A Pareto-optimal outcome is one that cannot be
improved on in the sense that there is no alternative that makes someone
better off without making someone else worse off.
Many political scientists would welcome the introduction
of the concept of ideology into economic theory but as yet it is rare to
see it used in either an explanatory or descriptive way. Agents are
typically characterized by preferences and by beliefs about the causal
structure of the environment (i.e., information) but not "belief systems"
that disguise and yet advance the interests of particular groups. In
addition, there seems to be no good a priori reason why the term
ideology should apply only to non-market configurations.
The exact difference between realism and neorealism is
unclear and bound to be controversial. On one interpretation,
neorealism is "merely" a more rigorous version of realism, one
grounded on microeconomic foundations. On another not entirely
different interpretation, neorealism provides a theoretically unified
systemic account of interstate politics. Some claim that neorealism
attempts to correct for realism's inability to deal with economic issues
( Hollis and
Smith 1990, 36-37
This last point concerning the goals of states requires
some comment. While much effort has been spent trying to justify the
content of utility functions on a priori grounds -- witness the debate
over absolute vs. relative gains -- there seems little to be gained and
much to lose by unduly restricting the range of state motives a priori.
Why not allow the goals of states to change depending on situational
properties? In neoclassical economic theory private agents pursue
absolute gains or market shares, cooperative or uncooperative strategies,
narrowly egoistic, predatory, or altruistic actions -- all depending on the
structure of the environment. Not only would this enhance flexibility of
analysis, it would also open the way toward incorporating institutions
into realist theory and facilitate a reconciliation with those whose work
has been relegated to "mitigation of anarchy" -- the work of those in
international law, morality, norms, learning, etc.
I stress that this is an approximation rather than an exact
relation. The gains from trade do not convert directly to the losses of
trade disruption because this simple equation ignores substitution
Let me try to clarify this point. It might appear that
bipolarity and multipolarity are relational concepts since they refer to
the way something (power) is distributed across countries. But notice
that power itself is a property attached to countries -- not to pairs or
larger sets. Attribute power is therefore different from network power,
where capabilities are expressed in terms of positions (and roles) in
exchange structures. I refer to bipolarity and multipolarity as
distributional parameters since they summarize how national attributes
are distributed, in much the same way that one could summarize the
height of individuals in a group.
Not everyone would agree with this assertion. In "Liberalism and International Relations Theory," ( 1992) Moravcsik
argues that liberalism is structural theory (at least partly), but it is the
pattern of preferences rather than the distribution of capabilities that
See Keohane "International Liberalism Reconsidered"
( 1990a) for one classification; also see Zacher and
International Theory: Common Threads, Divergent Strands" ( 1992) for
a comprehensive view of liberalism which distinguishes different
Technically speaking, this is a definition of the price, or
commodity terms of trade. Terms of trade may also be defined with
reference to quantities of goods exchanged (gross barter terms of trade)
and in terms of quantities of labor and capital contained in the goods
exchanged (factoral terms of trade) (see Barratt-Brown 1974, 231
In other words, it makes little sense to ask, in any
particular exchange, which party acquired more value. Terms of trade
theories logically imply a time dimension, i.e., they have to do with
changes in ratios of exchanges over time.
At least they were facts during a rather long historical
era. Beginning with the 1960s, a rising share of LDC production was
accounted for by manufactures. While a large proportion of LDC
manufactures was accounted for by a few countries (newly industrializing countries), there is some evidence that manufacturing
production is spreading to a sizable number of third-world countries (see Caporaso 1981
; Haggard 1990
The question arises as to whether these authors should
be classified as Marxian. None focuses exclusively or mainly on the
process of competitive capital accumulation or production and
distribution of the economic surplus. Much of Robert Cox's work
attempts to understand labor as an economic category and social
relation. All of these authors attempt to understand ideas, institutions,
politics, and economic process as a coherent ensemble, i.e., as
organically connected. While the lines of causality are not one-way, the
authors attach substantial weight to economic forces.
I recognize that certain global political economy
approaches are focused (some exclusively) on development issues.
Dependency theory and world systems theory come to mind. The
limitation applies in particular to neoclassical, liberal, and realist
approaches. Important exceptions within the realist tradition include Krasner ( 1985)
and Lake ( 1987)
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