research topics in international political economy

International Political Economy

• Yuhki Tajima , Field Chair
• Mitch Kaneda , Curricular Dean

Please see the SFS Bulletin for all major requirements .

The International Political Economy (IPEC) major investigates the rich intersection between economics and politics in the global environment. It typically goes beyond the constituent disciplines by combining traditional economic concerns about efficiency with traditional political concerns regarding distributional issues and legitimacy in market and non-market environments. The resulting combination of insights provides a means of better understanding complex interactions at the local, national and international levels.

The special character of international political economy derives in part from the methodological and substantive overlaps between the traditional disciplines of economics and political science. Methodologically, political economy combines formal modeling, comparative methods, and statistical techniques to analyze and evaluate competing theories of economic and political phenomena. In addition to using methods standard in the constituent disciplines, political economy has pioneered in developing new tools for the study of collective action in the presence of conflicting private interests.

Substantively, International Political Economy analyzes how international and domestic political factors interact with economic factors to determine outcomes in a wide variety of areas, e.g., legislation, elections, government regulation, and policy formation in response to international phenomena; unilateral and multilateral activities involving international trade, finance, aid, and natural resources; local and international growth, development, and income distribution; and the interaction between business, governments, and diplomacy. The scope of inquiry ranges from mature capitalist countries, to developing economies to nations making transitions to capitalist systems. In all cases, the focus is on issues that cannot be properly understood without insights gained from both international economics and international politics.

Goals of the Major

The International Political Economy (IPEC) major is designed to provide students with the multi-disciplinary, methodologically rigorous tools needed to understand and analyze the interaction between political and economic forces around the world. These tools, as well as the substantive knowledge gained, will serve students who pursue graduate work, or careers in the private, public, or non-profit sector, international or non-governmental organizations. The IPEC major derives in part from the overlap between economics and political science, and the substantive knowledge gained by students in the IPEC major will partly reflect this. But the IPEC major also goes beyond these constituent disciplines and will provide students with knowledge of a variety of areas, including but not limited to the problems of globalization, the processes of economic development and reform, and the role of political power in economic policymaking.

Students will acquire both analytical tools and substantive expertise through unique core courses as well as through foundational courses from International Economics and International Politics on economic theory, econometrics, and international political economy. Students will also gain further expertise on specific areas by specializing in subsequent courses. All students, finally, will apply analytical tools to a particular topic of interest by writing a senior thesis.

Objectives of the Major

Substantively, International Political Economy analyzes how international and domestic political factors interact with economic factors to determine outcomes in a wide variety of areas. The scope of inquiry ranges from mature capitalist countries, to developing economies to nations making transitions to capitalist systems. In all cases, the focus is on issues that cannot be properly understood without insights gained from both international economics and international politics. This requires an understanding of the methods and principal issues animating the areas in which these fields intersect.

To do this, students will learn:

• Quantitative and qualitative methods to make causal inferences regarding political-economic phenomena
• The ways in which states and state-institutions help or hinder economic prosperity How collective action in the presence of conflicting private interests can shape legislation, elections, and policy
• The nature of unilateral and multilateral factors shaping international trade, finance, and aid.
• Original research and writing that identifies a puzzle, derives testable hypotheses, selects appropriate methodologies, gathers empirical evidence, and offers conclusions.

Writing in the Major

Students majoring International Political Economy learn how to apply analytical tools to a particular topic of interest by writing a senior thesis and how to produce original research and writing that identifies a puzzle, derives testable hypotheses, selects appropriate methodologies, gathers empirical evidence, and offers conclusions.

IPEC majors are introduced to analytical tools and theories through the following required classes:

• ECON 101 Intermediate Microeconomics
• ECON 121 Economic Statistics
• ECON 122 Intro to Econometrics
• GOVT 261 International Political Economy
• PECO 201 Analytical Tools for Political Economy

Students are exposed to research topics and research methods through reading of academic papers and conducting their own research projects presented in courses such as:

• IPEC 312 Research Topics in International Political Economy
• IPEC 328 Political Economy of Inequality and Distribution
• IPEC 332 Political Economy of Institutions and Development
• IPEC 250 IPE Quantitative Research Lab
• INAF 383 Applied Econometrics for Development: Stata Practicum
• ECON 484 Political Economy of Trade Policy

Finally, students are trained to produce original research and writing conducted in the mandatory capstone course:

• IPEC 401 Senior Capstone Seminar

Honors in the Major

Students can earn Honors in the IPEC Major by submitting a letter of intent during the junior year, writing an honors quality thesis based on original research during the senior year, earning an A grade in the Senior Seminar, earning a major GPA of at least 3.67, and earning a cumulative GPA of at least 3.5.

IPEC Requirements

IPEC majors must satisfy the following requirements.

All students must demonstrate proficiency in mathematics by one of three means: Passing MATH-035 Calculus I with a score of 4 or higher in AP Calculus, or passing the Math Department Calculus I waiver test.

The Mathematics Department waiver test is an option suitable for students who studied calculus in high school but did not have the opportunity to take the AP exam. It is administered during the New Student Orientation period just before the beginning of the fall semester. Note that calculus is a prerequisite for Intermediate Microeconomics and Economic Statistics.

It is recommended that students satisfy the calculus requirement before the beginning of the sophomore year.

Requirements for the Class of 2022 and Beyond

• Prerequisite: Calculus I or equivalent
• Corequisite: GOVT-040 Comparative Political Systems
• Corequisite: GOVT-060 International Relations
• Corequisite: ECON-243 International Trade
• Corequisite: ECON-244 International Finance
• ECON-101 Intermediate Microeconomics
• ECON-121 Economic Statistics
• ECON-122 Introduction to Econometrics
• GOVT-261 International Political Economy, GOVT-262 International Organization, GOVT-267 International Trade Law, or GOVT-268 Political Economy of Development
• PECO-201 Analytical Tools for Political Economy or ECON-459 Game Theory
• Two IPEC Core or Supporting courses, at least one of which must be IPEC Core
• IPEC-401 Senior Thesis Seminar*

*Students who are not pursuing Honors in the IPEC major will be able to choose between the following: Option I: Taking IPEC 401 and writing a thesis in it. Option II: Taking an additional IPEC Core category course to substitute IPEC 401, and submitting a research paper written in a 300 or 400-level course that can count for the major. Notes: (a) IPEC 401 is required for all students seeking Honors in the IPEC major and remains open to all students in the major. (b) For Option II, you cannot double-count a single IPEC Core course to satisfy both the capstone requirement and an IPEC Core requirement. (c) For Option II, the research paper is to be submitted electronically to Dean Kaneda before the last day of the semester’s classes (not the last day of exams) if you are graduating in May or December, and before the last day of the second summer session’s classes if you are graduating in August. (d) For Option II, the research paper can be from any of the 300 or 400-level courses that are attributed as IPEC Core or IPEC Supporting category courses. Not all IPEC Core/Supporting courses have a research paper requirement. (e) For Option II, the research paper is expected to analyze a theoretical or empirical puzzle relevant to IPEC. It must be a completed and conclusive paper, and not a research proposal. The student must have earned a passing grade for the course in which the research paper was written.

Requirements Up to and Including the Class of 2021

The following 4 preparatory courses. These courses should be taken before senior year.

• ECON 122 Introduction to Econometrics

ECON 101 should be completed during sophomore year since it is a pre-requisite for PECO 201. ECON 121 should be completed by the first semester of junior year since it is a pre-requisite for ECON 122. GOVT 261 targets sophomores and juniors. It is offered once a year, in either of the semesters. Students going abroad in the junior year should look into taking GOVT 261 in the sophomore year, as long as GOVT 060 International Relations has been completed.

Two Interdisciplinary Courses in Political Economy.

• PECO 201 Analytical Tools for Political Economy (offered every fall)
• IPEC 401 Senior Seminar in Political Economy (offered every spring)*

PECO 201 is ideally completed during junior year. IPEC 401 must be completed at Georgetown.

• Four courses from the IPEC Core and IPEC Supporting course lists, at least two of which must be IPEC Core courses.

*Students who are not pursuing Honors in the IPEC major will be able to choose between the following: Option I: Taking IPEC 401 and writing a thesis in it. Option II: Taking an additional IPEC Core category course to substitute IPEC 401, and submitting a research paper written in a 300 or 400-level course that can count for the major. Notes: (a) IPEC 401 is required for all students seeking Honors in the IPEC major and remains open to all students in the major. (b) For Option II, you cannot double-count a single IPEC Core course to satisfy both the capstone requirement and an IPEC Core requirement. (c) For Option II, the research paper is to be submitted electronically to Dean Kaneda before the last day of the semester’s classes (not the last day of exams) if you are graduating in May or December, and before the last day of the second summer session’s classes if you are graduating in August. (d) For Option II, the research paper can be from any of the 300 or 400-level courses that are attributed as IPEC Core or IPEC Supporting category courses. Not all IPEC Core/Supporting courses have a research paper requirement. (e) For Option II, the research paper is expected to analyze a theoretical or empirical puzzle relevant to IPEC. It must be a completed and conclusive paper and not a research proposal. The student must have earned a passing grade for the course in which the research paper was written.

SEQUENCING IPEC majors urged to have fulfilled the Calculus I prerequisite (course, advanced credits, or waiver test) before the sophomore year. ECON 101 Intermediate Microeconomics and ECON 121 Economic Statistics are best taken during the sophomore year. You can consult the curricular dean for individualized planning.

QUANTITATIVE METHODS Analyzing data, whether to test hypotheses or to summarize trends, is an important part of studying international political economy. As a result, all majors are required to take statistics and econometrics and are encouraged to do so as early as possible, preferably no later than the end of their junior year. (Statistics and econometrics are essential in writing the senior thesis in IPEC-401.)

December Graduates: Some students who have accumulated sufficient credits elect to graduate early. To do so, students need to plan ahead, especially if honors in IPEC is to be pursued. All IPEC Honors candidates must take the senior seminar, IPEC-401, which is offered only in the spring semester.

IPEC Course Lists:

The list of IPEC core and IPEC core and supporting courses can be searched for in the Registrar’s Schedule of Classes for each semester by selecting all for “Subject” and selecting SFS/IPEC Core Courses or SFS/IPEC Supporting Courses for “Attribute Type.”

Study Abroad

A substantial fraction of students choose to spend part or all of the junior year abroad. Although studying abroad has clear benefits, it also has costs. A successful balancing of these costs and benefits requires advanced planning. PECO-201 is offered in the fall semester. As this course builds a foundation that will be used in later courses, it is best to take it before the senior year. Students spending one semester abroad should consider the spring rather than the fall semester. Those spending a year abroad should consult with the field chair and the curricular dean.

Theoretical Foundations of International Political Economy

• First Online: 22 May 2024

Cite this chapter

• Christian May   ORCID: orcid.org/0000-0001-7550-8747 5 ,
• Daniel Mertens   ORCID: orcid.org/0000-0002-2194-8293 6 ,
• Andreas Nölke   ORCID: orcid.org/0000-0002-0357-9682 5 &
• Michael Schedelik   ORCID: orcid.org/0000-0003-1536-3210 5  

Part of the book series: Springer Texts in Political Science and International Relations ((STPSIR))

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International Political Economy expands the perspective of Comparative Political Economy to include transnational economic relations, foreign economic policy, and international economic institutions. Chapter 5 outlines the establishment of IPE as a sub-discipline in the 1970s and refers to the subsequent differentiation of theoretical development. The chapter distinguishes roughly between four strands: (1) theories that were developed in direct reference to the major theories of International Relations; (2) theories that go back in various forms to Karl Marx and can be described as generic theories of capitalism; (3) theories that bring together Comparative and International Political Economy and thus different levels of analysis; and (4) theories whose origins lie primarily in the humanities and were then applied to questions of IPE.

