anarchy is indeterminate.
• Anarchy is neither necessarily conflictual nor
cooperative.
• As Wendt puts it, “anarchy is what states make of it”.
• If states show a conflictual behavior towards each other, the
“nature” of international anarchy appears to be conflictual.
• If they behave cooperatively towards one another, anarchy
appears to be cooperative.
• Therefore, there is no pre-given “nature” to international
anarchy.
• It is the states themselves that determine anarchy’s
nature.
• Thus, to understand conflict and cooperation in
international politics, we must focus upon what states do
• What states do depends on what their identities and 80
interests are, and identities and interests change.
• Identities and interests in international politics are not
stable – they have no pre-given nature
• Anarchy has no a fixed/constant nature.
• It varies as the identities and interests of states are
changed.
• Identities and preferences of international actors are
shaped by the social structures that are not fixed or
unchanging.
• Gives due emphasis to social relationships in the
international system.
 The essence of international relations exists in the
interactions between people.
 IR is, then, a never-ending journey of change
chronicling the accumulation of the accepted norms of
the past and the emerging norms of the future. 81
IDENTITIES AND INTERESTS IN WORLD
POLITICS
• Identities are necessary, in international politics
and domestic society alike, in order to ensure at
least some minimal level of predictability and
order.
• A world without identities is a world of chaos, a
world of pervasive and irremediable
uncertainty, a world much more dangerous
than anarchy.
• Identities perform three necessary functions in a
society:
– they tell you and others who you are and 82
• The identity of a state implies its preferences
and consequent actions.
• Example: the identity of a small state implies a
set of interests that are different from those
implied by the identity of a larger state.
• Small states may more focus on its survival
whereas the larger state is concerned with
dominating global political, economic and
military affairs.
• A state understands others according to the
identity it attributes to them, while
simultaneously reproducing its own identity
through daily social practice. 83
• The crucial observation here is that the producer of
the identity is not in control of what it ultimately
means to others.
• The intersubjective structure is the final arbiter
of meaning.
• Example: Soviet Union
• Soviet control over its own identity was
structurally constrained not only by East
European understanding, but also by daily
Soviet practice.
• Unlike neoreaism, constructivism assumes that the
selves, or identities, of states are a variable; they
likely depend on historical, cultural, political, and
social context. 84
• Our identities – who we are – change, as do
our interests – what is important to us.
• We are not exactly who we were yesterday,
and we are unlikely to be exactly the same
tomorrow.
• Thus, identities and interests in international
politics are not stable – they have no pre-
given nature.

85
THE POWER OF PRACTICE
• Power is a central element for both mainstream and
constructivist approaches
• However, their conceptualizations of power are vastly
different.
• For neorelism and neoliberalsm material power
(military/economic or both) is the single most
important source of influence and authority in global
politics.
• For constructivists, both material and discursive
power are necessary for any understanding of world
affairs.
• They believe in the power of discourse: knowledge,
ideas, culture, ideology, and language.
• Powers is more than brute force. 86
• Actors are capable of constructing and
reproducing the political world not just by their
military actions but also through their discourses.
• The key is the way we communicate (speak and
write) and think about the world.
• Language calls things into existence.
• Examined the role of “language,” “speech,”
and “argument” as a key mechanism of social
construction.
• Nicholas Onuf argues that “talking is
undoubtedly the most important way that we
go about making the world what it is”
• “Language makes us who we are” 87
• The power of social practices lies in their
capacity to reproduce the intersubjective
meanings that constitute social structures and
actors alike.
• The U.S military intervention: great power,
imperialist, enemy, ally, and so on.
• Social practices not only reproduce actors
through identity, but also reproduce an
intersubjective social structure through
social practices.
• Social practice has the capacity to produce
predictability and order.
88
THE ROLE OF INTERNATIONAL
INSTITUTIONS
• Some constructivist scholars have focused on
“the role of international organizations in
disseminating new international norms and
models of political organization”
• International organizations do produce and
promote new norms, and even “teach” states.
• International institution plays a socializing role.
• They are important venue for socialization.

89
• According to constructivists, international
institutions have both regulative and constitutive
functions.
• Institutions embody the constitutive and regulative
norms and rules of international interaction; as such,
they shape, constrain, and give meaning to state
action and in part define what it is to be a state.
• There is a connection between normative changes
and state identity and interests.
• At the same time, however, institutions themselves
are constantly reproduced and, potentially, changed
by the activities of states and other actors.
• Institutions and actors are mutually conditioning
entities. 90
 1.7.5. Critical Theories
 Critical approaches refer to a wide spectrum of theories
that have been established in response to mainstream
approaches in the field, mainly liberalism and realism.
 Has become influential in international theory since early
1980s
 Share one particular trait- – they oppose commonly held
assumptions in the field of IR that have been central since
its establishment.
 Influential figures: Andrew Linklater and Robert Cox
 Critical theories are valuable:
– Because they identify positions that have typically been ignored
or overlooked within IR.
– They also provide a voice to individuals who have frequently
been marginalized, particularly women and those from the
Global South. 91
• CT sought to inquire into the possibilities of
transforming IRs in order to remove
unnecessary constraints on achieving
universal freedom and equality.
• It intends to analyze and overcome the social
structure which result in abuses.
• IRs should be oriented by an emancipatory
politics.
• The desire ‘to lend a voice to suffering’ and
to ‘abolish existing misery’ should stand at
the center of political analysis.
92
• Concerned with all the features of
domination.
• Critical of the main forms of exclusion in
world history (national, racial, gender, etc.)
• An attempt to make their history under
conditions of their choosing.
• Removal of domination, promotion of global
freedom, justice, equality are the driving
forces of CT.
• The aim of CT is to advance human
emancipation.
93
 Critical theorists who take a Marxist angle:
– Are against the internationalization of the state
as the standard operating principle of international
relations
– B/c this led ordinary people around the globe
becoming divided and alienated, instead of
recognizing what they all have in common as a
global proletariat.
– To address this, the legitimacy of the state must
be questioned and ultimately dissolved.
– Emancipation from the state in some form is
often part of the wider critical agenda.

94
 Post-colonialism differs from Marxism by
focusing on the inequality between nations
or regions, as opposed to classes.
– This approach acknowledges that politics is not
limited to one area or region and that it is vital to
include the voices of individuals from other parts
of the world.
– Focuses on including the viewpoints of those from
the Global South to ensure that Western scholars
no longer spoke on their behalf.
– Postcolonial scholars are, therefore, important
contributors to the field as they widen the focus of
enquiry beyond IR’s traditionally ‘Western’
mindset. 95
 Marxists would argue that:
– Any international body, including the UN,
works to promote the interests of the
business class.
– After all, the UN is composed of states who
are the chief protagonists in global capitalism.
– The UN, then, is not an organization that
offers any hope of real emancipation for
citizens.
– UN legitimizes a system of perpetual state-
led exploitation.

96
 Post-colonialists would argue that:
– The discourse perpetuated by the UN is one
based on cultural, national or religious
privilege.
– They would suggest, for instance, that, as it
has no African or Latin American permanent
members, the Security Council fails to
represent the current state of the world.
– The presence of former colonial powers on
the Security Council perpetuates a form of
continued indirect colonial exploitation of the
Global South.
97
Chapter Two: Understanding Foreign Policy and Diplomacy

• The making of foreign policy begins by

identifying the state’s key national
interests.
• The total task of foreign policy is to defend
national interests.
 2.1. Defining National Interest
• It refers to set of values, orientation, goals
and objectives a given country would like to
achieve in its international relations.
• It involves core values of a society in the form
of security, welfare, protection of national way of
life, maintaining territorial integrity, and self-
preservation. 98
Determines the contents of foreign policy.
For Plato, the good of the polis (that is the
public good) could best be arrived at by
philosopher king aided by a few highly
learned, detached and fair-minded advisors.
Plato’s ideas have been used as the
inspiration for dictatorial forms of
government.
Implemented effectively by loyal, well
trained, and obedient bureaucracies.
99
 Colmbis has provided a multiplicity of criteria
used in defining/determining national interest
1) Operational Philosophy: two major style of
operation
 Synoptic orientation:
 Act in a bold and sweeping fashion.
 Introduce major new practices, policies, and
institutions and discontinue others.
 Some confidence that its consequence can be
predicted or controlled.
 Incremental orientation:
 Act in caution, probing, and experimental
fashion, following the trial and error approach.
 Assumes that political and economic problems
are too complex
 Seeks to perfect existing legislations, policies,
100
2) Ideological Criteria:
Identify their friends or enemies countries using
the litmus test of ideology. i.e. Cold war
National interest may be shaped by underlying
ideological orientations of the regime in power.
3) Moral and Legal Criteria:
Acting morally : keeping your promise –treaties,
avoiding exploitation and uneven development
between the developing countries and the
developed ones. Acting honestly.
Acting legally: abiding by the rules of
international law. If there are lacunas, than you
act in a general sprit of equity and justice.

