Abstract
This chapter posits that critical engagement with institutional political economy and developmental state scholarship offers new theoretical insights at a time when both development regimes and foreign policy paradigms are in flux. It provides a broad conceptual framework which links national development and foreign policy regimes through institutional complementarities among economic governance, state-business relations, and financial statecraft. It proposes that if the domestic development regime does not chime with the foreign policy orientation of a country, and it is less likely that foreign policy will feed into a nation’s long-term development performance—and vice versa.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Paul Krugman, “Is This the End of Peace Through Trade?” The New York Times, 13 December 2022.
- 2.
For more on the intense competition to control the global micro-chip market, see Miller, Chip War.
- 3.
Cheng Ting-Fang and Lauly Li, “The Resilience Myth: Fatal Flaws in the Push to Secure Chip Supply Chains,” Financial Times, 4 August 2022.
- 4.
The ongoing retreat of the American-led liberal international order and the move toward multipolarity constitutes the new “big debate” in global politics. On the multiple crises of the liberal international order, see Lake, Martin, and Risse, “Challenges to the Liberal Order”; Acharya, The End of American World Order; Flockhart, “The Coming Multi-Order World”; Öniş and Kutlay, “The New Age of Hybridity and Clash of Norms.” For a review essay, see Layne, “The Waning of U. S. Hegemony—Myth or Reality?” For a counter argument claiming that “the world is neither bipolar nor multipolar, and it is not about to become either”, see Brooks and Wohlforth, “The Myth of Multipolarity: American Power’s Staying Power.”
- 5.
For an assessment, see Posen, “Emerging Multipolarity.”
- 6.
Jamil Anderlini and Clea Caulcutt, “Europe Must Resist Pressure to Become ‘America’s Followers,’ Says Macron,” Politico, 9 April 2023. For more on Emmanuel Macron’s ideas on “strategic autonomy” for Europe and how it is received by other Western policymakers with suspicion, see Leila Abboud and Ben Hall, “Macron at Odds with the World,” Financial Times, 15/16 April 2023.
- 7.
Data cover state acts since November 2008.
- 8.
World Bank database, available at https://data.worldbank.org/indicator/NE.TRD.GNFS.ZS.
- 9.
IMF, World Economic Outlook: A Rocky Recovery (Washington, DC: International Monetary Fund, Publication Services, 2023), p. 92; see also data file for Chapter 4.
- 10.
Babic, “State Capital in a Geoeconomic World,” 201.
- 11.
Helleiner, “The Return of National Self-Sufficiency?” On the intellectual roots of economic nationalism in the global political economy, see Helleiner, The Neomercantilists.
- 12.
The United States has been the by far largest provider of military support to Ukraine, with $32.5 billion between February 2022 and March 2023. This is followed by the UK with £2.3 billion as of March 2023. For details and information on the military assistance of other NATO and non-NATO countries to Ukraine, see Mills, “Military Assistance to Ukraine since the Russian Invasion.”
- 13.
Amable, “Institutional Complementarities in the Dynamic Comparative Analysis of Capitalism.” Emphasis in the original. We should note, however, that this book does not intend to apply the institutional complementarities approach highlighted by the varieties of capitalism literature. We refer to the idea of “institutional complementarities” only to demonstrate the relevance and importance of different institutional pillars complementing one another (or the lack thereof) in building a development-oriented foreign policy.
- 14.
Amable, 82.
- 15.
Mastanduno, “Economic Statecraft,” 204. For a classic work on economic statecraft, see Baldwin, Economic Statecraft.
- 16.
Mastanduno, “Economic Statecraft,” 219–20.
- 17.
For a recent review, see Drezner, “How Not to Sanction.” Miroslav Nincic, examining the cases of North Korea, Iran, and Libya, has suggested that “positive inducements” should also be considered more seriously, as “negative pressures” remain mostly ineffective. See Nincic, “Getting What You Want.” For a comprehensive overview on the emergence of sanctions in international politics, see Mulder, The Economic Weapon.
- 18.
Hiscox, “The Domestic Sources of Foreign Economic Policies,” 78.
- 19.
For a rich collection of essays covering conceptual discussions and case-studies of different countries in terms of economic diplomacy, see Bayne and Woolcock, The New Economic Diplomacy.
- 20.
Crescenzi, “Economic Exit, Interdependence, and Conflict”; Hegre, Oneal, and Russett, “Trade Does Promote Peace”; Kim and Rousseau, “The Classical Liberals Were Half Right (or Half Wrong)”; Maoz, “The Effects of Strategic and Economic Interdependence on International Conflict Across Levels of Analysis.”
- 21.
Waltz, “The Myth of National Interdependence,” 205.
- 22.
Gilpin, The Political Economy of International Relations; Hirschman, National Power and the Structure of Foreign Trade; Barbieri and Schneider, “Globalization and Peace.”