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May, C., Mertens, D., Nölke, A., Schedelik, M. (2024). Theoretical Foundations of International Political Economy. In: Political Economy. Springer Texts in Political Science and International Relations. Springer, Cham. https://doi.org/10.1007/978-3-031-49665-3_5

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Global Political Economy

Manchester has been central to global political economy debates since the mid-19th century, when both liberal free traders and Marx and Engels found a home here. They articulated some of the key ideas which our members still grapple with today.

The Global Political Economy cluster focuses research on a series of key questions regarding the dynamics of global capitalism. How does it depend on and reproduce key forms of inequality around race, gender, class and geography? What drives its crisis-prone qualities? What are the main ideological forms that sustain it and seem to make resistance to its power so difficult? How is it integral to the production of ecological unsustainability and can it survive the challenge of the climate crisis? What are the main current debates in the critique of global capitalism?

Colleagues and PhD students within the cluster work on a range of these questions in various specific contexts, including:

• Gender, race and class in the global political economy
• Trade, finance, and global production
• The politics of global economic governance
• Political economy of the environmental crisis and the pursuit of sustainability
• Ideology and the legitimation of capitalism, especially neoliberalism
• Resistance and social movements in the global economy
• Political economy of various world regions, especially Europe, Africa, and Latin America
•  The Social Sciences and Humanities Research Council of Canada and ESRC-funded project Gendering Global Trade through Canada-UK Trade Relationships led by Adrienne Roberts and Silke Trommer; Roberts and Trommer also lead the SheTrades: Gendering Global Trade Governance project, funded by the SSHRC
• Carl Death’s book The Green State in Africa won the 2018 Harold and Margaret Sprout Award from the Environmental Studies section of the International Studies Association
• Mat Paterson was the recipient of the 2020 Distinguished Scholar Award from the Environmental Studies section of the International Studies Association
• Mat Paterson is a Contributing Author to the Intergovernmental Panel on Climate Change’s Sixth Assessment Report
• Sherilyn MacGregor has been funded to write a policy roadmap for a feminist green new deal for the UK by the Women’s Budget Group (2020-21) and a major research report on the impacts of climate change on care work by Oxfam USA (due to be published in 2021).
• The project Foundations and Frontiers in IPE co-led by Stuart Shields and supported by the British Academy/Leverhulme Trust
• Greig Charnock is part of a research consortium for the Co-working Spaces and the Uban Ecosystem Post-COVID-19 project. He is also a Co-investigator for the Canadian SSHRC project 'Smart cities in international comparison'. 
• Georgina Waylen continues to publish work from her large European Research Council Advanced Grant project Understanding Institutional Change: A Gender Perspective

Academic staff

• Ian Bruff   (Critical political economy, European political economy, neoliberalism, critical social theory, capitalist diversity)
• Greig Charnock   (Contemporary global capitalism, crisis and austerity in Europe, critical theory (Marxism), theories of the production of space)
• Carl Death  (African politics, development studies, environmental politics, protest and resistance)
• Ellie Gore  (feminist and queer political economy, gender, sexuality, labour, and the political economy of development)
• Sherilyn MacGregor  (Environmental politics; feminist/gender politics; urban sustainability; social movements; citizenship and participation) 
• Matthew Paterson  (Climate change politics, environmental political economy, cultural political economy, social network analysis)
• Jasmin Ramovic  (Peacebuilding, international political economy, ethnography in peace studies, everyday peace, social movements)
• Adrienne Roberts  (International political economy, feminist political economy, gender, social reproduction, debt)
• Stuart Shields  (International political economy, Eastern Europe, regional development banks, Gramsci, populism)
• Silke Trommer  (International political economy, international trade, development, social movements, gender and IPE)
• Robert Watt  (International political economy, environmental politics, climate change, development studies)
• Georgina Waylen  (Gender and politics, comparative politics, feminist institutionalism, international political economy)

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• Kai Heron, 2015-2019. “Many Struggles, One Fight:” Deleuze|Guattari, Lacan, and the US Anti-Fracking Movement. 
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• Malgorzata Jakimow , NGOs, labour and space: migrant workers and the remaking of citizenship in China, 2013-2015 . Now Assistant Professor in East Asian Politics at Durham University.
• Gediminas Lesutis , 2015-18. The Politics of Precarity and Global Capitalist Expansion: The Case of Mining, Dispossession and Suffering in Tete, Mozambique . Now a postdoctoral research associate in the Department of Geography at the University of Cambridge.
• Anna Wienhues , 2015-18. Life in Common: Distributive Ecological Justice on a Shared Earth . Post-doctoral researcher at the University of Zürich.
• Simon Chin-Yee , 2015-18. Defining Policy: Drivers of Climate Change Policy in Kenya . Now Research Associate, Kings College London.
• Kelvin Charles, 2014-17. The Common in Hardt and Negri . Commercial Operations Manager (non-academic).
• Jon Las Heras, 2014-17. Variegated Trade Union Strategies in the Spanish Automotive Industry . Lecturer in Industrial Economics, Universidad del País Vasco.
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• Giulia Sirigu, 2012-15. Continuity and Change in Mexican Foreign Policy under Fox . Representative, Italian Chamber of Commerce.
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POL S 586 A: Topics In International Political Economy

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Article contents

International political economy and the environment.

• Gabriele Spilker , Gabriele Spilker Department of Political Science and Sociology, University of Salzburg
• Vally Koubi Vally Koubi Center for Comparative and International Studies, ETH Zurich
• , and  Thomas Bernauer Thomas Bernauer Department of Humanities, Social and Political Sciences, Eidgenössische Technische Hochschule Zürich
• https://doi.org/10.1093/acrefore/9780190228637.013.172
• Published online: 29 March 2017

How does liberalization of trade and investment (i.e., economic globalization) as well as membership in international organizations (i.e., political globalization) affect the natural environment? Does economic and/or political globalization lead to ecological improvement or deterioration? This article reviews the existing literature on international political economy (IPE) and the environment in view of these and related questions.

While globalization has various dimensions—economic, social, and political—IPE focuses mainly on the economic dimension when analyzing the effect of globalization on the environment. In particular, IPE puts most emphasis on the environmental implications of trade in goods and services as well as foreign direct investment (FDI). Even though both trade and investment are thought to have a substantial impact on the natural environment, the existing literature demonstrates that the effects of economic globalization on the environment are neither theoretically nor empirically one-dimensional. This means that existing research does not allow for a clear-cut overall assessment in terms of whether globalization leads to an improvement or deterioration of the environment. This is the case because the impact of economic globalization on the environment materializes via different mechanisms, some of which are supposedly good for the environment, and some of which are bad.

On the one hand, economic globalization may improve environmental quality via its positive effect on economic growth, since trade and FDI facilitate specialization among countries according to their comparative advantage and the transfer of resources across countries. On the other hand, relevant economic theory gives little reason to believe that free trade and FDI will influence all countries in the same way. Instead, when considering the relationship between economic globalization and the environment, it is important to consider the interactions between scale, composition, and technique effects created by different national characteristics and trade and investment opportunities. In particular, the scale effect of openness to trade and capital mobility increases environmental degradation through more intensive production. The technique effect predicts a positive effect of trade and FDI on the environment through the use of cleaner techniques of production. And the change in the sectoral composition of a country as a consequence of trade and FDI, the composition effect , could positively or negatively affect the environment of a country (e.g., a change from agriculture to industry may lead to higher energy consumption and air pollution while a change from industry or agriculture to service is expected to decrease environmental degradation). Consequently, the overall effect of trade and FDI on environmental quality can be positive, negative, or nonexistent strongly depending on the specific situation of the country under investigation.

Furthermore, both theory and empirical research highlight the potential for government policy and environmental regulations to affect the relationship between trade/FDI and the environment. On the one hand, increased competition between economic actors (usually companies) due to increased market openness (globalization) might cause a race to the bottom or at least regulatory chill in formal and informal environmental standards as well as pollution havens attracting foreign direct investment. The reason is that countries might weaken (or at least not increase) their environmental policies in order to protect industries from international competition or attract foreign firms and FDI motivated by the expectation of lower costs of environmental protection. Hence the (theoretical) expectation here is that developed countries will refrain from adopting more stringent environmental regulations and might even reduce existing standards due to competition with countries that have laxer environmental regulation. And less-developed countries will adopt lax environmental standards to attract FDI flowing into pollution-intensive sectors and export the respective goods to jurisdictions with higher environmental standards.

In contrast, the Porter hypothesis states that a tightening of environmental regulations may stimulate technological innovation and thus help improve economic competitiveness. In addition, trade openness may induce an international ratcheting up of environmental standards (trading up) as higher environmental standards of richer and greener countries spread—via trade and investment relationships—to countries starting out with lower environmental standards. Furthermore, multinational corporations engaging in FDI and applying universal environmental standards throughout their operations tend to transfer greener technology and management practices to host countries, thus promoting the upgrade of local environmental standards and improving the environmental quality in those countries (the so-called pollution halo effect).

Echoing the many theoretical pathways through which globalization can affect the natural environment, empirical studies estimating the impact of trade and FDI on environmental standards and environmental quality deliver quite heterogeneous results. In particular, the literature points to various factors mediating the effect of trade and FDI on the environment, such as differences in technology between industrial and developing countries, stringency of environmental regulations, property rights and political institutions, corruption levels as well as the pollution intensity of multinationals.

More recently, IPE scholars have started to study the political dimensions of globalization and how they are related to environmental protection efforts. Memberships in international organizations are at the center of this research and recent studies analyze, for example, how they may affect the quality of the environment. Other studies focus more on specific organizations, such as the World Trade Organization, and, for instance, evaluate whether in trade disputes over environmental standards economic or environmental concerns prevail. Finally, a new strand of the IPE and environment literature deals with the micro level and studies how citizens evaluate economic openness in light of potential environmental concerns.

• globalization
• environment
• Environmental Kuznets Curve
• pollution havens
• pollution halo
• race to the bottom
• race to the top
• international organizations

Introduction

One of the most contentious issues in current debates on the economy–environment nexus concerns the environmental impact of international economic liberalization (i.e., free trade and free capital movement). This controversy began with the formation of the World Trade Organization (WTO) and negotiations on the North American Free Trade Agreement (NAFTA), and gained further momentum in the context of the 1997 Kyoto Protocol and other international environmental agreements.

So, how does liberalization of trade and investment (i.e., economic globalization) affect the natural environment? Under which circumstances does economic globalization lead to a deterioration or amelioration of a country’s natural environment? And what about other forms of globalization, such as memberships in international organizations? Do these forms of globalization also have profound impacts on countries’ natural environment? This article reviews the existing literature on international political economy (IPE) and the environment in view of these and related questions.

