International political economy

The primary impact of globalization is always on the economics and politics of any nation that calls itself a part of the 'global village.' As more and more countries participate in world economics, it has become evident that a new avenue of study and research has opened. In other words, international trade and the subsequent impact on world economics is something that needs to be studied. Moreover, the economic condition of a nation is closely related to the socio-political situation of a country and vice versa. Say, for instance, a state wishes to have healthy trade relations with the United States of America (USA). Still, its political condition is very volatile. Then chances are there that the USA will not wish to invest in that nation. This will impact the political and economic health and status of both countries. However, since the economy of the USA is healthy and thriving, the impact will be less. Thus, the international political economy is the study of the relationship between the two nations. It can be that both countries are economically prosperous or one state is weak and the other strong. Irrespective of the economic conditions of the participating nations, the political economy will impact the standard of living of both countries. 

Some of the essential features of the international political economy and its development that are also the topics for custom essay writing have been discussed below.

Early references to international political economy

Politics and economics are closely related to each other. The political condition of a nation will influence the economic state of the country. A politically stable country will have a stable economy. Similarly, a politically volatile country will not have a thriving economy. This was studied by the ancient politicians like Kautilya (who wrote the Arthashastra an ancient Indian text on statecraft) and Islamic social theorist Ibn Khaldun.

Similarly, it was also understood that international trade relations could also play crucial roles in the political and socio-economic conditions of countries. They realized that healthy trade and political ties between the two countries could have a lasting effect on the economic health of the nations. The government policies, taxation rules, and monetary policies of countries are also dependent on their diplomatic relations with other countries. In ancient times it was found that countries that had strong trade relations with neighboring states had thriving economies. The export and import of goods helped in the development of the economy of the participating nations. Economically prosperous countries also have a stable political condition as the governments could concentrate on the welfare of the nations. Governing bodies of thriving economies will not worry about improving the standard of living of the citizens. They could focus more on developing domestic trade and defend their borders in a better manner.

Politics and economics of international trade

International trade can be analyzed from political and economic perspectives. From a financial perspective, global trade means a smooth movement of goods and services across international borders. If you examine the European Union, then it becomes evident that after the creation of the Union, the economic condition of the participating European nation has become better. The introduction of the Euro as the official currency has made trade relations between the participating nineteen countries stronger. The European Union ensures that there is a more significant economic collaboration amongst the nations.

Similarly, international relations impact the political condition of the countries. If you consider the EU again as an example, it will become evident that the political terms of the states have become better after the formation of the Union. The setting up of the European Parliament and European Council ensures that the individual political conditions of the twenty-seven states are not affected. Nevertheless, it also provides that there is a more significant political collaboration between the countries. This has helped in breaking down political barriers, helps in promoting greater environmental awareness, and encourages scientific and technological advancements. Thus, healthy international trade relations can help to improve the political and economic conditions of the nations.

Trade embargos as a political and economic tool

One of the methods by which a country can interfere in the political condition of a nation is by imposing trade embargos. The financial status of a nation is highly dependent on the export and imports of the land. It is common knowledge that a country that has a higher rate of export compared to its imports is economically secure. However, if suddenly a trade embargo is imposed on the land, then its exports will reduce drastically. In other words, the state will not be able to export its products to the nation, which has imposed the embargo. Although this is primarily a political move, its impact is felt on the economies of both countries. This means the one on which the blockade has been imposed and the one inflicting the restriction. The most common prohibitions that are still existent in modern international politics are sanctions on the export and import of weapons. For instance, there are strict restrictions on the sale of weapons developed by economically stable nations to nations that have volatile political conditions. Thus, the internal political terms of countries will have an impact on international trade. Embargos are hence, tools in the hands of nations to change the political and economic framework of nations.

Hence, international trade relations between countries can impact both the political conditions and economic welfare of the nations. By extension, international trade relations can affect the lifestyle of the common man. Countries that play crucial roles in international trade relations have the power to impose embargoes that have a lasting economic impact. These countries have thriving economies and are politically stable. Thus, by studying the international trade relations of a nation, its political and economic condition can be easily understood. Similarly, the global political economy of the entire world will also have an impact on the economies of both developed and developing nations. Hence, it is a field of study that can open new avenues for students of economics and political science.