- 23.
Oneal and Russett, Triangulating Peace; Polachek, “Conflict and Trade”; Pollins, “Does Trade Still Follow the Flag?”
- 24.
Oneal and Russett, “The Kantian Peace”; Oneal and Russett, Triangulating Peace.
- 25.
Rosecrance, Rise of the Trading State, 13–25.
- 26.
Ho, Rethinking Trade and Commercial Policy Theories. Ho, in this book, offers a critical analysis of mainstream trade and development approaches.
- 27.
Johnson, MITI and the Japanese Miracle; Amsden, Asia’s Next Giant; Öniş, “The Logic of the Developmental State.”
- 28.
For more on the return of industrial policy, see Chang and Andreoni, “Industrial Policy in the 21st Century.” For an overview of the similarities and differences between the “old” and “new” industrial policy, see Naudé, “Industrial Policy.”
- 29.
Chatterjee, “New Developmentalism and Its Discontents.” See also Khan and Christiansen, Towards New Developmentalism.
- 30.
For more on new state capitalism, see Alami and Dixon, “State Capitalism(s) Redux?”
- 31.
Landsberg and Georghiou, “The Foreign Policy and Diplomatic Attributes of a Developmental State,” 480.
- 32.
Crescenzi, “Economic Exit, Interdependence, and Conflict,” 811.
- 33.
Crescenzi, 812.
- 34.
Evans, Embedded Autonomy; Öniş, “The Logic of the Developmental State”; Wade, “The Developmental State”; Weiss, The Myth of the Powerless State.
- 35.
Baru, “Geo-Economics and Strategy.”
- 36.
Chang, “Breaking the Mould”; Öniş, “The Logic of the Developmental State”; Wade, “The Developmental State”; Weiss, The Myth of the Powerless State.
- 37.
Landsberg and Georghiou, “The Foreign Policy and Diplomatic Attributes of a Developmental State,” 481.
- 38.
Landsberg and Georghiou, 488.
- 39.
Evans, Embedded Autonomy.
- 40.
Landsberg and Georghiou, “The Foreign Policy and Diplomatic Attributes of a Developmental State,” 482.
- 41.
Mansfield and Pollins, “The Study of Interdependence and Conflict”; Milner, “The Political Economy of International Trade.”
- 42.
Evans, Embedded Autonomy.
- 43.
Weiss, The Myth of the Powerless State, 38.
- 44.
Weiss, 38.
- 45.
On the key role of the state in disciplining business actors in Asian developmental states, with reference to the case of South Korea, see Amsden, Asia’s Next Giant.
- 46.
Babic, “State Capital in a Geoeconomic World.” Babic has provided a comprehensive analysis of the geoeconomic drivers of state capital and its political reverberations in the global political economy. See also Babic, The Rise of State Capital.
- 47.
Armijo and Katada, “Theorizing the Financial Statecraft of Emerging Powers.”
- 48.
Drezner, “Sanctions Sometimes Smart.”
- 49.
Valentina Pop, Sam Fleming, and James Politi, “Weaponisation of Finance: How the West Unleashed ‘Shock and Awe’ on Russia,” Financial Times, 6 April 2022.
- 50.
For more on the privileged position of the US dollar as a de facto world currency, see Eichengreen, Exorbitant Privilege.
- 51.
Drezner, “How Not to Sanction,” 1540.
- 52.
Armijo and Katada, “Theorizing the Financial Statecraft of Emerging Powers,” 47.
- 53.
Dent, “Transnational Capital, the State and Foreign Economic Policy,” 264, 261.
- 54.
Adam Tooze, “Washington Isn’t Listening to Business on China Any More,” Financial Times, 6–7 May 2023.
- 55.
For a comprehensive assessment and a set of recommendations in this direction, see Rodrik and Walt, “How to Construct a New Global Order.”
References
Acharya, Amitav. The End of American World Order. London: Polity, 2018.
Alami, Ilias, and Adam D. Dixon. “State Capitalism(s) Redux? Theories, Tensions, Controversies.” Competition & Change 24, no. 1 (2020): 70–94. https://doi.org/10.1177/1024529419881949
Amable, Bruno. “Institutional Complementarities in the Dynamic Comparative Analysis of Capitalism.” Journal of Institutional Economics 12, no. 1 (2016): 79–103. https://doi.org/10.1017/S1744137415000211.
Amsden, Alice H. Asia’s Next Giant: South Korea and Late Industrialization. Oxford: Oxford University Press, 1989.
Armijo, Leslie Elliott, and Saori N. Katada. “Theorizing the Financial Statecraft of Emerging Powers.” New Political Economy 20, no. 1 (2015): 42–62. https://doi.org/10.1080/13563467.2013.866082
Babic, Milan. “State Capital in a Geoeconomic World: Map** State-Led Foreign Investment in the Global Political Economy.” Review of International Political Economy 30, no. 1 (2023): 201–28. https://doi.org/10.1080/09692290.2021.1993301
———. The Rise of State Capital: Transforming Markets and International Politics. London: Agenda Publishing, 2023.