While globalization has various dimensions—economic, social, and political—IPE focuses mainly on the economic dimension when analyzing the effect of globalization on the environment. In particular, IPE puts most emphasis on the environmental implications of trade in goods and services as well as foreign direct investment (FDI). Even though both trade and investment strongly affect the environment, the existing literature demonstrates that the effect of economic globalization on the environment at large materializes via different mechanisms, some of which may be good for the environment, and some of which may be bad. Hence an overall, that is, unconditional, assessment of the impact of economic globalization on the environment is hardly possible, since this impact depends on a specific country’s situation, for example, on its economic wealth, its political institutions, or the type of environmental regulation. This review therefore evaluates different mechanisms through which globalization might affect the environment.

Starting with globalization-induced adverse environmental effects, increased competition between economic actors (usually firms) due to increased market openness (globalization) might, in the worst case, cause a regulatory race to the bottom or at least regulatory chill in formal and informal environmental standards. And it might induce some jurisdictions to serve as pollution havens attracting dirty foreign direct investment. The reason is that countries might weaken (or at least not strengthen) their environmental policies in an attempt to protect their industries from international competition or attract foreign firms and FDI motivated by the expectation of lower environmental protection costs. The most common (theoretical) expectation here is that developed (industrialized) countries will refrain from adopting more stringent environmental regulations and might even reduce existing standards due to competition with countries that have laxer environmental regulation. And less-developed countries presumably adopt lax environmental standards to attract FDI flowing into pollution-intensive sectors and export the respective goods to jurisdictions with higher environmental standards.

In contrast, the so-called Porter hypothesis states that a tightening of environmental regulations may stimulate technological innovation and may thus help improve economic competitiveness while also producing environmental benefits (Porter, 1990 ). Trade openness may therefore engender an international ratcheting up of environmental standards (trading up), as higher regulatory environmental standards of richer and greener countries spread—via trade and investment relationships—to countries starting out with lower environmental standards (Bernauer & Caduff, 2004 ; Bernauer, Engel, Kammerer, & Nogareda, 2007 ). In addition, multinational corporations engaging in FDI and applying universal environmental standards throughout their operations tend to transfer greener technology and management practices to host countries, thus promoting the upgrading of local environmental standards and improving the environmental quality in those countries (the so-called pollution halo effect).

More recently, IPE scholars have also started to study the political dimensions of globalization and their effects on environmental protection efforts. Memberships in international organizations are at the center of this research. Recent studies analyze, for example, how these organizations may affect the quality of the environment across countries. Other studies focus more on specific organizations, such as the WTO and for instance, evaluate whether in trade disputes over environmental standards economic or environmental concerns prevail. Finally, a new strand of the “IPE and environment” literature deals with the micro level and studies how citizens evaluate economic openness in light of potential environmental concerns.

The remainder of this article reviews existing research in each of these areas, and concludes by highlighting and assessing some of the theoretical and empirical challenges and pointing to avenues for further research.

Economic Globalization (Trade/FDI) and Environmental Degradation

The existing literature on the effect of international economic liberalization on the environment is extensive and highly elaborated; nevertheless, it does not allow (neither theoretically nor empirically) for a clear-cut overall assessment of this relationship. As stated above the main reason for this stems from the fact that some effects of economic liberalization on the environment are indirect, as they run via economic growth, and some are direct; that is, they hold for a given level of income. In both cases, the effects can be either beneficial or detrimental for the environment. In the following, we elaborate on these effects.

Indirect Effect via Income

Economic globalization can have an effect on countries’ natural environment via its impact on welfare. In particular, it is argued that international economic integration (openness) allows countries to specialize in those industries in which they have a comparative advantage and hence allows for a more efficient allocation of resources. Due to the resulting welfare-enhancing gains, a country’s national income tends to increase (Frankel & Rose, 2005 ). In the long run, it can be argued that these increases in general welfare lead to a rise in demand for public goods provision as the demand for most public goods such as better environmental quality, education, or health care usually increases with growing income (Deacon, 2009 ; Selden & Song, 1994 ). In the short run, however, the effect of an increase in income depends on the current income level of the respective country.

The linkage of income and the environment has evoked much discussion and has provoked ample empirical research over the last decades. The common thread in these studies is that environmental quality is claimed to deteriorate at low levels of income and then improve at higher income levels after a tipping point is reached (Grossman & Krueger, 1991 ). This inverted U-shaped relationship between income and environmental quality has become generally known as the Environmental Kuznets Curve (EKC) (see Figure 1 ). 1

Figure 1: Stylized environmental Kuznets curve.

Four factors arguably influence the particular shape of the EKC: the scale of the economy, its structure or composition, the level of technology, as well as the income elasticity of the demand for environmental quality. 2

More precisely, over the course of a country’s economic development, rising national income increases the scale of economic activity, which—all else equal—leads to rising pollution levels (scale effect). However, after a certain threshold of national income has been reached, pollution is hypothesized to decline due to two effects: First, the composition of the economy is likely to change from manufacturing to a larger share of services (composition effect). Second, with rising national income, technological progress tends to lead to less environmental pollution (technology effect).

Grossman and Krueger’s ( 1991 ) original arguments on the EKC motivated a lot of empirical studies aimed at confirming or refuting the EKC based on a variety of environmental indicators, such as air pollution (Bruvoll & Medin, 2003 ; Deacon & Norman, 2006 ; Du, Li, & Yan, 2014 ; Grossman & Krueger, 1995 ; Hettige, Mani, & Wheeler, 2000 ; Holtz-Eakin & Selden, 1995 ; Managi, Hibiki, & Tsurumi, 2009 ; Selden & Song 1994 ; Shafik & Bandyopadhyay, 1992 ; Verbeke and De Clercq, 2006 ); carbon dioxide (CO2) emissions (Azomahou, Laisney, & Van, 2006 ; Heil & Selden, 2001 ; Managi et al., 2009 ; Plassmann & Khanna, 2006 ); water pollution (Paudel, Zapata, & Susanto, 2005 ); deforestation (Barbier, 2000 ; Barbier & Burgess, 2001 ; Culas, 2007 ); hazardous waste and toxins (Rupasingha, Goetz, Debertin, & Pagoulatos, 2004 ); and biodiversity loss (Dietz & Adger, 2003 ; Lantz & Martínez-Espiñeira, 2008 ; McPherson & Nieswiadomy, 2005 ; Tevie, Grimsrud, & Berrens, 2011 ).

However, criticism concerning inconsistencies or ambiguities in the theoretical modeling as well as concerns over econometric analyses have arisen, and critics have challenged both the findings and the policy implications of EKC studies (Dasgupta, Laplante, Wang, & Wheeler, 2002 ; Stern, 2004 ). Overall, the existing research suggests that the EKC model holds for different pollutants in different ways, depending on the choice of the pollutant, study area, time period, and statistical procedures (Harbaugh, Levinson, & Wilson, 2002 ; Managi et al., 2009 ; Millimet, List, & Stengos, 2003 ).

Moreover, one strand in the EKC literature posits that there may be a political component to the EKC, which implies that at early stages of economic development, environmental quality is generally considered a luxury good; since states at this stage of economic development have only limited resources available, environmental performance usually ranks far behind the demand for better living conditions, for example. However, once people attain a certain standard of living, environmental quality turns into a normal public good, and citizens demand that their government takes actions to reduce or avoid pollution, for example, by enacting appropriate environmental regulations (Grossman & Krueger, 1995 ; Selden & Song, 1994 ; Shafik, 1994 ). Dasgupta and Mäler ( 1995 ) and others also note that political rights and civil liberties are important components in protecting the environment.

The importance of political institutions in the EKC relationship has also been examined empirically in papers that consider political variables, in particular, political rights, civil liberties as well as bureaucratic quality, in addition to income in the EKC regression (e.g., Barrett & Graddy, 2000 ; Bättig & Bernauer, 2009 ; Bernauer & Koubi, 2009 ; Cao & Prakash, 2012 ; Congelton, 1992 ; Culas, 2007 ; Farzin & Bond, 2006 ; Harbaugh et al., 2002 ; Li & Reuveny, 2006 , 2009 ; Lin & Liscow, 2013 ; Maxwell & Reuveny, 2005 ; Panayotou, 1997 ; Torras & Boyce, 1998 ; Ward, 2008 ; You, Zhu, Yu, & Peng, 2015 ). Most of these studies report that more democratic political institutions tend to significantly increase both environmental standards and environmental quality.

To summarize, the indirect effect of trade and FDI on the environment via income depends on the particular country’s position on the EKC. For countries still on the upward-sloping part of the curve an increase in income caused by trade and/or FDI should imply a further deterioration of its natural environment. In contrast, for countries having passed the turning point, an increase in income should be associated with improvement of environmental quality.

Direct Effects: Scale, Technique, and Composition

Turning to the direct effects of trade and FDI on the environment, these effects can be divided into a scale, technology, and composition effect, similar to the decomposition of income in the literature on the Environmental Kuznets Curve (Antweiler, Copeland, & Taylor, 2001 ; Barrett, 2000 ; Copeland & Taylor, 1994 ; Frankel, 2003 ; Frankel & Rose, 2005 ). The effects are similar for trade and FDI with a few notable differences. Hence we start our discussion in the context of how trade affects the environment and then lay out in which ways FDI effects differ.

The scale effect posits that due to expanded economic activity caused by an increase in trade, pollution will rise, all else equal (Antweiler et al., 2001 ; Cole, 2004 ; Shandra, Leckband, & London, 2009 ). However, trade also allows access to better technologies and management practices such as catalytic converters for cars or scrubbers on smokestacks, which implies that this technology effect has a positive impact on environmental quality (Esty, 2001 ). Furthermore, growing trade may also lead to a more efficient allocation of resources, which means that industries should settle where they have a comparative advantage. This is labeled the composition effect of trade. Whether this change in the allocation or composition of industry brings about an increase or decrease in pollution depends on whether a particular country has a comparative advantage in a more or a less polluting industry (Antweiler et al., 2001 ; Cole, 2004 ). We discuss this aspect in more detail further below in the context of FDI.

In one of the first studies to investigate the relationship between trade and the environment, Antweiler and colleagues ( 2001 ) examine SO2 concentrations in 43 countries from 1971 to 1996 . They find positive, that is, pollution increasing scale and composition effects, and negative technique effects. Since the technique effects were sufficiently large so as to offset the negative effects arising from scale and composition effects, they conclude that trade openness is in total associated with reduced air pollution. Frankel and Rose ( 2005 ) also examine the effects of trade on seven different indicators of environmental quality. They address the potential simultaneity of trade, environmental quality, and income by applying instrumental variable estimations in the context of a gravity model of bilateral trade with endogenous growth equations. Using cross-section data from 41 countries in the 1990s, they find support for the optimistic view that trade reduces sulfur dioxide emissions. 3 In addition, Sigman ( 2002 , 2004 ) examines the effects of trade on water pollution. She reports that country pairs with higher levels of bilateral trade are characterized by lower levels of transboundary river water pollution. A later study by Bernauer and Kuhn ( 2010 ) partially supports but also qualifies these earlier findings in that it shows that trade has either a negative or insignificant effect on transboundary water pollution. Li, Xu, and Yuan ( 2015 ), on the other hand, report that trade openness has a significantly negative impact on the environment, that is, reduces air visibility in both developing and developed countries. Similarly, Shandra and colleagues ( 2009 ) find evidence that poor nations with higher levels of forestry export flows to rich nations tend to have higher rates of deforestation.

