In the face of the Global Crises
For decades, the study of the international political economy has enabled us to better understand issues that had been haunting the international community such as the global security crisis and the global financial crisis. Now that it is facing such adversaries again, it makes us quite curious whether or not the measures that our predecessors did before to prevent such things again from happening are indeed effective. It is good to ask whether or not the study of the international political economy needs to be furnished more.
The global financial crisis that began in 2007 is a once-in-a-lifetime event with wideranging
consequences for government policymaking. The crisis has prompted much soulsearching
among economists and financial experts who failed to anticipate it, or whose warnings
were not taken seriously by regulators and investors. Scholars of international political economy
(IPE), however, are generally not in the business of predicting financial crises or recessions, and
... mortgage and the declining world stock prices led to the global financial crisis in July 2007. Investors had also over indulged themselves in ... . It is also suggestive that there should be a single international rating agency that will rate the assets worldwide. The IMF ... people could be forced to live in poverty. The developing economies will be experiencing slow growth rates due to the decline ...
so the field is unlikely to see the crisis as a manifestation of scholarly failure. Yet the crisis may
have an appreciable impact on the trajectory of IPE, just as the downfall of the Soviet Union
shaped subsequent scholarship on international relations and great-power conflict and prompted a
movement away from grand, and toward mid-range, theories.Financial regulation is certain to receive increased scrutiny; indeed, concepts such as capital adequacy and mark-to-market accounting—previously considered arcane—have already received substantial coverage in the press. Political scientists should have more to say about the political determinants and economic consequences of these regulations, especially as they relate to global financial stability. The financial crisis also highlights, and perhaps promotes, shifting patterns of global governance, including the greater inclusion of developing countries in international standard-setting bodies and the resulting difficulties in reaching meaningful agreements.
These shifts, coupled with the increasing financial clout, should trigger a reevaluation of the efficacy of transgovernmental networks, soft law, epistemic communities, and international cooperation more generally. And finally, the extraordinary prominence of a handful of large firms as instigators and victims of the financial crisis should prompt a closer look at the linkages between government policymakers and specific firms, especially those with the dubious honor of being “too big to fail.”