101
3) Pragmatic Criteria:
Your orientation is matter of fact,
not on emotions and professions
By observing issues around you and
the world rationally, prudently.
Scientific analysis of cost and
benefit or merit and demerit
Decisions are made without
considering normative issues
Practical utility than morality and
personal sentiments
102
4) Professional Advancement Criteria:
 Your action may be manipulated and adjusted
in consideration of your professional
survival and growth (personal success)
 “Play the game” and “not to rock the boat.”
 “Go along to get along”
 Conformist behavior
5) Partisan Criteria:
 To equate the survival and the success of your
political party, or ethnic or religious
origin with the survival and success of your
country.
 To equate the interest of your
organization (the army, the foreign office,
and so forth) with the national interest. 103
6) Foreign Dependency Criteria:
 Less developing countries dependent on
foreign countries for technical aid,
expertise, technology, sometimes even
for their security and survival.
 Hence, face difficulties to defend and
promote their national interest.
 National interest appears to be a product
of conflicting wills, ambitions,
motivations, needs, and demands.
104
Realist international scholars reject the
ideological, legal and moral criteria to define
and shape the contents of national interest.
 They prioritize pragmatic criteria when defining
national interest and employing foreign policy.
 NI is ensuring survival and security of a state.
 Power is a means for achieving and promoting the
interest of state.
 Fail to recognize and prescribe solutions for
addressing global problems because of the exclusive
emphasis given to state and national interest.
 State-centric particularism.

105
Idealists have strong belief in the
relevance of legal, ideological and
moral elements
Specific actions and objective of foreign
policy have often been derived from
general moral and legal guidelines
and principles.
Idealists believe on the prevalence of
common problems of human beings
Cognizant of such cross-cutting issues,
idealists call for global solutions than
local (national) solutions.
New institutions with global orientation
106
2.2. Understanding Foreign Policy and Foreign Policy Behaviors

2. 2.1. Defining Foreign Policy

 FP refers to the sets of objectives and
instruments that a state adopts to guide its
relation with the outside world.
 It involves the general purposes and
specific strategies a state employs to
achieve or promote its national interest.
 FP is “the set of priorities and percepts
established by national leaders to serve as
guidelines for choosing among various
courses of action in specific situations in
international affairs” 107
 These objectives, visions and goals state aspire to achieve is
commonly referred as NI.
 Morgenthau suggests that the minimum goal a state would
like to achieve is survival.
 Every state should protect their physical, political, and
cultural identities
 Foreign policy also involves specific instruments and
tactics that must be employed to realize those objectives
and goals.
 i.e. diplomatic bargaining, economic instruments,
propaganda, terrorism (sabotage), and use of force (war).
 Each instrument is used to affect the behaviors of other
states, and has an element of power.
 Diplomacy has less element of power.
108
2.2.2. Foreign Policy Objectives
Criteria to classify FPOs
1. The value placed on the objective
2. The time element placed on its
achievement
3. The kind of demands the objective
imposes on other states in
international system.
109
A. Core Interests and Values (Short-Range Objectives)
 To which states commit their very existence and that must be
preserved or extended at all time
 Kinds of goals for which most people are willing to make
ultimate sacrifices.
 States are ready to go to war when all these objectives are
threatened because these are not negotiable or compromising.
 Usually stated in the form of basic principles of foreign policy
 Become article of faith that society accepts without
questioning it.
 Sacrosanct by entire peoples residing in the state.
 Related to the self preservation of political and economic
systems, the people and its culture, and the territorial
integrity of a state.
 Short-range objectives because other goals cannot be realized
if the existence of the state and its political units are not
110
ensured.
 The exact definition of core value or interest in any given
country depends on the attitudes of those who make
foreign policy.
 Extraterritoriality is there when the national interest and
claims of a country is projected beyond the limit of its
geographic boundary.
 States may think that their national interest is at risk when
the interests and security of citizens, or kin ethnic or
religious groups living in the neighboring states and other
states are threatened.
 Nevertheless, the most essential objective of any foreign
policy, core interests and values, is to ensure the
sovereignty and independence of the home territory and to
perpetuate a particular political, social, and economic
systems based on that territory
111
2. Middle-Range Objectives
 These are less important and less immediate relatively
compared to core objectives.
 Unlike, the short range objective, the middle range objectives
drastically varies across states.
 Due to the difference in the level of economic and technological
progress, as well as the military capability
 To take a course of actions that have the highest impact on the
domestic economic and welfare needs and expectation of its
people.
 To provide the people jobs, income, recreation, medical
services, and general security
 To meet economic-betterment demands and needs
 No self-reliant state
 Trade, foreign aid, access to communication facilities, sources
of supply, and foreign market are for most states necessary for
increasing social welfare 112
• Are policies designed to enhance the
state’s international prestige.
• This is often done through:
– diplomatic activity,
– participation in international cultural or
technological exchange programmes, or
– displays of one’s military capabilities
• Mid-term interests in short include
fulfilling material needs, economic
needs, prestige of the nation,
scientific and technological
advancement and so forth.
113
3. Long- Range Objectives
• These are the least immediate ones to
policy makers.
• Universal long range goals-which seldom
have definite time limits.
• Those plans, dreams, and visions concerning
the ultimate political or ideological
organization of the international system
• Their purpose is no less than to reconstruct
an entire international system according
to a universally applicable plan or vision
• Leaders rarely place the highest value on
long range goals.
• It’s very much dependent on the
capability and ideology of the state. 114
• They may have international
repercussions as far as they are
complemented by the capabilities and
powers
• Otherwise, they will not have any
international significance beyond paper
consumption and rhetoric level.
• This, however, doesn’t necessarily imply
that weak states do not formulate long
range objective.
• Every country has its own visions and
ambition proportional to its relative
strength and capabilities to be realized in
the long run. 115
Examples:
• Hitler’s Thousand Years Reich
• Japan’s Greater East Asia Co-Prosperity
Sphere
• The Soviet vision of world-wide
communist
revolution
• U.S. efforts to make the world safe for
democracy
116
2.2.3. Foreign Policy Behavior:
Patterns and Trends
Foreign policy behavior refers to the
actions states take towards each other.
Double standards and inconsistencies in
the records of all countries
Arnold Wolfers: three possible patterns
of FPB
(1) self-preservation (maintaining the status
quo)
(2) self-extension (revising the status quo in
one’s own favor)
(3) self-abnegation (revising the status quo
in some else’s favor) 117
 Self-preservation: US
 Following WWII emerged as one of the
strongest actors.
 IMF, World Bank, GATT/WTO ……..shaped by US
 United Nations……………Veto Power
 After the collapse of USSR……….sole world
power
 Self-extension: China, India, Brazil, Germany, BRICS
 Competing to restructure the international
institutions and different regime so as to create
enabling environment to promote their national
interest
 Self-abnegation: weak states/ LDC
 States which fail to defend and promote their
national interests in their external relations.
 States that are weak and very much dependent
on foreign aid are profoundly caught with
118
many problems in order to pursue an
2.2.4. Foreign Policy Dimensions: Alignment,
Scope and Modus operandi
• The analysis of foreign policy behavior can also
be done along a number of specific dimensions.
Alignment
 A country’s alignment behavior can vary from
time to time.
 Alliances: are formal agreements to provide
mutual military assistance. Most common during
the Cold War era.
 Pool their military resources
 Access to foreign bases
 But, interference by allies 119
 Neutrality: is a stance of formal non partisanship in world
affairs.
 Do not usually form military alliance and do not help states in times of
war.
 They may not also offer their territory for the passage of especially
military goods of another state.
 May avoid potential enemies and counter alliances.
 But, may lack protective military umbrella
 Nonalignment has been the foreign policy pattern of most
developing state during cold war.
 They called for a new foreign policy path/choice/ to be followed
disregarding both the West and East bloc politics and alliances.
 NAM had noble agenda that called for the South-South cooperation.
 They do not form military alliance with other states.
 Do not commit themselves militarily to support other state/states.
 A state with non-alignment policy may give different diplomatic
support for blocs/alliances or for states in a fight
120
 Scope
 Based on the scope of a country’s activities and interests abroad: at least
three patterns of foreign policy behaviors.
 Global actors:
 Major Powers in international relations have historically been those
that have defined their interest in global terms
 Interacting regularly with countries in nearly every region of the world.
 Regional actors:
 Most countries in the world are essentially regional actors
 Interacting primarily with neighboring states in the same
geographical area.
 Isolationists:
 Key weakness or geographic remoteness
 In an age of interdependence, isolationism becomes an increasingly
less viable foreign policy orientation.
 This was the case with Burma in 1960 and 70s.
 Some of the known global actors such as United States of America,
China, and the ex-USSR all have passed period of relative isolationism
and of mainly regional interests, finally branching out in to global
121
concerns
 Mode of Operation/ “Modus Opernadi’
 Multilateralist:
 Rely on multilateral institutions to address different issues.
 Through diplomatic forums in which several states participate i.e.
UN
 Most developing countries…b/c it enhances collective barraging
power of these countries vis-a-vis other developed countries.
 In addition, bilateral relations- country to country approaches-
(establishing Embassies and assigning diplomatic staffs) are often
found to be costly.
 Regardless of the power and capability question, countries may opt
to use multilateral frameworks as the best strategy to address issues
with the spirit of cooperation and peace.
 i.e. Germany, Scandinavian countries
 Unilateralist:
 Still others very much rely on unilateral means
 They play the carrot and stick diplomacy
 Intervention, threat of use of force and some time, use of force 122
 2.2.5. Instruments of Foreign Policy
1) Diplomacy
• A system of structured communication between two or more
parties.
• To pursue their objectives in a peaceful manner
• The essence of diplomacy remains bargaining.
• Bargaining can be defined as a means of settling differences over
priorities between contestants through an exchange of proposals
for mutually acceptable solutions.
• Commonalities of modern diplomacy such as embassies,
international law and professional diplomatic services.
• Promote exchanges that enhance trade, culture, wealth and
knowledge.
• Diplomacy is an essential tool required to operate successfully in
today’s international system.
123
• Types of deplomacy:
– Multilateral diplomacy
– Public diplomacy
– Leader-to-leader (summitry diplomacy)
• Conducted for the most part between states.
• The Vienna Convention on Diplomatic
Relations (1961) – only references states as
diplomatic actors.
• Yet, the modern international system also
involves powerful actors that are not states.
• Like IGOs and INGOs
124
Rules of Effective Diplomacy
A. Be realistic: goals that much your ability
B. Be careful about what you say
C. Seek common ground: concession/flexibility
D. Understand the other side:
E. Be patient
F. Leave avenues of retreat open
 In general, states use “carrot and stick” approaches
relying on diplomatic tactics such as threats,
punishment, promise, and rewards.
125
2. Economic Instruments of Foreign Policy
 There hardly exists a state that is self sufficient
 There is a considerable degree of dependence up
on trade among states.
 But the degree of dependence and
interdependence varies across states.
 Some states are strong and capable as compared
to other states.
 These states often uses their economic muscle to
influence the behavior (action, perception and
role) of others.
126
A. Tariff: taxing products coming into a country
B. Quota: sell only a certain amount in a given
time period
C. Boycott: eliminating import
D. Embargo: eliminating export
E. Loans, Credits and Currency
Manipulations:
F. Foreign Aid: military, technical, grants and
commodity
127
3. Propaganda
• Propaganda is systematic attempt to affect the minds,
emotions, and actions of a given group for public purposes.
• It is an organized effort by governments to convince foreign
states to accept policies favorable to them.
• The great bulk of the propaganda messages put out by a state
aims at creating a favorable view of a state by other states.
• Is an attempt primarily to influence another state/s through
emotional techniques rather than logical discussion or
presentation of empirical evidence.
• It is therefore a process of appealing to emotions rather than
minds by creating fear, doubt, sympathy, anger, or a variety
of other feelings.
• Using the media, magazines, newspaper, television, the
internet and other means.
128
4. The Use of Force/War
• The vast majority of international affairs are
conducted through diplomacy.
• But still force remains the most important
instrument.
• The use of military force to resolve differences
between two or more states is the last resort
states use as an instrument.
• This implies that the goals of the warring states
are irreconcilable.
• While diplomacy is ongoing, military strength
may be useful to support diplomacy.
129
 2.3. Overview of Foreign Policy of Ethiopia
 2.3.1. Foreign Policy during Tewodros II (1855-
1868)
– Before him there was only a sporadic and spasmodic foreign
relations.
– Brought bold and original ideas about the foreign relations of
his country
– The first leader who tried to develop a dynamic foreign
policy that reached out beyond the Horn Region.
– The forerunner of the policies of his successors.
 His major foreign policy objectives were:
1) To re-unify the old state:
 He defeated all minor kings fighting for the control of
the throne.
 He wanted to create a united and strong Ethiopia
 But only partially succeeded.
2) To consolidate his power:
 To defeat internal contenders/regional powers and 130
3) To protect the territorial integrity of the state
 To defend the country against the threat of foreign
expansionists
 To check the Turko-Egyptian imperialism that
threatened his country’s independence.
 He was a realist and nationalist leader with along-
term foreign policy strategy to protect the country from
external threat.
 Accordingly, he tried to procure the much needed
firearms and ammunitions to equip his army.
 Moreover, he required Europeans to send him artisans
to produce military weapon for him at home
4) To make his country to be recognized as equal
with European powers
 His FP and diplomatic dealings were based on the
principles of sovereignty and reciprocity
 He sought the Western Christian world to recognize and
respect his country.
 Took desperate measures by taking hostage of 131
5) Modernization
 Had passionate demand for modern technology
and skilled man power.
 He demanded to improve internal system for
modernization and renewal
 The development of the country
 He sought the Western Christian world to help him
to modernize his country
 To procure the much inspired technical aid to
modernize his country
 Directed his FP towards utilizing systematically
the knowledge of Europeans so as to
modernize the country.
 Hence, he introduced the idea of modernity and
modern army at the time.
132
Foreign policy strategies:
A. Friendship and alliance with
foreign Christian powers:
Attempted to establish his diplomatic
relations to fight his immediate enemies
claiming Christianity as instrument of
foreign policy.
As Keller has put it “he appealed
specifically to Britain, France and Russia
as Christian nations to assist him in
whatever ways possible in his fight
against the Turks, Egyptians and
Islam”.
133
2.3.2. Foreign Policy during Yohannes IV
(1872-1889)
FP Objectives:
1) Consolidating his power at home
• He had to firmly establish himself against the
strong regional rivals (like King Menelik of
Shoa)
• Friends were sought to help consolidate his
power to overcome domestic challenges.
2) To have free access to the sea:
• Friends were sought to help have free access to
the sea.
• Massawa was under the control of Italy with
the support of Britain, which had a control over
part of Eritrea.
134
3) To defend the country’s
sovereignty/territorial integrity
 Egypt tried to put a serious security threat ….to
control the source of Blue Nile: Gundet (1875)
and Gura (1876)
 Sudanese Mahdists were challenging Ethiopia
from the west..battle of Matama in 1889.
 In addition, the emperor saw European
expansionism as greater threat to the survival of
the country.
 Britain also continued assisting Egypt to make an
all-out war against Ethiopia.
 Italy got a foot hold at the port of Massawa in
1885.
 The emperor died fighting with the “Mahadists”.
135
 Foreign policy strategy: Cultivating the
foreign relationship with Europe
 Yohannes considered Islam as a threat to the
territorial integrity of the polity.
 He followed patient diplomacy
 Used prudence in his dealings with foreign powers.
 He was willing to negotiate even with his enemies
(Egypt, Britain) that had imperial aspirations over
the HoA, Ethiopia.
 He adopted an “open-door policy” for desirable
influences of European Christian powers.
 He turned to France.
 He asked France for recognition of his country’s
independence, himself as a sovereign power,
and to be his patron/ally.
136
 2.3.3. Foreign Policy during Menelik II
(1889-93)
 Menelik was the King of Shoa region before his
coronation as the King of Kings of Ethiopia.
FP Objectives:
1) Access to the sea
 Expanded his sphere of influence towards the far
South and East incorporating new areas and
communities peacefully or otherwise.
 The southward expansionism policy of the King
was mainly targeted to have access to Sea
Port, Zeila
 B/c the country’s access to the sea in the North
had fallen under Italy’s influence since the
mid 1880s
 And the issue of outlet to the sea remained the
137
burning question determining its policy and
2)Maintain the territorial integrity of his
country:
 Italy continued to be the main challenge in the
North.
 The King saw the other colonial powers
surrounding all four corners of the country
as the scramble of Africa was heightened.
 The emperor followed double track diplomacy
to contain or reverse Italy’s expansion and
maintain the territorial integrity of his country.
 He entered many treaties and agreements to
solve the challenge amicably.
 The emperor was preparing himself by
accumulating military ammunitions to defend the
aggression from any side of colonial powers

