New International Political Economy

New International Political Economy

International Political Economy (IPE) can be defined as a Neo-Marxist theory that focuses on the phenomenon of international inequalities and analyzes the universal effects of neo-colonialism. IPE is a combination of international relations and political economy [1], concentrating primarily on examining the relationship between political forces and economic interactions.

"Political economy is a social science that analyzes political and economic processes, their interrelations, and their influence. Political economy recognizes the importance of norms, values, and policies in shaping the behavior of individuals, groups, and social institutions" - Albertson College of Idaho

"International relations is a branch of political science concerned with relations between nations and primarily with foreign policies" - Merriam-Webster''

  • There has not yet been established a universally concise definition of the term “international political economy." Some define it as an interdisciplinary field that expands the established theories of Political Science and Economics, while others view it as a new discipline with theoretical constructs of its own. Others define it simply as a field of study. The academic boundaries of IPE are flexible.[1]"IPE has been characterized by multiple intellectual traditions, reflecting the hybrid nature of the field itself."[2]. This page accounts only for the sociological perspective of IPE.



As an analytical and theoretical perspective in the sociology field, IPE emerged in the 1960s, after Latin American Economists conducted a study on the long term impacts of imperialism on a country.[3] The findings of the study called for a new understandings of how thing work on a global level and how they might be studied. [4] IPE has been significantly shaped by the critical paradigm, which focuses on identifying and focusing on patterns of inequality, and asserts that forms of social inequality are historically created and therefore can be changed. The Pioneer scholars concerned with IPE declared that earlier studies of international relations had placed unwarranted emphasis on law and politics. IPE scholars, as well as Marxists, dismissed the singular state as a unit of analysis, and emphasized one international system.International Political Economy IPE proposed a marriage between international economics and political analysis through sociological and historical lenses. By the 1960s, the shift in balance of economic power among nations was a phenomenon unaccounted for. The rapid recovery of the European and Japanese economies after World War II called for a method of analysis. By the 1970s, IPE became more popular to account for such phenomena as neo-colonialism and the Bretton Woods system[2].[5]

Intellectual Influences

The sociological concepts of IPE come from Karl Marx's theories of class inequality, and consequent Marxist theories of indirect control, the semi-colony, and [imperialism]. Latin American Economists' study of the Legacy of Imperialism and the subsequent Dependency Theory were also important contributors.[6]

Karl Marx

  • Theories of Class Inequality:

Marx asserted that there were two divisions of class in a capitalist society: the proletariat and the bourgeoisie. He explained that members of the bourgeoisie own the means of production, while the members of the proletariat division are owners of labor power. This allows the bourgeoisie to exploit the proletariats, and class inequality prevails. [7]


Marxists stressed the importance of indirect control in international relations. They asserted the economic relationships among countries existed, and often replaced direct military control. This Marxist view contrasts with the notion of imperialism as purely direct military control.

  • Definitions of the Semi-Colony

Marxist theory further expanded on the theories of imperialism by including a definition of the semi-colony as an independent country that relies and is often dominated by more powerful, developed countries. [8]

Latin American Economists

  • Legacy of Imperialism:

Latin American Economists provided a solid base for research on the legacy of imperialism, a study which greatly contributed to the foundation of IPE. Raul Prebisch, former Director of the United Nations Economic Commission for Latin America, developed the Dependency Theory after questions of the impact of imperialism on a country began to gain momentum. Dependency theory was created to explain the persistent poverty of poor countries, and how their situation was formed. Dependency Theory scholars maintain that resources are taken from poor 'periphery' countries, and are exploited by the richer, 'core' countries to sustain their economic growth. Dependency theory scholars explain that this economic activity is detrimental to the economy of the periphery countries. [9]

Updated Concepts

As a neo-Marxist theory, IPE takes the approach that Marx's theory is outdated and needs to be modified to account for modern phenomena. Immanuel Wallerstein, a renowned sociologist and IPE scholar, greatly contributed to the updated concepts of Marx's theory that resulted in New International Political Theory.