Analogous to trade, the influence of FDI on the environment can be divided into a scale, composition, and technology effect. The arguments are quite similar to the trade context, with slight differences concerning the technology and composition effects. While the technology effect in the context of trade rests on the assumption that trade ties lead to access of better (greener) technology, in the context of FDI a foreign investor opens a production plant in the host country with its corresponding technology. In particular, it is argued that foreign investors typically rely on newer and greener technologies, which supposedly lead to technology development, diffusion, and transfer (Araya, 2002 ). One example is Novo Nordisk, a Danish pharmaceutical company, which opened a joint venture in China and used the latest technology to treat the plant’s wastewater (Eriksen & Hansen, 1999 ).

In addition to such firm-level technology transfer, it is argued that there can also be a spillover effect. In general, technology spillovers can occur via human capital upgrading and employment turnover; increased competition forcing local firms to become more efficient; and supply chain requirements as well as imitation of technology by local firms (Birdshall & Wheeler, 1993 ; Chudnovsky & Lopez, 2003 ). Moreover, foreign firms that invest in developing countries are usually large and have more resources available for research and development as well as for environmental management systems. As local firms in developing countries are mostly reliant on learning and copying from more advanced firms, they might be compelled to adopt the more stringent environmental practices of those advanced firms (Zarsky, 1999 , p. 8). However, it is also possible that foreign firms adapt to the local context, implying that the environmental standards might ultimately be below those in their home country. Evidence on the diffusion of technologies by MNCs has so far been mixed (Chudnovsky & Lopez, 2003 ).

Finally, the composition effect holds that FDI is supposed to lead to a more efficient allocation of resources among economies. That is, the production of goods will take place with lower capital per unit of output and lower input than without economic liberalization, which would imply a positive effect of both FDI and trade. However, whether this composition effect is indeed ultimately positive for the environment will depend also on the particular situation of a country (e.g., whether the investment implies a change from the first (agrarian, resource extraction) to the second (manufacturing) or to the third (services) sector) (Araya, 2002 ).

The most debated effect of trade and FDI on environmental quality is exactly this composition effect. An important consequence of trade and FDI is that they allow each country to specialize in those activities in which they have a comparative advantage, that is, activities that they perform relatively well (Caves, Frankel, & Jones, 2002 ; Cole, 2004 ). Whether this change in the allocation or composition of industry will bring about an increase (decrease) in pollution depends on whether a particular country has a comparative advantage in a more (less) polluting industry (Cole, 2004 ). However, the literature provides two competing approaches for determining comparative advantage: the factor endowment theory (FET) and the pollution haven hypothesis (PHH).

On the one hand, standard trade theory (i.e., the Hecksher-Ohlin model) asserts that trade leads to more production of goods that are intensive in that factor that is relatively abundant in the country concerned. If the comparative advantage derives from the distribution of world endowments of factors of production, 4 countries where capital is relatively abundant will export capital-intensive goods (Rogowski, 2006 ). For developing countries, this would imply a specialization in labor-intensive industries. Since polluting industries, such as chemicals, pulp and paper, or oil refining industries tend to be capital intensive, this would imply that they should remain located in industrialized countries (Antweiler et al., 2001 ; Nordstroem & Vaughan, 1999 ). Consequently, standard trade theory would predict that an increase in trade leads to a reduction of pollution in developing countries since their comparative advantage lies in labor intensive and thus less pollution-intensive production.

The pollution haven hypothesis (PHH), on the contrary, holds that because of their usually rather low levels of environmental regulation, developing countries have a comparative advantage in pollution-intensive production (Copeland & Taylor, 1994 ; Dasgupta & Mäler, 1995 ; see also Taylor, 2005 ). Therefore, due to the composition or allocation effect of FDI, more polluting industries would tend to settle in those countries that have laxer environmental regulations (Hoffmann, Lee, Ramasamy, & Yeung, 2005 ; Jaffe, Peterson, Portney, & Stavins, 1995 ; Stafford, 2000 ). Consequently, it is argued that the effect of trade and FDI on pollution may only be positive for countries with stricter environmental regulations, which will most likely be higher-income countries. Some authors even claim that the threat of polluting industries locating in countries with laxer environmental regulations will lead to a competition between countries to offer those industries a better production environment and therefore to a regulatory race to the bottom (Drezner, 2001 ; Revesz, 1992 ). We discuss this latter argument in the next section.

In contrast, several studies argue that along with trade and foreign direct investment, newer and cleaner technologies tend to spread since firms from industrialized countries possess better and usually also greener technology (Eskeland & Harrison, 2003 ), leading to a pollution halo instead of a pollution haven effect. 5 In this view “the best way to diffuse best practice production techniques” (Zarsky, 1999 , p. 5) is via FDI (see also Gallagher & Zarsky, 2007 ; Prakash & Potoski, 2006a , 2007 ).

Despite these rather clear-cut theoretical arguments, empirical studies testing the pollution haven and pollution halo hypotheses and trying to estimate the impact of FDI on the environment have not yet delivered conclusive results. For instance, while some studies find, albeit modest, support for the pollution haven hypothesis with its negative consequences on the environment (e.g., Aklin, 2016 ; Cole & Elliott, 2003 ; He, 2006 ; Hoffmann et al., 2005 ; Kleemann & Abdulai, 2013 ; Koubi, Böhmelt, & Bernauer, 2015 ; Mani & Wheeler, 1998 ; Xing & Kolstad, 2002 ), others fail to do so and tend to support the concept of pollution halos in explaining a beneficial impact of FDI on the environment (e.g., Elliott & Shimamoto, 2008 ; Eskeland & Harrison, 2003 ; Kearsley & Riddel, 2010 ; Kellenberg, 2009 ; Potoski, 2006a , b ; Wheeler, 2001 ; Zeng & Eastin, 2007 ). 6 Yet others find no effect (Javorsik & Wei, 2004 ; Spilker, 2013 ), find support for both arguments (Kim & Adilov, 2012 ), or point to conditional effects (Lan, Kakinaka, & Huang, 2012 ; Manderson & Kneller, 2012 ). For instance, Lan and colleagues ( 2012 ), using data on Chinese provinces and conditioning the relationship between FDI and pollution on human capital levels, show that the pollution haven hypothesis holds only in provinces with low human capital, whereas FDI is associated with less pollution in provinces with the higher levels of human capital, due to a “technology effect.”

Concerning evidence on the production plant level, many studies show that foreign-owned plants are usually less pollution intensive and use greener technology than domestic plants in developing countries (Blackman & Wu, 1999 ; Eskeland & Harrison, 2003 ; Gentry, 1998 ; Ivarsson & Alvstam, 2005 ; Li & Yeung, 1999 ). In contrast, using survey evidence from Mexico, Dasgupta and colleagues ( 1998a , p. 17) find that foreign investment has no separate effect on environmental effort. They measure environmental effort by the adoption of ISO 14000 type procedures for pollution management, and by the use of plant personnel for environmental inspection and control. Hettige, Huq, Pargal, and Wheeler ( 1996 ) provide a summary of three studies from Asia that also do not find significant influence of FDI on firm-level environmental performance after controlling for firm size and the age of the plant. This means that larger and newer firms, whether they are foreign or not, are usually greener. In addition, these studies find that it is not ownership structures that matter, but rather regulation and community pressure. “Apparently, richer and more educated communities are able to bargain effectively with firms” (Zarsky, 1999 , p. 14) to pressure them to introduce higher environmental standards.

These heterogeneous results suggest that the influence of trade and FDI on the environment is likely to depend, among other things, on (i) differences in technology between industrial and developing countries (Dean, Lovely, & Wang, 2009 ) and the human capital necessary to reap the technological benefits (Lan et al., 2012 ); (ii) the stringency level of environmental regulations (Ben Kheder & Zugravu, 2012 ); (iii) well-defined property rights and functioning political institutions (Jayadevappa & Chhatre, 2000 ; Spilker, 2013 ); (iv) corruption levels in the host country 7 (Cole, Elliott, & Fredriksson, 2006 ); and (v) the pollution intensity of multinationals (Manderson & Kneller, 2012 ).

An additional reason for why in most studies no pollution haven effects have been found is that abatement costs are small compared to other production costs, such as investments in infrastructure (Jaffe et al., 1995 ). This would imply that the reason for why studies do not find pollution haven effects is not because abatement costs are too low in developing countries but because they are too low in industrialized countries, implying that firms do not need to fully internalize the environmental costs they are causing (Zarsky, 1999 ). A further reason seems to be that firms are afraid of negative reputation effects if they violate environmental norms (Dasgupta et al., 1998 ).

Economic Globalization (Trade/FDI) and Environmental Regulation/Standards

Economic globalization also affects the environment via its effects on national regulation and standards. The theoretical literature postulates again different pathways through which economic globalization affects environmental regulation, and again some of them are positive and some negative for the environment.

“Race to the Bottom”

Several scholars argue that increased competition between companies induced by economic liberalization may cause a “race to the bottom” in environmental standards, because countries may weaken their environmental policies in order to (i) protect their industry from international competition (e.g., Esty & Geradin 1998 ; Prakash & Potoski, 2006a , b ); or (ii) to attract foreign firms and foreign direct investment based on low costs of environmental protection, which operate in a similar fashion as low labor costs (e.g., Copeland & Taylor, 2004 ; Sheldon, 2006 ). Hence, the expectation is that developed countries will refrain from adopting more stringent environmental regulations and might even weaken existing standards due to competition with countries that have laxer environmental standards. Conversely, less-developed countries will adopt laxer environmental standards in order to attract multinational corporations and export pollution-intensive goods (Esty & Geradin, 1998 ).

While various studies seek to provide empirical evidence on the nature and impact of these linkages, there is actually rather little evidence that countries lower their environmental standards in order to remain competitive (Grey & Brack, 2002 ; Wheeler, 2001 ). Recent exceptions are Cao and Prakash ( 2010 ) and Andonova, Mansfield, & Milner ( 2007 ). In particular, Cao and Prakash ( 2010 ) show that trade competition between countries that export similar products to the same countries results in both countries having higher air pollution, as measured by SO2 emissions. Similarly, Andonova and colleagues ( 2007 ) report that increasing trade openness in post-Communist countries is connected with laxer environmental regulation. These findings provide some of the rare evidence in favor of a race to the bottom (or at least a regulatory chill) argument.

Overall, however, it seems that multinational firms’ location decisions are determined more by other factors, such as labor costs, natural resources endowments, taxes, transportation, and market access, rather than the stringency of local environmental regulations (Drezner, 2001 ; Grey & Brack, 2002 ; Jaffe et al., 1995 ; Potoski, 2001 ). Yet, there is some anecdotal evidence with regard to the regulation of energy and taxation that favors the regulatory chill hypothesis, which states that countries abstain from tightening their environmental standards in order to stay competitive (Neumayer, 2001 ).