138
The emperor’s diplomatic endeavor with
Italy failed to result in peace due to
Italy’s misinterpretation of the controversial
article 17 of the ‘Wuchalle’ treaty.
In 1896, the emperor declared nation-wide
war against Italy in defense of the
territorial integrity and sovereignty of the
century.
Adwa victory
Ethiopia’s foreign policy of the forth coming
rulers has significantly been informed by
the notion of territorial integrity of the
country.
139
 FP strategies: diplomacy
 He had diplomatic relations with external
powers.
 This helped him import military
equipments from France, Britain and
Russia for Adwa incident
 This diplomatic relation had radically
increased following the victory of Adwa
 This enhanced Ethiopia's international
image.
 Britain, France, Russia and the vanquished
Italy came to Menelik’s Palace to arrange
formal exchange of Ambassadors.
 These powers signed formal boundary 140
 2.3.4. Foreign Policy during Emperor Haile
Selassie I (1916-1974)
FP Objectives:
1) The political independence/ territorial
integrity of his country:
 Italian invasion
2) Political /power consolidations:
 To build his power
 To ensure his survival at home
 There were internal forces challenging the regime
3) The creation of a stronger, centralized and
bureaucratic empire:
 He was dedicated to the creation of a stronger,
centralized and bureaucratic empire
 With unquestioned respect by the international
community
141
FP Strategies: Diplomacy
 Peaceful-coexistence and strong defense
system
 In spite of repeated provocations from
neighboring countries, especially from Somalia,
the emperor succeeded in preventing his military
force from adopting aggressive stance to them
 Preferred to live peacefully with neighbors
though the latter supported internal rebels (i.e.
ELF)
 Also believed in maintaining strong military
establishment for defense
 Had a military regarded as the best in black
Africa.
 The emperor reiterated that the country’s
preparedness was to preserve peace not for
aggression. 142
Collective security: LN, UN
 Ethiopia’s membership in the League of
Nations was clearly instigated by the ever
present danger of invasion by Italians.
 The Emperor fled to London and established a
government in exile.
 Journeyed to Geneva to make a plea before
the League of Nations for aid in defense
to the country.
 The collective security system, the League
ultimately failed to take any substantive
measure against Italy and the plea of the King
was ignored.
 The King continued to believe in the
ultimate value of effective diplomacy. 143
Recognized Ethiopia’s need for a powerful
external patron until he could restore the
independence of his country. ….Britain.
Ethiopia was extremely dependent on
British military, economic and technical aid.
The Emperor feared that Britain might
either declare Ethiopia a protectorate or
as an occupied enemy territory.
This fear moved him to seek alternative
relationships ….USA
Through diplomacy, Haile Selassie was able
to regain complete administrative
control over the territory he claimed and
more by 1954.
144
 In 1952 a U.N. resolution had made possible a
federation between Ethiopia and the former Italian
colony of Eritrea.
 In 1962 the emperor made it a province.
 United States had coveted a base in Eritrea where it
could set up a radio tracking station.
 Haile Selasie viewed the use of such an installation
by the United States as having more benefits
than costs
 Military aid, Military Assistance Advisory Group (training),
 Consolidated his military capacity and political power
 Decisive to ensure his survival at home and maintain
the territorial integrity of the country.
 He effectively used military action against those riots
and rebellions
 Contributed to the expansion of Ethiopian military as a
hedge against the Somalia threats.
145
 Ethiopia also played significant role in
Africa in fighting for African
independence and to end colonialism
and apartheid.
 In the United Nations, Ethiopia played its
part in raising agendas and pressing
for resolutions against colonialism
 Ethiopia also played a significant role in
maintaining international peace and
security (Sudan, Korea, Congo)
 Generally, the emperor secured the
territorial integrity of the country and
also secured port through Eritrea
146
Non-alignment :
– Ethiopia kept her options open in her
relations with others
– Maintained cordial relations with the
two mutually hostile blocs.
– Successful in diversifying his
dependence on foreign nations and
securing assistances: technology,
money, expertise.
– He got as cordial and warm receptions in
Moscow or Peking as he had in
Washington or London.