Baldwin, David A. Economic Statecraft. Princeton, NJ: Princeton University Press, 1985.
Barbieri, Katherine, and Gerald Schneider. “Globalization and Peace: Assessing New Directions in the Study of Trade and Conflict.” Journal of Peace Research 36, no. 4 (1999): 387–404.
Baru, Sanjaya. “Geo-Economics and Strategy.” Survival 54, no. 3 (2012): 47–58. https://doi.org/10.1080/00396338.2012.690978.
Bayne, Nicholas, and Stephen Woolcock, eds. The New Economic Diplomacy: Decision-Making and Negotiation in International Economic Relations. London: Routledge, 2018.
Brooks, Stephen G., and William C. Wohlforth. “The Myth of Multipolarity: American Power’s Staying Power.” Foreign Affairs 102, no. 3 (2023): 76–91.
Chang, Ha-Joon. “Breaking the Mould: An Institutionalist Political Economy Alternative to the Neo‐liberal Theory of the Market and the State.” Cambridge Journal of Economics 26, no. 5 (2002): 539–59.
Chang, Ha-Joon., and Antonio Andreoni. “Industrial Policy in the 21st Century.” Development and Change 51, no. 2 (2020): 324–51. https://doi.org/10.1111/dech.12570.
Chatterjee, Elizabeth. “New Developmentalism and Its Discontents: State Activism in Modi’s Gujarat and India.” Development and Change 53, no. 1 (2022): 58–83. https://doi.org/10.1111/dech.12579.
Crescenzi, Mark J. C. “Economic Exit, Interdependence, and Conflict.” The Journal of Politics 65, no. 3 (2003): 809–32.https://doi.org/10.1111/1468-2508.00213
Dent, Christopher. “Transnational Capital, the State and Foreign Economic Policy: Singapore, South Korea and Taiwan.” Review of International Political Economy 10, no. 2 (2003): 246–77. https://doi.org/10.1080/0969229032000063225
Drezner, Daniel W. “How Not to Sanction.” International Affairs 98, no. 5 (2022): 1533–52. https://doi.org/10.1093/ia/iiac065
———. “Sanctions Sometimes Smart: Targeted Sanctions in Theory and Practice.” International Studies Review 13, no. 1 (2011): 96–108.
Eichengreen, Barry. Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System. Reprint. Oxford; New York: Oxford University Press, 2012.
Evans, Peter. Embedded Autonomy. Princeton, NJ: Princeton University Press, 1995.
Flockhart, Trine. “The Coming Multi-Order World.” Contemporary Security Policy 37, no. 1 (2016): 3–30. https://doi.org/10.1080/13523260.2016.1150053
Gilpin, Robert. The Political Economy of International Relations. Princeton: Princeton University Press, 1987.
Hegre, Håvard., John R. Oneal, and Bruce Russett. “Trade Does Promote Peace: New Simultaneous Estimates of the Reciprocal Effects of Trade and Conflict.” Journal of Peace Research 47, no. 6 (2010): 763–74.
Helleiner, Eric. The Neomercantilists: A Global Intellectual History. Ithaca, NY: Cornell University Press, 2021.
———. “The Return of National Self-Sufficiency? Excavating Autarkic Thought in a De-Globalizing Era.” International Studies Review 23, no. 3 (2021): 933–57. https://doi.org/10.1093/isr/viaa092
Hirschman, Albert O. National Power and the Structure of Foreign Trade. Berkeley: University of California Press, 1945.
Hiscox, Michael J. “The Domestic Sources of Foreign Economic Policies.” In Global Political Economy, edited by John Ravenhill. Oxford: Oxford University Press, 2020.
Ho, Peter Sai-wing. Rethinking Trade and Commercial Policy Theories: Development Perspectives. Northampton: Edward Elgar, 2010.
Johnson, Chalmers. MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925–1975, 1st ed. Palo Alto: Stanford University Press, 1982.
Khan, Shahrukh Rafi, and Jens Christiansen, eds. Towards New Developmentalism: Market as Means Rather Than Master. London: Routledge, 2010.
Kim, Hyung Min, and David L. Rousseau. “The Classical Liberals Were Half Right (or Half Wrong): New Tests of the ‘Liberal Peace’, 1960–88.” Journal of Peace Research 42, no. 5 (2005): 523–43. https://doi.org/10.1177/0022343305056225
Lake, David A., Lisa L. Martin, and Thomas Risse. “Challenges to the Liberal Order: Reflections on International Organization.” International Organization 75, no. 2 (2021): 225–57. https://doi.org/10.1017/S0020818320000636.