“Race to the Top”

The “race-to-the-top” argument, in contrast to the “race-to-the bottom” argument, suggests that economic liberalization induces an international improvement of environmental standards and, in turn, has a positive effect on the environment (e.g., Porter & van der Linde, 1995 ). For instance, Zeng and Eastin ( 2007 ) argue that in order to maintain access to foreign markets in developed countries, exporting firms in developing countries often fulfill the stricter environmental standards of those export destinations. In addition, fearing a potential dispute in the WTO, those firms tend to comply ex ante with stricter environmental standards. The “race-to-the-top” effect is often called the “California Effect,” after the example of California, which introduced stricter car emission controls than mandated by the U.S. Clean Air Act (Vogel, 1997 ). In 1990 , the Californian standard even became the national standard, thus serving as the most prominent example of a race to the top.

This argumentation is in line with the so-called Porter hypothesis, which states that a country can benefit from stricter environmental regulations because those foster innovation and efficiency and therefore improve competitiveness (Porter, 1990 ). Vogel ( 2000 ) reports another country example, namely, Israel: In order to be able to export to the EU market, Israel introduced EU pesticides standards. This evidence in favor of the California effect is further supported by several studies (Bernauer & Caduff, 2004 ; Christmann & Taylor, 2001 ; Prakash & Potoski, 2006a , b ; 2017 ; Zeng & Eastin, 2011 ). However, Vogel ( 2000 ) cautions against too much optimism since the California effect may only take place in very narrow circumstances, for example, if a country is aiming to enter into a trade agreement with the European Union or other industrialized countries. In addition, this effect seems to hold predominantly for products (e.g., cars that have a catalytic converter), and not for production processes (Bernauer & Caduff, 2004 ). Furthermore, there exists only weak evidence that environmental regulations actually stimulate innovation (Ambec & Barla, 2006 ).

Overall, the literature therefore suggests that while statements of a “race to the bottom” in environmental standards are largely exaggerated, hopes of a “race to the top” in environmental standards triggered by economic competition are also likely to be too optimistic.

Political Globalization and the Environment

As mentioned in the introduction, in addition to trade and FDI, the recent literature on IPE and the environment more recently also examines how international organizations (IOs) may affect environmental policy and environmental outcomes. Some studies analyze how country membership in IOs as a whole affects the quality of any given country’s environment (Bernauer, Kalbhenn, Koubi, & Spilker, 2010 ; Spilker, 2012 ; Ward, 2006 ). Other studies focus more on specific organizations, such as the World Trade Organization (WTO), and evaluate, for instance, whether in trade disputes over environmental standards economic or environmental concerns tend to prevail.

IOs and the Environment

The existing literature hypothesizes that memberships in IOs tend to improve both environmental performance and the likelihood of joining international environmental treaties (Bernauer et al., 2010 ; Spilker, 2012 , 2013 ; Ward, 2006 ). With regard to environmental treaty ratification, Bernauer and colleagues ( 2010 ) provide evidence that countries that are already part of a larger network of IOs also behave more cooperatively when it comes to environmental treaty ratification. Since IOs tend to discourage environmentally damaging behavior, allow for mediation and problem solving, the sharing of information and the generation of norms and trust, countries that are members to more general IOs tend to join more environmental treaties. Spilker and Koubi ( 2016 ), on the other hand, show that IO membership does not affect treaty ratification.

With regard to environmental outcomes, Ward ( 2006 ) examines whether countries that are more central to the network of international environmental regimes act more sustainably at the national level. Using social network analysis, he finds that countries that are more central also care more about domestic environmental quality. Moreover, it seems that membership in IOs affects the capability of developing countries to improve their environmental performance by allowing for information and technology transfer. This channel of influence is especially important since developing countries often lack the necessary resources and technologies to mitigate environmental degradation (Dasgupta et al., 2002 ; Porter, Brown, & Chasek, 2000 ). This view is supported by Spilker ( 2012 , 2013 ) who argues that membership in IOs can improve the environmental performance of developing countries, by linking different issues, promoting the general idea of environmental sustainability, and providing a channel through which these countries receive technology and resources necessary to reduce pollution. Examples of IOs that spread information and technology that also benefit the environment include, for instance, the World Bank, the Food and Agriculture Organization (FAO), and the World Health Organization (WHO). For example, the World Bank as part of its general “greening” strategy created the Global Environment Facility (GEF), which provides mainly developing countries with grants and technical assistance to address environmental problems such as climate change, ozone depletion, biodiversity loss, and air and water pollution (El-Ashry, 1993 ).

World Trade Organization

One of these organizations, the World Trade Organization (WTO), has received particularly strong attention in the context of the trade–environment debate. This is due to two reasons. First, some environmental regulations of WTO member countries have been challenged via the WTO dispute settlement mechanism (DSM) because of their trade inhibiting effects. Second, the literature has focused on whether environmental disputes in the WTO are as such more difficult to settle relative to other disputes, for example, disputes over tariff barriers or subsidies.

The WTO and its predecessor, the General Agreement on Tariffs and Trade (GATT), have been established to promote trade liberalization between member countries. It is based among other things on the principle of “national treatment.” This implies that WTO member countries are not allowed to discriminate against other member countries’ products based on their national origin. However, some exceptions to this general rule exist, which are important for the environmental context, as member countries can justify trade barriers with reference to a variety of public policy-based concerns (Kelemen, 2001 ; Kelly, 2003 ). In particular, trade restrictions, as long as they do not represent arbitrary or unjustifiable discrimination and are thus disguised trade barriers, can be justified with reference to the protection of human, animal, or plant life and health (GATT Article XX[b]) and the conservation of exhaustible natural resources (GATT Article XX[g]).

Over the course of its existence, the DSM of the GATT/WTO has had to deal with a number of trade disputes over environmental issues. In the first of a series of important environment–trade disputes, Tuna-Dolphin I , Mexico challenged a U.S. tuna import ban that was motivated by U.S. regulation to prevent the killing of dolphins in the context of tuna fishing. This dispute differed from previous GATT disputes on several accounts (Kelemen, 2001 ). It was the first dispute in which the defendant country, in this case the United States, tried to protect a species globally, and not a domestic resource. Furthermore, the United States intended to influence another country’s environmental policy, in this case the use of dolphin-safe fishing nets. Also, there was much public attention. The dispute panel ruled in favor of Mexico, stating that the U.S. trade embargo was unjustified because (i) the regulation aimed at production processes, and not at a product; and (ii) the regulation intended to change another country’s regulations (Kelemen, 2001 ).

While most trade–environment disputes that followed Tuna-Dolphin I were also ruled in favor of trade liberalization, the GATT and the WTO DSM is thought to have become more “environmental friendly” over time (Kelemen, 2001 ; Kelly, 2003 ; Young, 2005 ). For example, in Tuna-Dolphin II , which was initiated only one year after Tuna- Dolphin I , the dispute panel slightly changed the direction of the first dispute ruling by stating that trade barriers can be justified in terms of trying to influence another country’s environmental regulation if they are based on an international environmental agreement. In one of the following environment–trade disputes, Shrimp-Turtle , which was similar to the Tuna-Dolphin disputes, the WTO DSM again issued a general pro-trade liberalization ruling, but introduced further pro-environment principles (Kelemen, 2001 ; Kelly, 2003 ). First, the panel upheld the idea, already put forward in Tuna-Dolphin II , that a country can use trade restrictions to protect an environmental resource outside its borders. Second, the panel ruled that not only environmental regulation based on product standards can be the basis of trade restrictions but also regulation aiming at production processes. And third, the panel allowed the submission of reports by non-governmental actors, such as NGOs and business groups. Hence, if designed properly, that is, by not discriminating between different WTO member states, countries do in principle have some room to maneuver in setting up or maintaining environmental policies that do have, simultaneously, trade-restricting effects.

In addition to these purely environmental disputes, the WTO DSM ruled on several disputes relating to sanitary and phytosanitary (SPS) measures, that is, on issues related to human, plant and animal health (Kelly, 2003 ). In the context of the SPS agreement of the WTO, the WTO allows trade restrictions if they are based on a scientific risk assessment (Bernauer, 2003 ; Kelly, 2003 ). Only one of these disputes, Asbestos , has so far been ruled in favor of the defendant country, in that case France. More precisely, the environmental measure, a ban on the import of asbestos, was upheld. In all other disputes, for example, Canada v. Australia on Salmon , the United States v. Japan on Agricultural Products , and the United States v. the EU on Beef-Hormones and on Genetically Modified Crops , the panel ruled against the defendant and thus the environmental measure because of issues relating to risk assessment. In probably the most famous of these cases, Beef-Hormones , the panel criticized that the EU’s ban on hormone-treated beef lacked a scientific basis (Bernauer, 2003 ; Kelly, 2003 ).

Overall, it appears that free trade does not consistently trump the environment in WTO disputes, as many critics like to point out. Studies on trade–environment disputes in the European Court of Justice (ECJ) have arrived at similar findings (e.g., Kelemen, 2001 ). While critics are right in the sense that many trade–environment disputes have been ruled in favor of trade liberalization, the WTO DSM has established more stringent trade–environmental principles over time. As long as environmental measures do not “arbitrarily or unjustifiably discriminate between producers operating under similar conditions or constitute disguised restrictions on trade” (Kelly, 2003 , p. 136), the WTO and also the ECJ tend to regard them as legitimate, even if they implicate trade barriers.

Furthermore, in contrast to what critics of the WTO often point out, disputes on environmental issues are clearly a minority of all disputes (Kelly, 2003 ; Sattler & Bernauer, 2011 ; Young, 2005 ). As shown by Bernauer and Sattler ( 2006 ), these environmental disputes are even less likely than other disputes to escalate from the first dispute process step, consultation between the disputing parties, to the second dispute process step, the official panel proceeding. However, once these disputes escalate to the panel stage they are less likely to be settled successfully than other types of disputes.

Globalization and the Environment: The Micro Level

In this section we discuss the most recent strand of the IPE and environment literature dealing with the micro level, that is, how citizens evaluate economic openness in light of potential environmental concerns. This literature is relevant in our context here because public opinion is an important factor in policy making, and because the tension between globalization and the environment manifests itself not only at the macroscopic scale (e.g., in the WTO, government regulation, or environmental conditions), but also at the level of the individual citizen. The fact that public pressure has led governments to include environmental clauses in most of the recent preferential trade agreements is one obvious expression of this.

While the literature discussed so far focuses on the implications of trade for the environment, the micro-level literature turns this focus around and asks to what extent environmental concerns matter when citizens form preferences about globalization. There is a plethora of studies on individual-level trade attitudes (Baker, 2003 , 2005 ; Beaulieu, 2002 ; Fordham & Kleinberg, 2012 ; Hainmueller & Hiscox, 2006 ; Mansfield & Mutz, 2009 ; Mayda & Rodrik, 2005 ; O’Rourke & Sinnott, 2001 ; Schaffer & Spilker, 2016 ; Scheve & Slaughter, 2001 ; Spilker, Schaffer, & Bernauer, 2012 ). However, only recently have scholars begun to examine how environmental concerns may shape preferences (public opinion) concerning international trade or economic globalization more broadly.