147
 2.3.5. Foreign Policy during the
Military Government (1974—1991)
 The primary objectives of the foreign
policy were:
1) The survival of the regime
– The defense and legitimacy of the regime,
so that it can continue in power and be
accepted at home and abroad.
– To firmly establish its authority and create
internal political stability
2) Maintaining the territorial integrity of
the country.
– A threat from Somalia
– National security
– In order to guarantee territorial integrity and 148
 Foreign policy strategies:
 The major strategy to achieve the stated objectives heavily
focused on building the military capability of the country
(force).
 The country was very much dependent on economic and
military aid on the others (socialists)
 Adopted a foreign policy largely oriented to socialist
ideology.
 Thus, had a strong relation with Soviet Union, South Yemen,
North Korea, Cuba
 Massive inflow of armaments
 Somalia (Ogaden war 1977-78), WSLF, Eritrea (EPLF),
TPLF and other internal forces
 But, economically the regime was dependent on the West.
 Loans from EC, IMF, WB.....
 Like the Imperial regime, Derg attempted to play off a
multiplicity of donors against one another to maximize its
benefit.
149
 Apart from socialism, Ethiopia’s strategic
locations and other questions, such as; Eritrea,
Somalia, and the issue of the Nile, had also
shaped the foreign policy orientation and
behavior of military government.
 With regard to Africa’s broader issues of
decolonization and anti-Apartheid struggle,
Ethiopia played significant role.
 The regime had extended its military and
technical support to Freedom fighters in Angola
and Rhodesia.
 The regime had also showed its solidarity to
Palestine’s cause by condemning Israel and
sought political allegiance with the Arab world,
however the negative perception that most Arab
countries have towards Ethiopia remained
150
unchanged.
2.3.6. The Foreign Policy of Ethiopia in the Post 1991
FP Objectives:
With EPRDF’s ascent to power the country adopted a new foreign
policy orientation and objectives.
1) To ensure the survival of the multi-national state.
– The territorial integrity and independence of the country
– Eliminating or at least reducing external security threats.
– To create a regional and global atmosphere conducive for
the country’s peace and security.
2) To create favorable external environment to achieve rapid
economic development and build up democratic system.
– Failure to realize development and democracy has resulted
in the threat to the country’s security.
– To get considerable technical and financial support to build
and strengthen institutions of democratic governance, so
crucial for the growth of democracy.
– So democracy and development are the foreign policy
visions of the country. 151
Strategies:
• The primary strategy in realization of these goals is
to put the focus on domestic issues first.
• Addressing domestic political and economic
problems.
• This strategy is called an “inside-out” approach.
• The inside out approach would then help to reduce
the countries vulnerability to threat.
• Economic diplomacy is adopted to strengthen the
domestic efforts in fighting poverty and
backwardness and address the issues of
development.
• Economic diplomacy involves attracting foreign
investments, seeking markets for Ethiopian
exportable commodities, seeking aid and
confessional loans too.
152
• The Security and Foreign Policy of the country
also indicated that Ethiopia would adopt a
kind of East-look policy.
• To learn from Singapore, Malaysian and
Indonesia
• The other foreign policy strategy is building
up the military capability of the country.
• Building up military capability would have a
deterrence effect.
• Though strategies may sometimes differ the
primary foreign policy objective of all the
three regimes remained the maintenance of
the territorial integrity and
independence of the country.
153
 Chapter Three: International Political Economy (IPE)

3.1. Meaning and Nature of International

Political Economy (IPE)
• The term ‘political economy’ implies that the
disciplinary separation of ‘politics’ from
‘economics’ is ultimately unsustainable.
• Political factors are crucial in determining
economic outcomes, and economic factors are
crucial in determining political outcomes.
• In short, there is no escaping political economy.
• IPE is the study of how economic interests and
political processes interact to shape
government policies.
• International Political economy (IPE) is a field of
inquiry that studies the ever-changing
relationships between governments, businesses,
154
and social forces across history and in different
• The field thus consists of two central dimensions
namely: the political and economic dimension.
• A political dimension accounts for the use of
power by a variety of actors (state and non-state)
• Another aspect of politics is the kind of public and
private institutions that have the authority to pursue
different goals.
• The economic dimension, on the other hand,
deals with how scarce resources are distributed
among individuals, groups, and nation-states.
• The market can also be thought of as a driving force
that shapes human behavior.
• However, in what ways are politics and economics
intertwined? How are ‘the political’ and ‘the
economic’ linked?
• These questions take us to a variety of
perspectives and approaches. 155
3.2. Theoretical perspectives of International Political Economy

• There are three major theoretical (often

ideological) perspectives regarding the
nature and functioning of the
International Political economy
A) Mercantilism/nationalism:
• Also known as economic nationalism
• Mercantilism is the oldest of the three,
dating back as early as the 16th century
(perhaps even earlier).
• Was most influential in Europe from the
fifteenth century to the late 156
 State-centric approaches to political
economy.
• An economic philosophy that takes
the state to be the most significant
economic actor, highlighting the
extent to which economic relations are
determined by political power.
• Defends a strong and pervasive role
of the state in the economy – both in
domestic and international trade,
investment and finance.
• Mercantilist states are highly
interventionist.
157
 National power and wealth were tightly connected
– National/state power in the international state
system derived in large part from wealth
– Wealth in turn is required to accumulate power.
– Economic strength is a critical component of
national power.
– For mercantilists, the world is a tough,
unforgiving place, where only the strong
survive.
– Is most closely associated with the political
philosophy of realism, which focuses on state
efforts to accumulate wealth and power to
protect society from physical harm or the
influence of other states.
– Thus states must pursue a set of economic
policies designed to maximize their own
wealth, for wealth and power go together 158
like bread and butter.
 Intends to build up a state’s wealth, power and prestige by
developing a favourable trading balance through producing
goods for export while keeping imports low.
– Trade provided one way for countries to acquire wealth from
abroad (Thomas Oatley).
– Wealth could be acquired through trade, however, only if the
country ran a positive balance of trade, that is, if the
country sold more goods to foreigners than it purchased from
foreigners.
– The chief device for doing this was protectionism.
– Import restrictions such as quotas and tariffs, designed to
protect domestic producers
– To protect ‘infant’ industries and weaker economies from
‘unfair’ competition from stronger economies. (defensive
mercantilism)
– To strengthen the national economy in order to provide the
basis for expansionism and war. (offensive mercantilism)
– Strongly concerned with developing a country’s domestic
manufacturing capacity
– Grant subsidies to domestic industries.
– Emphasizes the importance of balance-of-payment surpluses in
159
trade with other countries
 Argued that some types of economic activity are
more valuable than others.
– Manufacturing activities should be promoted
while agriculture and other non-
manufacturing activities should be discouraged.
– Defends a much more sophisticated and
interventionist role of the state in the
economy-for example, the role of identifying
and developing strategic and targeted
industries (i.e. industries considered vital to
long-term economic growth) through a variety of
means, including:
• Tax policy
• Subsidization,
• Banking regulation,
• Labor control, and
• Interest-rate management. 160
 States should also play a disciplinary
role in the economy to ensure
adequate levels of competition.
• Found in the recent experience of the
Japanese, South Korean, Taiwanese
and Chinese national political
economies
• Instead of the term mercantilism,
however, these states the East Asian
economies (especially Japan, South
Korea, and Taiwan) used the term
‘developmental state approach’.
161
B) Liberalism:
• Emerged in Britain during the 18th C to
challenge the dominance of mercantilism.
• Adam Smith’s Wealth of Nations (1776), rightly
famous liberal text, set out explicitly to
demonstrate that mercantilism was flawed.
• Among other criticisms of mercantilism, Smith
suggested that it was inefficient for a state to
produce a product that could be produced more
cheaply elsewhere.
• Later this would become the basis for David
Ricardo’s theory of comparative advantage
and the doctrine of free trade.

162
 Defends the idea of free market system.
 A market, in the most general sense, is any place
where the sellers of a particular good or service can
meet with the buyers of that good or service to
conduct an exchange or transaction.
 Free-market is therefore a market conditioned on
voluntary and unrestricted exchanges.
 Hence, liberalism favours, inter alia, free trade/trade
liberalization and free financial and Foreign Direct
Investment (FDI) flows).
 Has a policy of laissez-faire, in which the state leaves
the economy alone and the market is left to
manage itself.
 Economic exchange via the market is therefore a
positive-sum game, in that greater efficiency
produces economic growth and benefits everyone.