Landsberg, Chris, and Costa Georghiou. “The Foreign Policy and Diplomatic Attributes of a Developmental State: South Africa as Case Study.” South African Journal of International Affairs 22, no. 4 (2015): 479–95. https://doi.org/10.1080/10220461.2015.1124805
Layne, Christopher. “The Waning of U. S. Hegemony—Myth or Reality? A Review Essay.” International Security 34, no. 1 (2009): 147–72.
Mansfield, Edward D., and Brian M. Pollins. “The Study of Interdependence and Conflict: Recent Advances, Open Questions, and Directions for Future Research.” The Journal of Conflict Resolution 45, no. 6 (2001): 834–59.
Maoz, Zeev. “The Effects of Strategic and Economic Interdependence on International Conflict Across Levels of Analysis.” American Journal of Political Science 53, no. 1 (2009): 223–40. https://doi.org/10.1111/j.1540-5907.2008.00367.x.
Mastanduno, Michael. “Economic Statecraft.” In Foreign Policy: Theories, Actors, Cases, ed. Steve Smith, Amelia Hadfield, and Tim Dunne, 222–241. Oxford: Oxford University Press, 2012.
Miller, Chris. Chip War: The Fight for the World’s Most Critical Technology. New York: Scribner, 2022.
Mills, Claire. “Military Assistance to Ukraine since the Russian Invasion.” House of Commons Library Research Briefing (number 9477) (2023). https://commonslibrary.parliament.uk/research-briefings/cbp-9477/
Milner, Helen V. “The Political Economy of International Trade.” Annual Review of Political Science 2, no. 1 (1999): 91–114. https://doi.org/10.1146/annurev.polisci.2.1.91.
Mulder, Nicholas. The Economic Weapon: The Rise of Sanctions as a Tool of Modern War. New Haven; London: Yale University Press, 2022.
Naudé, Wim. “Industrial Policy: Old and New Issues.” WIDER Working Paper Series, WIDER Working Paper Series, 2010. https://ideas.repec.org//p/unu/wpaper/wp-2010-106.html
Nincic, Miroslav. “Getting What You Want: Positive Inducements in International Relations.” International Security 35, no. 1 (2010): 138–83.
Oneal, John R., and Bruce Russett. “The Kantian Peace: The Pacific Benefits of Democracy, Interdependence, and International Organizations, 1885–1992.” World Politics 52, no. 1 (1999): 1–37.
Oneal, John R., and Bruce Russett. Triangulating Peace: Democracy, Interdependence, and International Organizations. New York: W. W. Norton & Company, 2001.
Öniş, Ziya. “The Logic of the Developmental State.” Comparative Politics 24, no. 1 (1991): 109–26.
Öniş, Ziya, and Mustafa Kutlay. “The New Age of Hybridity and Clash of Norms: China, BRICS, and Challenges of Global Governance in a Postliberal International Order.” Alternatives 45, no. 3 (2020): 123–42. https://doi.org/10.1177/0304375420921086
Polachek, Solomon William. “Conflict and Trade.” Journal of Conflict Resolution 24, no. 1 (1980): 55–78. https://doi.org/10.1177/002200278002400103
Pollins, Brian M. “Does Trade Still Follow the Flag?” The American Political Science Review 83, no. 2 (1989): 465–80. https://doi.org/10.2307/1962400.
Posen, Barry R. “Emerging Multipolarity: Why Should We Care?” Current History 108, no. 721 (2009): 347–52.
Rodrik, Dani, and Stephen Walt. “How to Construct a New Global Order.” HKS Working Paper No. RWP21–013, 2021.https://www.hks.harvard.edu/publications/how-construct-new-global-order
Rosecrance, Richard. The Rise of the Trading State: Commerce and Conquest in the Modern World. New York: Basic Books, 1986.
Wade, Robert H. “The Developmental State: Dead or Alive?” Development and Change 49, no. 2 (2018): 518–46. https://doi.org/10.1111/dech.12381
Waltz, Kenneth N. “The Myth of National Interdependence.” In The International Cooperation, ed. Charles P. Kindleberger, 205-223. Cambridge: MIT Press, 1970.
Weiss, Linda. The Myth of the Powerless State: Governing the Economy in a Global Era. Ithaca, New York: Cornell University Press, 1998.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2023 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this chapter
Cite this chapter
Kutlay, M., Karaoğuz, H.E. (2023). The Development–Foreign Policy Nexus: A Regime Coherence Framework. In: Development and Foreign Policy in Turkey. International Political Economy Series. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-12116-6_2
Download citation
DOI: https://doi.org/10.1007/978-3-031-12116-6_2
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-031-12115-9
Online ISBN: 978-3-031-12116-6
eBook Packages: Political Science and International StudiesPolitical Science and International Studies (R0)