Bechtel, Bernauer, and Meyer ( 2012 ) argue that the environmental consequences of intensified international economic exchange are, for many individuals in industrialized countries, an important element in their evaluation of trade policies. The authors contend that especially individuals with strong pro-environmental attitudes are likely to associate trade liberalization with increased environmental degradation and hence are less supportive of free trade. Their findings, relying on survey data from Switzerland, are in line with this expectation: individuals with greener attitudes tend to be less supportive of economic globalization.

Bernauer and Nguyen ( 2015 ) build on this earlier work in their study on environmental attitudes and trade preferences in developing countries. Relying on a combination of new survey data and survey experiments in Costa Rica, Nicaragua, and Vietnam, they show that the implications of post-material value arguments (Franzen & Meyer, 2010 ; Inglehart, 1995 , 1997 ) do not seem to hold for those countries. Despite low-income levels, citizens in developing countries appear to care about negative effects of free trade on the environment. 8 Interestingly, however, in contrast to the respondents in the Swiss study by Bechtel et al. ( 2012 ), environmental concerns of citizens in the developing countries under study do not translate into reduced support for free trade. 9

These findings are supported by two other recent studies on trade preferences in developing countries. Using conjoint experiments to understand how citizens evaluate different aspects of preferential trade agreements and the involved partner countries, Spilker, Bernauer, and Umaña ( 2016a , b ) show that people prefer trade agreements including environmental provisions and trade partner countries with higher environmental standards. That is, in contrast to expectations based on post-material value arguments, citizens in developing countries tend to support environmental protection; and, in contrast to their industrialized counterparts, they do not seem to view environmental protection as conflicting with trade liberalization.

This review of existing research on the globalization–environment nexus shows that we have come a long way in understanding, both theoretically and empirically, the mechanisms that link, both indirectly and directly, different facets of globalization to environmental policy and environmental outcomes at national and international levels. It also reveals that the relationship between globalization and the environment cannot be adequately understood without considering the simultaneously occurring trends and underlying mechanisms that operate through changes in economic growth; the scale, composition and technique effects of economic globalization; as well as political globalization and public opinion.

The general picture emerging from this research defies simplistic statements in contemporary public debates on the globalization–environment nexus, notably those arguing in unqualified form that globalization is good or bad for the environment. Counter to optimistic claims that economic globalization increases welfare, which according to the EKC logic then quasi-automatically results in better environmental protection, both theoretical and empirical findings clearly point to environmental damage resulting from economic openness. Yet, counter to pessimistic claims associated with a race-to-the-bottom logic and pollution havens, the scientific literature on the trade–environment nexus has come up with convincing theoretical and empirical findings that point to conditions under which environmental damage resulting from economic globalization can be minimized. The most important antidotes in this regard seem to emanate from trading-up effects, Porter-hypothesis effects, entanglement of countries in international organizations, and also domestic-level factors such as public demand for minimizing environmental damage from economic openness and development. Table 1 provides an overview of all empirical studies discussed in this article. It also provides details on the variables used, the sample and estimation procedures, as well as a short overview of the results of each study.

Table 1: Overview of Empirical Studies

BOD: Biological Oxygen Demand

CO: Carbon Monoxide

CO 2 : Carbon Dioxide

MEA: Multilateral Environmental Agreement

OLS: Ordinary Least Squares

PC: per capita

PHH: Pollution Haven Hypothesis

PM: Particulate Matter

SO 2 : Sulfur Dioxide

SPM: Suspended Particulate Matter

If not otherwise specified trade openness is measured as the sum of imports and exports divided by GDP

Further research could focus on several issues. First, the existing literature is somewhat stronger with respect to the economic mechanisms connecting economic openness and environmental protection than with respect to political mechanisms. In particular, it would be worthwhile to explore in greater detail the implications of international organizations, formal and informal international political networks, as well as international policy diffusion for domestic-level environmental protection and environmental quality.

Second, much more research at the firm and plant level is needed, notably in view of the fact that the proportion of international trade that is intrafirm trade has increased very strongly. Such research should be systematically linked to a consumption-based approach to measuring and explaining environmentally damaging human activity.

Finally, on the presumption that public opinion is an important driver of policy, there is a need for more research on how citizens relate various facets of globalization with environmental quality, and what conclusions they draw from this with respect to their preferences for particular economic and environmental policies.

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1. The Environmental Kuznets Curve (EKC) owes its name to Simon Kuznets ( 1955 ), who first proposed an inverted U-shaped relationship between the level of income and income inequality.

2. The income elasticity of environmental quality demand means that after a particular level of income has been reached, the willingness to pay for a clean environment rises by a greater proportion than income. Consequently, when a country achieves a sufficiently high standard of living, the expectation is that people attach increasing value to environmental amenities; that is, the environment is no longer a luxury public good.

3. Copeland and Taylor ( 2004 ) provide a critical review of the theoretical and empirical work on the relationship between trade, economic growth, and the environment.

4. A comparative advantage could also derive from endowments of natural resources. In this case, a country with abundant natural resources, say oil or forests, will most likely export them, and thus trade is likely to damage the environment.

5. In addition to FDI, (Chudnovsky & Lopez, 2003 ) list three other mechanisms through which technology can be diffused to developing countries via Multinational Corporations (MNCs): joint ventures, purchase of technology by firms in developing countries in contractual form (e.g. patents or licensing), and reverse engineering, imitation, or copying.

6. Levinson ( 2009 , 2010 ) reports that for the United States over the past 30 years, there has been no significant offshoring of pollution via more importing of polluting goods.

7. For example, Damania and colleagues ( 2003 ) and Welsch ( 2004 ) report that corruption can cause environmental degradation by reducing the effectiveness of environmental regulations.

8. The finding that economic affluence and environmental concern are positively correlated is also questioned by various other studies (e.g., Brechin, 1999 ; Dunlap & York, 2008 ; Hao, 2016 ; Jorgenson & Givens, 2014 ).

9. The very few studies evaluating how economic globalization affects individual environmental concerns, in contrast, show that individuals living in more economically globalized countries (measured by exports as percent of GDP) show less environmental concern than individuals living in less globalized countries (Hao, 2016 ; Jorgenson & Givens, 2014 ). However, these results should be interpreted with some caution for at least two reasons. First, these studies rely on purely correlational, that is, nonexperimental, research designs, which can be problematic in the study of attitude formation since one can hardly identify causal mechanisms. And second, these studies only look at countrywide globalization and its effect on individual attitudes, thereby treating the effect of globalization within one country as constant for all individuals. However, individual-level assessment of globalization and thus its influence on environmental concern might strongly depend on individual level characteristics.

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MSc International Political Economy

• Graduate taught
• Department of International Relations
• Application code M1UW
• Starting 2024
• Home full-time: Closed
• Home part-time: Closed
• Overseas full-time: Closed
• Location: Houghton Street, London

The MSc in International Political Economy (IPE) offers a multidisciplinary perspective on international economic and power relations, essential to understanding an increasingly globalised world.

The study of international political economy is the study of interactions between markets and politics; the influence of markets on politics and the influence of policy on markets. The core of IPE is international money and international finance, and there is a particular focus on the 2008 financial crisis, its causes and its consequences. Other central topics include international trade and investment, which looks at the drivers of market globalisation and factors which shape the flow of trade and investment, and the international political economy and the environment, specifically, what impedes a genuine agreement on climate change.

Alternatively, we offer the  MSc International Political Economy (Research)  programme, which has the same core course, International Political Economy, but entails a compulsory methodology course.

Programme details

For more information about tuition fees and entry requirements, see the fees and funding and assessing your application sections.

Entry requirements

Minimum entry requirements for msc international political economy.

Upper second class honours (2:1) degree or equivalent in politics, economics, history, international relations or a similar discipline.

Competition for places at the School is high. This means that even if you meet the minimum entry requirement, this does not guarantee you an offer of admission.

If you have studied or are studying outside of the UK then have a look at our  Information for International Students  to find out the entry requirements that apply to you.

Assessing your application

We welcome applications from all suitably qualified prospective students and want to recruit students with the very best academic merit, potential and motivation, irrespective of their background.

We carefully consider each application on an individual basis, taking into account all the information presented on your application form, including your:

- academic achievement (including predicted and achieved grades) - statement of academic purpose - two academic references - CV

See further information on supporting documents

You may also have to provide evidence of your English proficiency, although you do not need to provide this at the time of your application to LSE.  See our English language requirements .

When to apply

Applications for this programme are considered on a rolling basis, meaning the programme will close once it becomes full. There is no fixed deadline by which you need to apply, however, to be considered for any LSE funding opportunity, you must have submitted your application and all supporting documents by the funding deadline. See the fees and funding section for more details. 

Fees and funding

Every graduate student is charged a fee for their programme.

The fee covers registration and examination fees payable to the School, lectures, classes and individual supervision, lectures given at other colleges under intercollegiate arrangements and, under current arrangements, membership of the Students' Union. It does not cover  living costs  or travel or fieldwork.

Tuition fees 2024/25 for MSc International Political Economy

Home students: £29,472 Overseas students £29,472

The Table of Fees shows the latest tuition amounts for all programmes offered by the School.

For this programme, the tuition fee is the same for all students regardless of their fee status. However any financial support you are eligible for will depend on whether you are classified as a home or overseas student, otherwise known as your fee status. LSE assesses your fee status based on guidelines provided by the Department of Education.

Further information about fee status classification.

Fee reduction

Students who completed undergraduate study at LSE and are beginning taught graduate study at the School are eligible for a  fee reduction  of around 10 per cent of the fee.

Scholarships and other funding

The School recognises that the  cost of living in London  may be higher than in your home town or country, and we provide generous scholarships each year to home and overseas students.

This programme is eligible for needs-based awards from LSE, including the  Graduate Support Scheme ,  Master's Awards , and  Anniversary Scholarships . 

Selection for any funding opportunity is based on receipt of an offer for a place and submitting a Graduate Financial Support application, before the funding deadline. Funding deadline for needs-based awards from LSE:  25 April 2024 .

In addition to our needs-based awards, LSE also makes available scholarships for students from specific regions of the world and awards for students studying specific subject areas.  Find out more about financial support.

Government tuition fee loans and external funding

A postgraduate loan is available from the UK government for eligible students studying for a first master’s programme, to help with fees and living costs. Some other governments and organisations also offer tuition fee loan schemes.

Find out more about tuition fee loans

Further information

Fees and funding opportunities

Information for international students

LSE is an international community, with over 140 nationalities represented amongst its student body. We celebrate this diversity through everything we do.  

If you are applying to LSE from outside of the UK then take a look at our Information for International students . 

1) Take a note of the UK qualifications we require for your programme of interest (found in the ‘Entry requirements’ section of this page). 

2) Go to the International Students section of our website. 

3) Select your country. 

4) Select ‘Graduate entry requirements’ and scroll until you arrive at the information about your local/national qualification. Compare the stated UK entry requirements listed on this page with the local/national entry requirement listed on your country specific page.

Part-time study Part time study is only available for students who do not require a student visa.

Programme structure and courses

You will take the compulsory course and complete a 10,000-word dissertation. You will also choose courses from a range of international relations options. 

(* denotes half unit)  

International Political Economy*  Provides an advanced introduction to concepts and contending approaches in international political economy, and an overview of the evolution of international economic relations since the late 19th century.

Dissertation in International Political Economy An independent research project of 10,000 words on an approved topic of your choice.  

Courses to the value of two and a half units from a range of options.