163
Removing impediments (barriers) to the
free flow of goods and services among
countries is the foundational value and
principle of liberalism.
• Advocates argue that this reduces prices,
raises the standard of living for more
people, makes a wider variety of products
available, and contributes to improvements
in the quality of goods and services.
• Besides, removal of barriers would encourage
countries to specialize in producing certain
goods, thereby contributing to the optimum
utilization of resources such as land, labor,
capital, and entrepreneurial ability worldwide.

164
• Unlike mercantilism, liberalism argues that
countries are not necessarily made wealthier by
producing manufactured goods rather than
primary commodities.
• Instead, countries are made wealthier by making
products that they can produce at relatively lower
cost at home and trading them for good that can
be produced at home only at relatively high cost.
• Thus, government should make little effort to
shape the types of goods the country
produces.
• Government efforts to allocate resources will only
reduce national welfare.
• The concept that captures this idea is comparative
advantage.
• However, the growth of (MNCs) complicates global
trading.
165
• And, shifting the conventional theory of
Countries do not enrich themselves
by running trade surpluses.
– Instead countries gain from trade
regardless of whether the balance of
trade is positive or negative.
– Thus, government should make little
effort to influence the country’s trade
balance.

166
Limited role of state/government:
– Establishing clear rights of ownership
of properties and resources
– Enforcing (the judicial system) these
rights and the contracts that transfer
ownership from one individual to
another.
– Resolving market failures

167
C) Marxism:
• Originated in the work of Karl Marx as a critique of
capitalism.
• According to him capitalism is characterized by two
central conditions: the private ownership of the
means of production, or capital, and wage labor.
• He believed that capitalist society was increasingly
divided into ‘two great classes’, the bourgeoisie
and the proletariat.
• The relationship between these classes is one of
irreconcilable antagonism, the proletariat being
necessarily and systematically exploited by the
bourgeoisie, the ‘ruling class’.
• Portrays capitalism as a system of class
exploitation and treats social classes as the key
economic actors.
168
• Capitalism’s quest for profit can only be
satisfied through the extraction of
surplus value from its workers, by
paying them less than the value their
labour generates.
• By paying workers subsistence wage,
they retain the rest as profits to finance
additional investments.
• He argued the growing inequality between
a small wealthy capitalist elite and a
growing number of impoverished workers
would eventually cause revolutions to
overthrow capitalism altogether.

169
 In contrast to liberalism, Marxists argue that
capitalists (not market) decide about how
society’s resources are used.
• Capitalists control resource allocation.
• Decisions about what to produce are made by few
firms that control the necessary investment capital.
• State plays no autonomous role in the capitalist
system
• The state operates as an agent of the capitalist class.
• The state enacts policies that reinforce capitalism and
thus the capitalists’ control of resource allocation.
 Thus, in contrast to the mercantilists who focus on the
state and the liberals who focus on the market,
Marxists focus on large corporations as the key
actor that determines how resources are to be
used.

170
The belief about Marxism’s death (following
the collapse of the Soviet Union in the
1990’s ) is greatly exaggerated.
– Global and national income inequality, for
example, remains extreme:
• the richest 20 percent of the world’s population controlled 83
percent of the world’s income, while the poorest 20 percent
controlled just 1.0 percent;
– Exploitation of labor shows no sign of lessening;
– The problem of child labor and even child slave
labor has become endemic and so on and so forth.
• These reflect the inherent instability and
volatility of a global capitalist system that
has become increasingly reliant on
financial speculation for profit making.

171
 Three contemporary theories of IPE
A) Hegemonic Stability Theory (HST):
• The theory of hegemonic stability got its start in the
1970s with the work of Charles Kindleberger,
(1973), who focused on the reasons for the Great
Depression.
• A hybrid theory containing elements of mercantilism,
liberalism, and even Marxism.
• The basic argument of HST is simple: the root cause of
the economic troubles that bedeviled Europe and much
of the world in the Great Depression of the 1920s and
1930s was the absence of a benevolent hegemon.
• A dominant state willing and able to take responsibility
(in the sense of acting as an international lender of
last resort as well as a consumer of last resort)for
the smooth operation of the International (economic)
system as a whole. 172
 More specifically, as a lender of last resort,
the hegemon provides access to loans
(especially long-term loans) when the normal
flow of international lending has dried up.
• This is also referred to as counter-cyclical
lending.
• Counter-cyclical lending, in turn, is critical to
the maintenance of currency convertibility,
which refers to the ease with which a country’s
domestic currency can be converted into gold
or a hard currency.
• When a currency becomes relatively
inconvertible, trade in goods tends to
decrease, since many countries are unwilling
to accept the inconvertible currency as
payment 173
 International trade is also negatively
impacted if there is no consumer of last
resort.
• In this case, as the consumer of last resort,
the hegemon maintains an open market,
and encourages other countries to follow suit.
• If the hegemon or potential hegemon closes
or restricts access to its market, as the United
States did in 1930 with the Smoot-Hawley
Tariff Act, the effects on international trade
are usually disastrous.
• The Smoot-Hawley Tariff Act had particularly
damaging effects because of the
asymmetrical (economic) power of the U.S.:
as the dominant economy in the world, the
U.S. decision to erect higher protectionist 174
 The existence of a hegemon does not
prevent economic shocks and
downturns from taking place.
• Instead, it plays a central role in ensuring
that such events do not devolve into
full-blown economic crises or
depressions.
• The world economic system was unstable
unless some country stabilized it, as
Britain had done in the nineteenth century
and up to 1913.
• In 1929, the British couldn't and the United
States wouldn't.
• When every country turned to protect
its national private interest, the world 175
 HST has thus influenced the establishment of the Bretton Woods
institutions (IMF and WB)- both being the products of American
power and influence.
• Fortunately, by the end of the 1940s, the United States
had become willing to shoulder much more of the burden for
maintaining global monetary stabilization.
• American hegemony was exercised in three ways:
• First, the United States itself maintained a relatively open
market, giving rebuilding economies a place to sell their goods.
• Second, the United States provided significant long-term loans;
initially, this was through the Marshall Plan and related programs
and later funding went through the reopened New York capital
market.
• Third, “a liberal lending policy was eventually established for
provision of shorter term funds in times of crisis”
• U.S. policymakers did not necessarily intend to take on a hegemonic
role, but once that happened, “they soon came to welcome it for
reasons that were a mixture of altruism and self-interest”

176
B) Structuralism
Is a variant of the Marxist perspective.
Starts analysis from a practical
diagnosis of the specific structural
problems of the international liberal
capitalist economic system whose
main feature is centre-periphery
(dependency) relationship between
the Global North and the Global South
which permanently resulted in an
“unequal (trade and investment)
exchange.”
177
The perspective is also known as the
‘Prebisch-Singer thesis’ (named after its
Latin American proponents Presbisch and
Singer)
The Prebisch-Singer hypothesis presents a
challenge to the fundamental finding of the
Ricardian model, to the idea that countries
that
specialise in the production of the
good in which they have a comparative
advantage will experience an
improvement in the terms of trade.

178
 The centre refers to the industrialised
countries and the periphery to the
developing countries.
• The centre produces sophisticated
manufactured goods while the
periphery specialises in the production of
primary products.
• The products produced face differing
elasticities of demand.
• Primary products are price and income
inelastic, while manufactures have a
high income elasticity of demand.
• The gains from trade will continue to be
distributed unequally (and, some would
179
add, unfairly) between nations exporting
It advocates for a new pattern of
development based on industrialization
via import substitution based on
protectionist policies.
• Prescribe import substitution
industrialization through suspension of
free play of international market forces.
• During the 1950s, this Latin American model
spread to other countries in Asia and Africa
• Then the domestic promotion of
manufacturing over agricultural and
other types of primary production became a
central objective in many development
plans.
180
C) Developmental State Approach
• Realizing the failure of neo-liberal development
paradigm (in the 1980’s) in solving economic
problems in developing countries, various writers
suggested the developmental state development
paradigm as an alternative development
paradigm.
• Is a variant of mercantilism and it advocates for
the robust role of the state in the process of
structural transformation.
• The term developmental state thus refers to a
state that intervenes and guides the direction
and pace of economic development.
• Advocates a state-directed lead to achieve
remarkable economic growth.

181
Some of the core features of
developmental state include:
Strong interventionism
Existence of bureaucratic apparatus
Existence of active participation and
response of the private sector
Regime legitimacy built on
development results
East Asian economies
– Japan, Singapore, China, South Korea,
and Taiwan

182
183
3.3. Survey of the Most Influential National Political Economy systems in the world

3.3.1. The American System of Market-Oriented Capitalism

• The primary purpose of economic activity is to benefit
consumers while maximizing wealth creation; the
distribution of that wealth is of secondary importance.
• Does approach the neoclassical model of a competitive
market economy
• The economy is assumed to be open to the outside world.
• the American economy is appropriately characterized as a
system of managerial capitalism.