For the most up-to-date list of optional courses please visit the relevant  School Calendar page .

You must note, however, that while care has been taken to ensure that this information is up to date and correct, a change of circumstances since publication may cause the School to change, suspend or withdraw a course or programme of study, or change the fees that apply to it. The School will always notify the affected parties as early as practicably possible and propose any viable and relevant alternative options. Note that the School will neither be liable for information that after publication becomes inaccurate or irrelevant, nor for changing, suspending or withdrawing a course or programme of study due to events outside of its control, which includes but is not limited to a lack of demand for a course or programme of study, industrial action, fire, flood or other environmental or physical damage to premises.

You must also note that places are limited on some courses and/or subject to specific entry requirements. The School cannot therefore guarantee you a place. Please note that changes to programmes and courses can sometimes occur after you have accepted your offer of a place. These changes are normally made in light of developments in the discipline or path-breaking research, or on the basis of student feedback. Changes can take the form of altered course content, teaching formats or assessment modes. Any such changes are intended to enhance the student learning experience. You should visit the School’s  Calendar , or contact the relevant academic department, for information on the availability and/or content of courses and programmes of study. Certain substantive changes will be listed on the  updated graduate course and programme information  page.

Teaching and assessment

Contact hours and independent study.

Within your programme you will take a number of courses, often including half unit courses and full unit courses. In half unit courses, on average, you can expect 20-30 contact hours in total and for full unit courses, on average, you can expect 40-60 contact hours in total. This includes sessions such as lectures, classes, seminars or workshops. The majority of the teaching takes place in the Autumn and Winter Terms. Hours vary according to courses and you can view indicative details in the  Calendar  within the Teaching section of each  course guide .

You are also expected to complete independent study outside of class time. This varies depending on the programme, but requires you to manage the majority of your study time yourself, by engaging in activities such as reading, note-taking, and research.

Teaching methods

LSE is internationally recognised for its teaching and research and therefore employs a rich variety of teaching staff with a range of experience and status. In the International Relations Department, courses at master's level will be taught by members of faculty, including LSE teaching fellows, assistant professors, associate professors and professors, as well as guest teachers and visiting members of staff who are experts in their field. You can view indicative details for the teacher responsible for each course in the relevant  course guide .

All taught courses are required to include formative coursework which is unassessed. It is designed to help prepare you for summative assessment which counts towards the course mark and to the degree award. LSE uses a range of formative assessment, such as essays, problem sets, case studies, reports, quizzes, mock exams and many others. Summative assessment may be conducted during the course and/or by final examination at the end of the course. You must also submit a 10,000-word dissertation at the end of the course. An indication of the formative coursework and summative assessment for each course can be found in the relevant  course guide .

Academic support

You will also be assigned an academic mentor who will be available for guidance and advice on academic or personal concerns.

There are many opportunities to extend your learning outside the classroom and complement your academic studies at LSE.  LSE LIFE  is the School’s centre for academic, personal and professional development. Some of the services on offer include: guidance and hands-on practice of the key skills you will need to do well at LSE: effective reading, academic writing and critical thinking; workshops related to how to adapt to new or difficult situations, including development of skills for leadership, study/work/life balance and preparing for the world of work; and advice and practice on working in study groups and on cross-cultural communication and teamwork.

LSE is committed to enabling all students to achieve their full potential and the School’s  Disability and Wellbeing Service  provides a free, confidential service to all LSE students and is a first point of contact for all disabled students.

Student support and resources

We’re here to help and support you throughout your time at LSE, whether you need help with your academic studies, support with your welfare and wellbeing or simply to develop on a personal and professional level.

Whatever your query, big or small, there are a range of people you can speak to who will be happy to help.  

Department librarians   – they will be able to help you navigate the library and maximise its resources during your studies. 

Accommodation service  – they can offer advice on living in halls and offer guidance on private accommodation related queries.

Class teachers and seminar leaders  – they will be able to assist with queries relating to specific courses. 

Disability and Wellbeing Service  – they are experts in long-term health conditions, sensory impairments, mental health and specific learning difficulties. They offer confidential and free services such as  student counselling,  a  peer support scheme  and arranging  exam adjustments.  They run groups and workshops.  

IT help  – support is available 24 hours a day to assist with all your technology queries.   

LSE Faith Centre  – this is home to LSE's diverse religious activities and transformational interfaith leadership programmes, as well as a space for worship, prayer and quiet reflection. It includes Islamic prayer rooms and a main space for worship. It is also a space for wellbeing classes on campus and is open to all students and staff from all faiths and none.   

Language Centre  – the Centre specialises in offering language courses targeted to the needs of students and practitioners in the social sciences. We offer pre-course English for Academic Purposes programmes; English language support during your studies; modern language courses in nine languages; proofreading, translation and document authentication; and language learning community activities.

LSE Careers  ­ – with the help of LSE Careers, you can make the most of the opportunities that London has to offer. Whatever your career plans, LSE Careers will work with you, connecting you to opportunities and experiences from internships and volunteering to networking events and employer and alumni insights. 

LSE Library   –   founded in 1896, the British Library of Political and Economic Science is the major international library of the social sciences. It stays open late, has lots of excellent resources and is a great place to study. As an LSE student, you’ll have access to a number of other academic libraries in Greater London and nationwide. 

LSE LIFE  – this is where you should go to develop skills you’ll use as a student and beyond. The centre runs talks and workshops on skills you’ll find useful in the classroom; offers one-to-one sessions with study advisers who can help you with reading, making notes, writing, research and exam revision; and provides drop-in sessions for academic and personal support. (See ‘Teaching and assessment’). 

LSE Students’ Union (LSESU)  – they offer academic, personal and financial advice and funding.  

PhD Academy   – this is available for PhD students, wherever they are, to take part in interdisciplinary events and other professional development activities and access all the services related to their registration. 

Sardinia House Dental Practice   – this   offers discounted private dental services to LSE students.  

St Philips Medical Centre  – based in Pethwick-Lawrence House, the Centre provides NHS Primary Care services to registered patients.

Student Services Centre  – our staff here can answer general queries and can point you in the direction of other LSE services.  

Student advisers   – we have a  Deputy Head of Student Services (Advice and Policy)  and an  Adviser to Women Students  who can help with academic and pastoral matters.

Preliminary reading

J Frieden  D Lake, and J B  Lawrence (eds.) International Political Economy  (5th edition, W.W. Norton, 2010) R Gilpin  Global Political Economy: understanding the international economic order  (Princeton University Press, 2001) T Oatley  International Political Economy: interest and institutions in the global economy  (5th edition, Pearson Longman, 2012) J Ravenhill  Global Political Economy  (3rd edition, Oxford Press, 2011) A Walter and G Sen  Analyzing the Global Political Economy  (Princeton University Press, 2009)

Student life

As a student at LSE you’ll be based at our central London campus. Find out what our campus and London have to offer you on academic, social and career perspective. 

Student societies and activities

Your time at LSE is not just about studying, there are plenty of ways to get involved in  extracurricular activities . From joining one of over 200 societies, or starting your own society, to volunteering for a local charity, or attending a public lecture by a world-leading figure, there is a lot to choose from. 

The campus 

LSE is based on one  campus  in the centre of London. Despite the busy feel of the surrounding area, many of the streets around campus are pedestrianised, meaning the campus feels like a real community. 

Life in London 

London is an exciting, vibrant and colourful city. It's also an academic city, with more than 400,000 university students. Whatever your interests or appetite you will find something to suit your palate and pocket in this truly international capital. Make the most of career opportunities and social activities, theatre, museums, music and more. 

Want to find out more? Read why we think  London is a fantastic student city , find out about  key sights, places and experiences for new Londoners . Don't fear, London doesn't have to be super expensive: hear about  London on a budget . 

Student stories

Lauge skovgaard.

MSc International Political Economy Copenhagen, Denmark

This is a highly demanding programme with regards to the quantity and quality of expected work on behalf of the students. This has meant very hard work, but with a very high payoff. The department has close interaction with outside practitioners and institutions in the field, which has linked our studies to practical experience during the course of the year. Interacting with brilliant students from a wide range of backgrounds, outreaching and original researchers as well as top external practitioners has made the year a great experience.

There is no doubt that the School's name, and in particular my programme's high standard, opens many doors in the private and public sector – at national as well as international level. However, my time at LSE has made me want to continue within academia for some years to come. I hope to do a PhD within this field in the near future. 

Quick Careers Facts for the Department of International Relations

Median salary of our PG students 15 months after graduating: £32,000

Top 5 sectors our students work in:

• Government, Public Sector and Policy   
• Financial and Professional Services              
• Education, Teaching and Research            
• Information, Digital Technology and Data            
• International Organisations

The data was collected as part of the Graduate Outcomes survey, which is administered by the Higher Education Statistics Agency (HESA). Graduates from 2020-21 were the fourth group to be asked to respond to Graduate Outcomes. Median salaries are calculated for respondents who are paid in UK pounds sterling and who were working in full-time employment.

The programme has provided excellent prospects for early-career graduates seeking entry to graduate programmes at top global firms, as well as for experienced graduates looking to reposition themselves for more senior roles. We have alumni in banking and financial journalism and in major consulting companies such as Ernst & Young, as well as in a wide range of governmental and non-governmental organisations throughout the world. A good number of our graduates also continue on to research degrees and the academic profession

Further information on graduate destinations for this programme

Sebastian Ortiz

MSc International Political Economy, 2011 Secretary, Permanent Mission of Paraguay to the World Trade Organization

I chose my degree as it was closely related to my university background in economics and my career as a diplomat. I wanted to study a degree with a very strong base in economics plus some analysis of domestic and international politics. 

After finishing my master's at LSE I returned to the Ministry of Foreign Affairs to deal with issues in the MERCOSUR Trade Commission. My dissertation was centred on political economy aspects of the MERCOSUR's Trade Policy which was very useful for my job. 

I would advise you to take advantage of a such a large institute like LSE, go to as many public lectures as you can, stay every Friday evening at the George IV, meet as many people from different fields as you can, and do not hesitate to ask to book appointments with the academics.

I met very interesting people at LSE, made many very good friends, some of whom I still meet regularly with here in Geneva, at seminars and conferences. My time at LSE was one of the best experience of my life, one year was too short!

Support for your career

Many leading organisations give careers presentations at the School during the year, and LSE Careers has a wide range of resources available to assist students in their job search. Find out more about the  support available to students through LSE Careers .

Find out more about LSE

Discover more about being an LSE student - meet us in a city near you, visit our campus or experience LSE from home. 

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Related programmes, msc international relations.

Code(s) M1UR

MSc Political Science (Political Science and Political Economy)

Code(s) L2UX

MSc Political Economy of Europe

Code(s) L2EU

MSc Political Science (Global Politics)

Code(s) M2UG

MSc Development Studies

Code(s) Y2U6

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Political Economy

Political Economy. Understanding how societies work.

Faculty Chairs:  Jeff Frieden  &  Torben Iversen  

Political economy is the study of how politics affects the economy and how the economy in turn shapes politics. Training in political economy can help students understand how societies work; a useful skill whether they seek to become better policy analysts or more effective social reformers ( Frieden 2020 ). 