184
• New Deal of the 1930s
• The neoclassical laissez-faire ideal was diluted by the
notion that the federal government had a responsibility
to promote economic equity and social welfare.
• The economic ideal of a self-regulating economy was
further undermined by passage of the Full Employment
Act
• A significant retreat from this commitment began with
the 1980 election of Ronald Reagan and the triumph of a
more conservative economic ideology emphasizing free
and unregulated markets.
185
• The role of the American government in the economy is
determined not only by the influence of the neoclassical model
on American economic thinking but also by fundamental
features of the American political system.
• The United States in the 1980s took a major step toward
establishing a national industrial policy.
• Industrial policy refers to deliberate efforts by a government to
determine the structure of the economy through such devices
as financial subsidies, trade protection, or government
procurement.
• Such policies have developed in the areas of agriculture,
national security, and research and development.
186
3.3.2. The Japanese System of Developmental Capitalism
• At the end of World War II, Japanese set their sights on
making vanquished Japan into the economic and
technological equal, and perhaps even the superior, of
the West.
• At the opening of the twenty-first century, this objective
has remained the driving force of Japanese society.
• Since its disastrous defeat in World War II, Japan has
abandoned militarism and has focused on becoming a
powerful industrial and technological nation

187
• A national economic policy best characterized as neo-
mercantilism: it involves state assistance, regulation, and
protection of specific industrial sectors in order to increase
their international competitiveness and attain the
“commanding heights” of the global economy.
• This powerful economic drive emanated from:
• Japan’s experience as a late developer and also from its
strong sense of economic and political vulnerability.
• The Japanese people’s overwhelming belief in their
uniqueness, in the superiority of their culture, and in their
manifest destiny to become a great power.
188
• The term “developmental state capitalism” best captures the
essence of the system
• The state assumed a central role in national economic
development and in the competition with the West.
• Pursued rapid industrialization through a strategy employing
trade protection, export-led growth, and other policies
• Industrial policy has been the most remarkable aspect of the
Japanese system of political economy.
• Support for favored industries, especially for high-tech
industries, through trade protection, generous subsidies, and
other means.
• The “infant industry” protection system
189
3.3.3. The German System of Social Market Capitalism
• Some similar characteristics with the American and the
Japanese, but it is quite different from both in other ways.
• Germany, like Japan, emphasizes exports and national
savings and investment more than consumption.
• However, Germany permits the market to function with
considerable freedom.
• The nongovernmental sector of the German economy is
highly oligopolistic and is dominated by alliances between
major corporations and large private banks.

190
• The German state and the private sector provide a
highly developed system of social welfare.
• The German state and the private sector provide a
highly developed system of social welfare.
• Indeed, the Bundesbank did create the stable
macroeconomic environment and low interest rates
that have provided vital support to the postwar
competitive success of German industry
• The German government has not also intervened
significantly in the economy to shape its structure
191
• Since the early 1990s, state owned sectors
have increasingly been privatized.
• The German political economy system is thus
closer to the American market-oriented
system than to the Japanese system of
collective capitalism.

192
3.3.4. Differences among National Political
Economy Systems

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din en
rea end
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Ind

193
 3.4. Core Issues, Governing institutions and
Governance of International Political Economy
3.4.1. International Trade and the WTO
 What is trade?
– Exchange of a good or service for another: Barter trade
– Exchange of money for goods and services: Currently, dominant
mode
– Might be domestic or international trade.
 What is International Trade?
– In cross-border trade the exchange of goods and services is
mediated by at least two different national governments,
– Each of which has its own set of interests and concerns,
– Each of which exercises (sovereign) authority and control over its
national borders.
– Despite the long history of trade, it is important to recognize that
the scope and scale of cross-border trade is, today, immensely
greater than at any other time in human history.
194
 Why International Trade?
The five basic reasons why trade may take place
between countries are:
– Differences in Technology
– Differences in Resource Endowments
– Differences in Demand
– Existence of Economies of Scale in Production
– Existence of Government Policies
How is international/global trade governed?
Global/Regional Free Trade Agreements govern
it.
i.e. WTO, NAFTA….
How does this work?

195
 WTO:
• It is the successor of GATT, which was established in 1947 as part of
the recommendations of the meeting at Bretton Woods in 1944 to
mitigate the major international problems.
• The GATT was established alongside the other Bretton Woods
institutions.
• The GATT was meant as a prelude to the creation of an International Trade
Organization (ITO), which was never established because it ran into
severe political opposition, especially in the United States.
• The GATT was an agreement, not an organization—the countries
participating in the agreement were officially designated as
“contracting parties,” not members.
• The GATT was expressly intended to bring about a “substantial
reduction of tariffs and other trade barriers and the elimination
of preferences, on a reciprocal and mutually advantageous basis”
• The GATT established to avoid the kind of competitive
protectionism that had plagued international trade before WWII.
• The GATT was set up to break down discriminatory trade
practices.
• The GATT succeeded in liberalizing international trade, primarily
through tariff concessions.

196
 GATT transformed into WTO in 1995
• Based in Geneva.
• Is an international organization which sets the
rules for global trade.
• The only international organization dealing with
global rules of trade between nations.
• Its main function is to ensure that trade flows as
smoothly, predictably and freely as possible.
• The WTO has not only continued the work of the
GATT, but has also created a much stronger basis
for trust building and cooperation.
• One of the main developments in this regard is the
Dispute Settlement Panel (DSP), which has the
power to resolve trade disputes between and
among member countries.

197
 Generally:
– Serves as a rule-making organization,
– Monitors trade agreements,
– Adjudicates trade disputes between member states,
and
– Facilitates trade talks.
• Has more than 150 members.
• Voting in WTO is equally counted unlike IMF, WB
• All decisions are taken unanimously
• But, the major economic powers such as the US, EU
and Japan have managed to use the WTO to frame
rules of trade to advance their own interests.

198
NAFTA: U.S., Canada, and Mexico
 “free trade” was initially meant a lesser degree of
governmental constraints in cross-border trade
 but not an elimination of government action.
 The tariffs were eliminated by mutual agreement
in 2008
 Both Mexico and the U.S. also agreed that
“import-sensitive sectors” could be protected.
 In other words, the notion of free trade in NAFTA
had and still have significant element of
protectionist /mercantilist policies
 Tariff: tax
 Non-tariff barriers: import ban; import quota; domestic
health, safety, and environmental regulations; technical
standards; inspection requirements.

199
3.4.2. International Investment and the WB
 What is investment?
• FDI is, in the most general terms, investment
made in a company or entity based in one
country by a company or firm based in another
country.
• A more specific definition is provided by the World
Bank, which defines FDI as follows: “the net
inflows of investment to acquire a lasting
management interest (10 percent or more of
voting stock) in an enterprise operating in an
economy other than that of the investor’’
• The transfer of capital, personnel, know-how,
and technology from one country to another for
the purpose of establishing or acquiring
income-generating assets.
200
• FDI occurs when a firm based in one county
• Firms have invested across national borders to gain
secure access to natural resources.
– For example oil companies have invested heavily
in Middle Eastern countries because they hold
such a large proportion of the world’s petroleum
reserves.
• Firms also invest across borders to gain secure
access to foreign markets.
– Because of tariff and nontariff barriers to export to
important foreign markets.
– To produce and sell in the local market.
• MNCs make cross-border investments to improve the
efficiency of their operations.
– Parent firms allocate different elements of the
production process to different parts of the world.
– The capital-intensive part to developed countries
and the labour-intensive part to developing
201
countries
There is a debate in the literature whether
FDI is, in fact, a conduit for wealth extraction
rather than for domestic development.
• Some observers argue that FDI:
– Creates jobs
– Increases the revenue and tax bases of the host
government
– Facilitates the transfer of technology and human
capital
– Ultimately promotes development, economic
growth, and prosperity
202
• Opponents, on the other hand, argue that FDI serves to
extract more national wealth than it contributes to the
host country.
– They claim that FDI maintains the host country in a
dependent situation.
– Second, it creates a skewed or uneven pattern of
economic development. When the investment
period comes to an end, for example, it can leave the
local workforce in a precarious economic position.
– Third, to attract FDI, host countries increasingly
compete with one another and can end up offering
such favourable deals and incentives that they
ultimately lose more revenue than they generate.
– Finally, there are environmental and health issues
as well. For example, multinational corporations
(MNCs) sometimes export heavy polluting technologies
or ‘dirty industries’ that are highly regulated in the
home country.
• Investment and development process in the developing203
 World Bank:
• Created immediately after the Second World War in
1944.
• Based in Washington, D.C.
• It provides loans and grants to the member-
countries.
• Was primarily designed as a vehicle for the
disbursement of Marshall Plan money set up to
aid the (immediate) reconstruction of Europe.
• The World Bank was initially designed to offer
assistance in the form of loans to those countries
devastated by the Second
World War.
• Accordingly, it succeeded in achieving a
financially, economically, and politically more
stable and stronger Europe.
204
• Later on, the bank expanded its influence to all
developing countries in Asia, Africa, and Latin
America.
• Its activities are focused on the developing
countries.
• It works for human development, agriculture and
rural development, infrastructure, and governance.
• However, unlike in the case of Europe, the impact of
the WB on the development of developing countries
has been at best controversial and at worst
negative.
• It is often criticized for:
– Setting the economic agenda of the poorer nations,
– Attaching stringent /tough conditions to its
aids/loans and
– Forcing free market reforms/excessive and hard to
implement policy prescriptions.
205
3.4.3. International Finance and the IMF
• Based in Washington, D.C.
• Like GATT and WB, it was established in 1944
following the meetings at Bretton Woods.
• The three institutions were established to
stabilise the international financial system
and facilitate the expansion of trade.
• The IMF was set up to oversee the management
of fixed exchange rates between member
states.
• Oversees those financial institutions and
regulations that act at the international level.
206
• The IMF was designed to promote
international monetary cooperation.
• The IMF also engages in lending, but on a
short-term basis only.
• IMF loans (and loan guarantees) are meant to
solve temporary balance-of-payment
problems faced by member countries that
cannot otherwise obtain sufficient financing.
• In this sense, the IMF is an international lender
of last resort.
• The IMF has been subject to intense criticism.
• Critics are mainly concerned with the
CONDITIONALITIES imposed on borrower
countries.
• These conditions typically require borrowers to207
• The IMF has 184 member countries, but they do not
enjoy an equal say.
• The top ten countries have 55 per cent of the
votes.
• They are the G-8 members (the US, Japan, Germany,
France, the UK, Italy, Canada and Russia), Saudi
Arabia and China.
• The US alone has 17.4 per cent voting rights.
• There is unequal voting system.
• Voting power is determined by what the IMF calls a
quota.
• A quota (or capital subscription) is the amount of
money that a member country pays to the IMF.
• Accordingly, the more a country pays, the more say
it has in IMF decision makings.
• And, it is the US that tops up in this regard.
208
• The global financial system is divided into two
separate, but tightly inter-related systems: a
monetary system and a credit system.
• The international monetary system can be
defined as the relationship between and
among national currencies.
• More concretely, it revolves around the
question of how the exchange rate among
different national currencies is determined.
• The credit system, on the other hand, refers
to the framework of rules, agreements,
institutions, and practices that facilitate the
transnational flow of financial capital for the
purposes of investment and trade financing.
209
3.5. Exchange Rates and the
Exchange-Rate System
• An exchange rate is the price of one
national currency in terms of another.
• Example: one U.S. dollar ($1) was worth
98.1 Japanese yen (¥)
• There are two main exchange rate
systems in the world namely: fixed
exchange rate and floating exchange
rate.
210
A pure floating-rate system:
Determined solely by money supply
and money demand.
Absolutely no intervention by
governments.
A pure fixed-rate system
The value of a particular currency is
fixed against the value of another
single currency or against a basket of
currencies. 211
 How is the global financial system governed?
 The IMF was designed to clearly represent U.S.
interests and power first and foremost, and the
interests of the other major capitalist countries
(the developed economies) secondarily
 This can be seen, more concretely, from the way
decision-making power within the IMF was
designed
 Voting power is determined by what the IMF calls a
quota
 The more a country pays, the more say it has in
IMF decision makings
212
Chapter Four: Globalization and Regionalism

4.1. Defining Globalization

 Globalization can be defined as a multidimensional process
characterized by:
– the stretching of social and political activities across state (political)
frontiers
– the intensification or the growing magnitude of interconnectedness
– the accelerating pace of global interactions and process as the
evolution of worldwide systems of transport and communication
increases
– the growing extensity, intensity, and velocity of global interaction is
associated with a deepening enmeshment of the local and global

213
 Globalization is synonymous with a process of time-space
compression
 globalization embodies a process of deterritorialization
 b/c social, political, and economic activities are no longer
organized solely according to territorial logic.
 For example terrorist and criminals operate both locally and
globally.
 Another example is that under the condition of globalization,
national economic space is no longer coterminous with
national territorial space since
 Territorial borders no longer demarcate the boundaries of
national economic or political space.
214
Generally, globalization is often understood
as:
o a phenomena, or a process characterized by
increasing interconnectedness or
interdependence.
o it is a supra regional process bringing the world
into one global village.
o The economy, politics, and technology have been
the driving forces of globalization.

215
4.2. The Globalization Debates
• what is new about globalization; and what are its political
consequences for sovereign statehood?
4.2.1. The Hyper-globalists
• nation states become obsolete to regulate their economy
and boundary.
• globalization is bringing about a de-nationalization/ de-
territorialization of economies
• this borderless economy national governments are
relegated to little more than transmission belts for global
capital or ultimately powerless institutions
216
• the authority and legitimacy of states thereby is undermined
• become increasingly unable to control the Tran boundary
movements and flows of goods, services, ideas
• The cumulative effects of these forces would make the state
in effective to full fill the demands of its citizens.
• claim that economic globalization is generating a new pattern
of losers as well as winners in the international economy
• further argue that globalization is imparting new liberal ideas
and implant culture of modernization replacing the
traditional culture

217
4.2.2. The Skeptics
• The skeptics rejected the view of super- globalist
as a myth, flawed and politically naïve
• The force of globalization, very much dependent
on the regulatory power of the state to ensure
the continuation of economic liberalism
• States are central actors and agents of
globalization playing central role in shaping and
regulating the economic activities
218
• Undermine the view that the world is
interconnected and moving into a village
• Globalization is not more than regionalization that
is being manifested in the emergence of financial
and trading blocs: EU,NAFTA, ASEAN
• More interconnectedness at regional level than at
the global level.
• There is no free flow of goods, resources,
technology and finance at the global level; instead
we have regional based globalization.
219
• the Western region is more intergraded and
globalized than the other part of the world such as
Africa and Asia.
• The connection is not benefiting the developing
nations.
• The Skeptics thus do not believe that globalization
would help to narrow the economic and technological
gap
• Globalization brings nothing new, rather it is just the
crystallization the already existing North-South gap
220
4.2.3. The Transformationalist
• Globalization is a critical driving force behind the rapid
social, political and economic changes which are reshaping
societies and international politics.
• Globalization is reconstituting or reengineering the power,
function and the authority of the state
• Even though the state has ultimate legal power to control
events inside its boundary, it can’t command sole control
over trans-boundary issues, actors, resource movements
• national economic space no more coincides with state
boundary.
221
• reject both the hyper globalist view of the end of
the sovereign state as well as the Sceptics claim
that nothing much has changed.
• Instead they assert that a new sovereignty regime
is displacing traditional conception of state power
as an absolute, indivisible, territorially exclusive
power.
• Under globalization, there are non-state actors as
Multinational Corporation, transnational social
movements, international regulatory agencies.
222
• World order can no longer be conceived as purely
State-Centric or even primarily state managed as
authority has become increasingly diffused
amongst public and private agencies
• This does not mean that the power of national
government is necessarily diminished but on the
contrary it is being redefined, reconstituted and
restructured in response to the growing complexity
of process of governance in a more interconnected
world.
223
 4.3. Globalization and Its Impacts on Africa

 Its position in the international system has been considerably

weakened
• b/c of weak economic development in general, and human
development in particular
• This in turn is b/c of political and social instability and the rise of
authoritarian regimes
• The cold war has had significant consequences for Africa.
• Both one party and military regimes
• End of cold war has led to “failed states” as they are no more
strategically important.
• The cold war and its demise has worked against democracy and
economic development in Africa.
224
Political impact:
 The erosion of sovereignty, especially on economic and
financial matters.
 Because of the imposition of models, strategies and
policies of development on African countries by IMF, WB
and, WTO.
 Greater respect for human rights and contributed to the
development of an African press.
 But, principles of democratic governance and
transparency tend to be applied selectively and
subjectively.
225
 Economic impact:
• Reinforced the economic marginalization of African
economies and their dependence on a few primary goods
for which demand and prices are externally determined.
• This has, in turn, accentuated poverty and economic
inequality
• Economic and social stagnation has also triggered a
substantial brain- drain from Africa
• Further weakening the ability of African countries to
manage their economies efficiently and effectively

226
Cultural impact:
• Cultural domination from outside
• African countries are rapidly losing their
cultural identity
NB: the negative consequences of globalization
on Africa far out way their positive impact.

227
 4.4. Ethiopia in a Globalized World

• Ethiopia is one of the countries marginally

integrated to the capitalist system during the post-
Cold War era.
Positive impact:
• Ethiopia managed to secure development aid and
loan to finance its national development projects
and design its own economic policy independently
• It has also benefited from the technological and
knowledge transfer, free movement of ideas, people
and finance.
228
 Negative impacts:
• The expansion of information communication opened
Ethiopia to new religious and secular values that affected the
religiosity and social solidarity of its people.
• Socio-cultural impact of western values is amply observed in
urban centres.
• Contributed to the rise radical nationalism and ethnicity.
• The prevalence of human trafficking and migration is partly
attributable to the onset of globalization.
• To sum up, Ethiopia has benefited less from globalization than
its negative influences.

229
 4.5. Pros and Cons of Globalization

 Merits:
o Expansion of democratic culture, human right and the
protection of historically minority and subaltern groups.
o Innovation in science, medicine, and technology and
information communication has enabled the improvement of
quality of life.
o Agricultural technological expansion..poverty
o Technological and social revolution .... human security and
safety.
o The free movement of good, service, people, ideas, expertise,
knowledge and technology ........international interdependence
o New sense of global society and the perspective of global
citizenship 230
 Demerits:
• Western imperialism of ideas and beliefs eroding and
inroads the sovereignty of non-Western countries.
• Global capital and international financial institutions like
WB and IMF made free inroads into countries of the south
• Brings different way of life and cultural values.
• Has made the globalization of risks, threats and
vulnerabilities like global terrorism, religious
fundamentalism, proliferation of Small Arms and Light
Weapons (SALWs), arms and human trafficking.