Topics in political economy include inequality (across class, gender, race, ethnicity), redistribution, economic development, globalization, macroeconomic policy, economic crises, populism, and environmental policy. For example, the last four decades have seen a sharp rise in inequality in rich democracies, yet government redistribution has not risen; why? Technological change has produced greater inequality and concentration of wealth; what role do governments play in amplifying or countering these trends? Why do some countries grow at a much faster pace than others? Trade has risen sharply for decades, but it is now under political attack; why? China has emerged as an economic superpower; what are the consequences for international politics? Women have been economically mobilized across the world over the past four decades; what are the political implications?    The Government Department’s political economy program offers a thorough introduction to theoretical approaches to political economy and important empirical cases among the advanced industrial countries and the developing world. It provides training for a broad range of careers in government, finance, international organizations, and think tanks. The program is also good preparation for applying to business schools, law schools, and graduate programs in political science and economics. 

Requirements :  Students must take three Government courses in political economy from the list of designated political economy courses below, including at least one Gov 94 undergraduate seminar. In addition, they must take at least one course on Economics from the list of courses below. All four courses for the political economy program must be taken for a letter grade. Working with their concentration advisers and faculty mentors, students develop their own Plans of Study to identify their academic goals and to select their courses accordingly. 

Double Counting: Students may use the 3 Government Department courses taken for the Political Economy program toward other Government concentration requirements, such as elective or subfield requirements, provided these classes would otherwise meet those requirements.

Possible Areas of Focus : In formulating their plans of study, students can choose to focus on specific aspects of political economy, such as international political economy, economic development, or inequality.  

Advising: Your concentration adviser (CA) is your primary contact for the Political Economy program. If you still have questions after talking with your CA, please contact Director of Undergraduate Studies Dr. Nara Dillon .

Declaring:  To officially join the Political Economy curricular program, concentrators   should   complete the Political Economy plan of study supplement and submit the completed form to the Government Department Undergraduate Manager,  Karen Kaletka . 

Political Economy Course s

Courses offered in AY2024-2025 are highlighted in bold below.

Government Courses on Political Economy  

• Gov 94ACH: Politics of Inequality in Latin America. Alisha Holland  
• Gov 94AU: Political Economy. Torben Iversen 
• Gov 94BD: Fighting Poverty. Nara Dillon
• Gov 94EK: Globalization and Private Governance. Michael Hiscox  
• Gov 94GM: Politics of Climate Change. Alexander Gard-Murray
• Gov 94HG: The Politics and Political Economy in Latin America, Fran Hagopian 
• Gov 94JF: The Political Economy of Economic Growth: The Past Thousand Years. Jeffry Frieden
• Gov 94KL: Advanced Topics in Formal Political Economy. Konstantin Matakos  
• Gov 94NB: Capital, Ideas, and Development in Latin America. Dan Epstein
• Gov 94ND: Global Cities in East Asia. Nara Dillon 
• Gov 94OA: Inequality and American Democracy. Theda Skocpol  
• Gov 94PI: Politics of Development in Africa. Pia Raffler
• Gov 94RG: A Revolt against Globalization? How Political Economies Change. Peter Hall
• Gov 94TR: The Politics of Economic Inequality. Thomas Remington 
• Gov 1015: Strategic Models of Politics. Sarah Hummel 
• Gov 1025: Political Economy and Its Future. Roberto Mangabeira Unger
• Gov 1108 : The Politics of Economic Inequality. Thomas Remington  
• Gov 1135: Political Economy of Development in Africa. Pia Raffler 
• Gov 1171: Making of Modern Politics. Peter Hall
• Gov 1203: Capitalism and Democracy in Central and Eastern Europe. Grzegorz Ekiert 
• Gov 1279 : Political Economy of East and Southeast Asia  Political Economy of East and Southeast Asia 
• Gov 1288: China’s Economic Development. Nara Dillon 
• Gov 1754: Science, Technology, and National Security: Japan in Global Perspective. Matthew Brummer
• Gov 1759: Behavioral Insights and Public Policy: Nudging for the Public Good. Michael Hiscox  
• Gov 1780: International Political Economy. Jeffry Frieden 
• HKS BGP 610: The Political Economy of Trade. Robert Lawrence 
• HKS BGP 670: Financial Crises: Concepts and Evidence. Carmen Reinhart  
• HKS DEV 130 : Why Are So Many Countries Poor, Volatile, and Unequal? Ricardo Hausman 

Economics Courses on Political Economy  

• Econ 10a: Principles of Economics: Microeconomics  
• Econ 1010a/1011a: Intermediate Microeconomics 
• Econ 1018: Cultural Economics. Alberto Alesina 
• Econ 1133: Authoritarian Superpower: The Political Economy of Modern China. David Yang
• Econ 1420: American Economic Policy. Summers & Liebman    
• Econ 1450: The Political Economy of Religion. Robert Barro and Rachel McCleary  
• Econ 1535: The Global Economy. Pol Antras
• Econ 1746: Financial and Economic Crises of the 21st Century. Karen Dynan 
• HKS DEV 356: Economic Policy in Africa: Challenges and Opportunities. Celestin Monga 

Political Economy Faculty

Alisha c. holland.

Danielle Allen

Dustin Tingley

Elizabeth J. Perry

Feyaad Allie

Frances Hagopian

Mashail Malik

Matthew Blackwell

Melani Cammett

Michael J. Hiscox

Nara Dillon

Peter A. Hall

Pia Raffler

Stephen Chaudoin

Theda Skocpol

Torben Iversen

Penn State University Libraries

Pl sc 412: international political economy (world campus).

• Getting Started
• Exploring Topics
• Search Strategies Exercise
• Journal Articles
• Data Sources
• Specialized Sources

Term Paper Overview

• You will write a term paper on a relevant topic of interest to you.  The basic idea is for you to apply a theory or small set of theories to an issue in international political economy to drive predictions regarding the likely course of events over the next 5-10 or 10- 20 years. You will work on the paper in stages and be graded on your work over the course of the semester.  After submitting a rough draft, you will review another student’s paper and get peer feedback on your draft.

Term Paper Stages

1.  Research Paper Topic : You will write a short paragraph outlining the general topic of your research paper. General topics include, but are not limited to, trade relations, hegemony, the exchange rate, development and globalization. You will then describe the specific subtopic you are interested in. If, for example, your general topic is globalization, some subtopics might be sweatshops or the effect of globalization on the environment.

2.  Research Question: You will write one short paragraph that first presents your initial research question. Make sure that your research question asks what factors, variables, or conditions affect some aspect of your subtopic and focuses on cause-and-effect relationships.

• You should avoid descriptive and prescriptive questions.  The former leads to research papers that simply describe a process or an event, while the latter results in research papers that tell us what we can or should do to change, fix, or prevent some undesirable situation.
• For example, if your subtopic is the effect of globalization on the environment under the general topic of the globalization, an appropriate research question might be “under what conditions will countries cooperate to reduce pollution?” Inappropriate research questions might be “which states are the biggest polluters?” and “what should be done to reduce pollution?”

3.  Bibliography: You will submit a preliminary bibliography that should consist primarily of scholarly works associated with your research topic, such as books, journal articles, and other published studies that have been subjected to peer review. University presses, as well as many other reputable publishers, produce peer-reviewed books.

• American Political Science Review
• American Journal of Political Science
• International Organization
• International Studies Quarterly
• World Politics International
• Journal of Political Economy
• Your bibliography must follow the guidelines found in the American Political Science Association’s Style Manual for Political Science.  (See the Citations page of this guide for link.)

4.  Theory Overview : The reading you do will allow you to become acquainted with different theories (or "models" as they are often called) about the phenomenon that you’re interested in. Review the most prominent or compelling theories. If there are competing theories, highlight their distinguishing factors.

5.  Thesis Statement : You will write one or two sentences that represent your thesis statement. This thesis statement should be a concise summary of your research paper’s argument or analysis. In other words, the thesis statement summarizes your findings, your predictions and your argument. It is “the punch line” of your paper and what follows fills out and supports this statement.

6.  Detailed Outline : You will provide a detailed outline of the various sections of your research paper. These sections may include, but are not limited to, the introduction (including your thesis statement), theory review, analysis, and conclusions.

7.  Rough Draft : You will submit a rough draft of your research paper for peer review. This draft does not have to be perfect. It simply represents your first attempt to put your thoughts in final form. However, the more work you put into this rough draft, the more likely it is that you will receive useful feedback from the peer review. You will get full credit for submitting the draft. (I will not be grading content at this point.) If you do not submit the rough draft you WILL NOT get any credit for completing a peer review.

8.  Peer Review:   You will provide constructive feedback on one classmate’s rough draft.  Using track changes and the insertion of comments, offer as much constructive criticism on your classmate’s paper as possible.  Constructive criticism is criticism that is intended to improve the paper and often identifies solutions to problems in a positive and productive way.  You might want to think about this peer review as a valuable opportunity to improve your own writing; as you edit and comment upon your classmate's work, you might discover things that you should or should not do in future essays and research papers. You will not get credit for this portion if you do not submit a rough draft yourself.

9.  Final Paper: Your final paper must be between 6-8 pages in length, double-spaced with 12-point Times New Roman font and 1-inch margins. Your paper must also include proper parenthetical citations and bibliography, following the guidelines found in the American Political Science Association’s Style Manual for Political Science.  (See the Citations page of this guide for link.)   Please upload your paper in Word (or Pages), not pdf.

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• Last Updated: Sep 6, 2024 8:58 AM
• URL: https://guides.libraries.psu.edu/WorldCampus/PLSC412

Numbers, Facts and Trends Shaping Your World

Read our research on:

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Regions & Countries

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International Issues

Brazilians mostly optimistic about country’s global standing ahead of g20 summit.

Brazilians increasingly say their country is or will become a top world power, and trust in their government has roughly doubled since 2017.

7 facts about Germany’s AfD party

Alternative for Germany (AfD) is the first far-right political party to win a state election in Germany since World War II.

Many Israelis say social media content about the Israel-Hamas war should be censored

Most Israeli adults do not post or share about political and social issues online – including the war between Israel and Hamas.

How Mexicans and Americans view each other and their governments’ handling of the border

Mexicans hold generally positive views of the United States, while Americans hold generally negative views of Mexico – a reversal from 2017.

Views on America’s global role diverge widely by age and party

A third of adults under age 35 say it is extremely or very important that the U.S. play an active role in world affairs.

Majority of Americans take a dim view of increased trade with other countries

A 59% majority of Americans say the U.S. has lost more than it has gained when it comes to increased trade with other countries.

War in Ukraine: Wide Partisan Differences on U.S. Responsibility and Support

While 63% of Democrats say the U.S. is responsible for helping Ukraine defend against Russia, 62% of Republicans say it is not.

U.S. adults under 30 have different foreign policy priorities than older adults

Americans’ views differ by age on whether measures like addressing climate change and preventing terrorist attacks should be top foreign policy priorities.

Many adults in East and Southeast Asia support free speech, are open to societal change

In East and Southeast Asia, half or more of adults say that people who disagree with their government’s actions should be able to publicly criticize the government.

Most People in 35 Countries Say China Has a Large Impact on Their National Economy

Large majorities in nearly all 35 nations surveyed say China has a great deal or a fair amount of influence on their country’s economic conditions.

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