231
• It has stimulated the emergence a
simultaneous but opposite process of
Glocalization, which involves a process of
integration to the world and differentiation to
the local.
• This process has contributed to the rise of
radical nationalism and ethnicity, which set
the context for the emergence of the era of
identity and identity conflicts.
232
4.6. Defining Regionalism and Regional Integration

• Region can be defined as a limited number of states

linked together by a geographical relationship and by
a degree of mutual interdependence.
• Regionalism consequently refers to intensifying
political and/or economic processes of cooperation
among states and other actors in particular
geographic regions.
• Regionalism normally presents the sustained
cooperation (either formal or informal) among
governments, non-governmental organizations, or
the private sectors in three or more countries for
233
mutual gains
• Regionalization can be conceived as the growth of societal
integration within a given region, including the undirected
processes of social and economic interaction among the units
(such as nation-states
• Regionalization can be best understood as a continuing process of
forming regions as geopolitical units, as organized political
cooperation within a particular group of states, and/or as regional
communities such as pluralistic security communities
• Similarly, the term regionalism refers to the proneness of the
governments and peoples of two or more states to establish
voluntary associations and to pool together resources (material
and nonmaterial) in order to create common functional and
institutional arrangements.
234
4.6.1. The Old Regionalism
• It emerged in Western Europe in the late-1940s, subsequently
spreading to the developing world.
Regional Integration in Europe and Beyond
 Old regionalism has its roots in the devastating experience of
inter-war nationalism and World War II.
 Closely linked to the discussion about ‘regional integration’ in
Europe (the formation of the European Communities)
 In contrast to earlier discussions that centered on mercantilism
and competing alliances
 To achieve and consolidate peace and stability
235
• A series of initiatives were launched, which resulted in
the European Coal and Steel Community (ECSC) in 1951.
• In 1958 the European Economic Community (EEC) and
the European Atomic Energy Community (EAEC) were
integrated into the EC through the Treaty of Rome.
• The influence of EU goes beyond being successful
experiment in regionalization and came to dominate the
discourse on regionalization.
• European integration is still being treated as the primary
case or ‘model’ of regional integration

236
Regional Integration in Africa
• The discussion about regionalism in the developing world was
closely linked to colonialism/anti-colonialism and the quest to
facilitate economic development in the newly independent
nation-states.
 Latin America:
• Latin American Free Trade Association (LAFTA) in Montevideo in
1960.
• Including all countries on the South American continent plus
Mexico.
• Regionalization in Latin America during 1960s and 1970s did not
materialize because of conflict and military dictatorship.
237
 Africa:
 The debate between the Federalist Casablanca and Monrovia groups
had also its own influence.
 The major ideological influence on regional cooperation and
integration, however, is embodied in the founding principles of OAU
and later AU such as Lagos Plan of Action (1980) and the Abuja
treaty (1991).
 The major purpose of regionalization was to resist colonial and post-
colonial influence, protectionism and realizing import substitution.
 CFA (Community of French Africa), East African Community (EAC)
and SACU (Southern African Community Union). The SADCC (The
Southern Africa Development Coordination Conference, a
predecessor of the SADC)
238
4.6.2. New Regionalism:
 The new regionalism referred to a number of new trends and
developments, such as:
– the spectacular increase in the number of regional trade agreements,
– an externally oriented and less protectionist type of regionalism,
– an anti-hegemonic type of regionalism which emerged from within the
regions themselves instead of being controlled by the superpowers,
– the rise of a more multi-dimensional and pluralistic type of
regionalism, which was not primarily centered around trading
schemes or security cooperation and with a more varied institutional
design, and
– the increasing importance of a range of business and civil society
actors in regionalization.

239
B/c of structural changes in the post-Cold War
era:
– the end of bipolarity
– the intensifi­cation of globalization
– the recurrent fears over the stability of the
multilateral trading order
– the restructuring of the nation-state, and
– the critique of neoliberal economic development
and political systems in developing as well as post-
communist countries
240
4.7. Major Theories of Regional Integrations

4.7.1. Functionalism
• Viewed regionalism as a functional response by
states to the problems that derived from regional
interdependence.
• Regionalism is seen as the most effective means of
solving common problems.
• Regional organization was then built up to cope with
one common problem and spill over to other
problems and areas of cooperation, which will
deepen integration among member states.
241
 According to FIURRELL (1995), there were two sorts of
spillover:
1) Functional spillover whereby cooperation in one area
would broaden and deepen further areas
– cooperation in the economic field spreads out to other
sectors
2) Political spillover whereby the existence of supranational
institutions would set in motion a self-reinforcing process
of institution building.
– a shift in loyalties from nationalism towards
regionalism
– institutions possesses or demands jurisdiction over the
pre-existing national states
– the diminishing role of the nation-state 242
Karns and Mingst (2005) argue that
functionalism is applicable at both regional
and global levels.

243
4.7.2. Neo-functionalism
 Neo-functionalism emerged in the 1960s based on the key
works of Ernst Haas and Leon Lindberg
 Ernst Haas: 'Political integration is the process whereby
political actors in several distinct national settings are
persuaded to shift their loyalties, expectations and
political activities towards a new centre, whose
institutions possess or demand jurisdiction over the pre-
existing national states. The end result of the process of
political integration is a new political community,
superimposed over the pre-existing ones.'
244
 According to Lindenberg, the following preconditions for
the success of an integration process:
1) Central institutions and central policies should be
established and developed representing a 'regional
view';
2) Their tasks and capacity to implement those tasks
should go well beyond the mandate of normal
international institutions;
3) Their tasks should be inherently expansive;
4) There should be some link between the interests of
member states and the process of integration.
245
Neo-functionalism focus on political
integration.
The concept spill over, originally coined by
Haas, refereeing to the process of integration
from the political sphere into other aspects
of life.
Lindberg considers integration as “inherently
expansive task” that has to begin from the
political sphere.
246
Inter-governmentalism
 Inter-govemenmetalism or liberal intergovernmentalism is
a theory and approach that focus on the state for
integration to succeed.
 According to Moravcsik integration can be considered as
part of the rational choice of state actors.
 This rationalist framework disaggregates the process of
integration into three stages:
1) National preference formation
2) Interstate bargaining
3) Institutionalchoice.
247
Supra-nationalism
• Derived from Neo-functionalism
• ??????????????????
• ??????????????????

248
4.8. Selected Cases of Regional Integration

EEC-EU
OAU-AU
SADC, ECOWAS, COMESA and the EAC.
ASEAS-1967
Established a preference area in 1977, and
The Asian Free Trade Area in 1992.

249
4.9. Regionalization versus Globalization and State

250
4.10. The Relations between Regionalization and Globalization

There are three possible options regarding the

mutual relations between regionalization and
globalization, especially in the economic dimension:
1) Regionalization as a component of globalization
(convergent trends);
2) Regionalization as a challenge or response to
globalization (divergent trends);
3) Regionalization and globalization as parallel
processes (overlapping trends)

251
Regionalization as a Component of Globalization: Convergence
 Regionalism is emerging today as a potent force in the
processes of globalization.
 Regionalism may be understood as but one component, or
‘chapter’ of globalization
 By helping national economies to become more competitive
in the world market, regional integration will lead to
multilateral cooperation on a global scale
 Since globalization unfolds in uneven rather than uniform
dynamic patterns, it may reveal itself in processes that are
less than geographically global in scope.
 Therefore, globalization may be expressed through
regionalization. 252
Regionalization as a Challenge or Response to Globalization: Divergence
 The impetus toward regionalization might stem in this case from a reaction
and challenge to the amorphous, undemocratic, and inexorable economic
rules of globalization.
 This reaction can be motivated by either nationalistic/mercantilistic or
pluralistic/humanistic concerns
 By creating trade blocs and integration frameworks based on mercantilistic
premises, regionalism opposes the neoliberal ‘harmony of interest’ view
of the world economy in favor of national (and regional) loyalties and
frameworks.
 The drive toward the formation of regions might be also motivated by the
denial of a single universal culture (and ideology) and the promotion of
alternative or pluralistic forms of social and political organizations other
than the nation-states at the regional level.

253
Regionalization and Globalization as Parallel
Processes: Overlap
• Rather than reacting to each other,
regionalization and globalization might act as
parallel or overlapping processes in the two
issue-areas of economics and security.

254
4.11. Regionalization, Globalization and the State

• Bringing the forces of nationalism and the possible role(s)

of the nation-state into the equation creates the following
possible linkages:
Nation-States and Nationalism as Rival Processes of
Globalization
• The blossoming of statehood may be a response to the
homogenizing forces of globalization
• The persistence or resurgence of nationalism can be
regarded as a response to the alienating forces of the
global market, by relocating or legitimacy and loyalties at
the national or even sub-national levels
255
Globalization as a Force of Nationalism and the
Formation of New States
• Through a process of technological
dissemination, globalization might actually
promote nationalism and the formation of
new states.
• Thus, globalization creates new strategies and
roles for the nation-state

256
Nation-States as Rival Forces of Regionalization
• Nation-states might oppose forces of
regionalization by setting limits and constraints to
the development of a regional identity and
supranational institutions.
• States will regard regional and sub-regional
integration frameworks through the prism of
international organizations with a limited mandate
in terms of intervention, domestic jurisdiction, and
the exercise of sovereignty.
257
Regionalism as a Force of Nationalism and the Nation-
States
• Regionalization in a given region might result from
mercantilistic or nationalistic tendencies of the
member-states that see frameworks of regional
integration as a means to pool and increase their
national power resources.
• The goal is to guarantee the bloc (region) members
greater security in their international relations in a
context of increasing vulnerability of either the world
economy or global security
258
Coexistence between Regionalism, Nationalism and
Globalization
• In this case we have neither convergence nor
divergence but rather coexistence—the three
processes are taking place simultaneously
• There might be parallel processes of globalization and
continuing trends of fragmentation and disintegration
• The effects of globalization upon regionalization and
especially on the nation-state are rather indeterminate

259
Nation-States as Mediators between Regionalism
and Globalization
• State policies are probably the single most
important determinant of the scope and
direction of both regionalization and globalization
• The stronger the states, the more capable they
are in coping with the intricacies of the
economic, political, social, technological, and
cultural dimensions of globalization.

260
Nation-States Opposing Globalization through
Regionalism
• One possible option open for states to cope with
globalization is by enhancing processes of
regionalization, such as the creation of free trade
areas that recreate a double (and contradictory)
logic of economic relations: liberal at the
intraregional level but protectionist/mercantilist
toward other rival regions or ‘blocs.’

261
Chapter Five: Major Contemporary Global Issues

262