  • New World System/World systems theory: Immanuel Wallerstein is the pioneer of the world systems theory, which was created to understand the emergence of the third world and the relationships between rich and poor countries. The World systems theory is an application of Marx to international relations and the political economy. In Marx's time there were several European colonies, but currently every country in the world is integrated into one big system. The world systems theory focuses on international and exploitive relationships.

Wallerstein contributes to the Dependency theory by adding a new category of nations to the periphery and the core: the semi-periphery. Wallerstein asserts that there are three categories of nations: core (also known as metropolitan), periphery (also known as satellite), and semi-periphery. The core countries would be the upper class, who control the means of labor, the periphery countries would be the lower class who have to sell their labor, and the semi-periphery countries would act as the mediating middle class, countries who control and are controlled. Examples of current core, periphery, and semi-periphery countries would be The United States, Turkey, and Indonesia, respectively.

As a main proponent of the world systems theory, Wallerstein is largely responsible for the shaping of IPE under the critical paradigm, which asserts that forms of social inequality are socially constructed and therefore can be changed. Proponents of world systems theory regard it as a movement to induce global social change.

"The proponents of [world-system analysis] have been arguing that the social reality within which we live and which determines what our options are has not been the multiple national states of which we are citizens but something larger, which we call a world-system. We have been arguing that this system is a social creation, with a history, whose origins need to be explained, whose ongoing mechanisms need to be delineated, and whose inevitable terminal crisis needs to be discerned."

- Immanuel Wallerstein, World Systems Analysis: an Introduction [10]

  • Neo-colonialism: Another update to Marx's theory that contributes to IPE is the notion of neo-colonialism as indirect control through financial, political, and economic means. The term was introduced in the 1960s, but it had been articulated in Marxist circles since the 1920s. Gaining momentum in the 20th century, there has been an indirect, economic control of periphery countries by core countries through trade embargos, and other financial and economic arrangements. With these new and varied methods, direct military control is no longer necessary.

The military typically proceeds to create an economic disaster, often following the prescriptions of US advisers, and then decides to hand the problem over to civilians to administer. Overt military control is no longer necessary as new devices become available -- for example, controls exercised through the International Monetary Fund (which, like the World Bank, lends Third World nations funds largely provided by the industrial powers). In return for its loans, the IMF imposes "liberalization": an economy open to foreign penetration and control, sharp cutbacks in services to the general population, etc. These measures place power even more firmly in the hands of the wealthy classes and foreign investors ("stability") and reinforce the classic two-tiered societies of the Third World -- the super-rich (and a relatively well-off professional class that serves them) and an enormous mass of impoverished, suffering people. The indebtedness and economic chaos left by the military pretty much ensures that the IMF rules will be followed -- unless popular forces attempt to enter the political arena, in which case the military may have to reinstate "stability." - Noam Chomsky, What Uncle Sam Really Wants[11][3]

The effects of neo-colonialism can be seen all over the world, from Brazil to Ghana. These countries may claim formal independence, but many domestic policies are still determined by external forces.

Another factor in neo-colonialism that has been of interest to sociologists is the 'comprador bourgeoisie' (or lumpenbourgeoisie), the social class who is involved with the demise of their countries through compliance with foreign interests. Dr. Stephen Burman of the University of Sussex explains that "...there is an alliance of interests between the representatives of international capital and indigenous bourgeoisie which is overseeing economic development. This takes the form of a comprador relationship in which the local bourgeoisie is tied more to the interests of its core than to its own country." The comprador bourgeoisie are essentially upper-class citizens who act as agents to sell out their country to international interests in exchange for personal gain and wealth. This allows the process of neo-colonialism to run more smoothly, without direct military control.

Debates and Criticisms

  • Ignores cultural and internal class differences: IPE is often criticized for ignoring cultural differences, as well as internal class differences. Countries are grouped as 'core' and 'periphery,' but their cultures are ignored, and this makes the theory too simplistic as a holistic view. Critics also state that IPE fails to incorporate internal class difference into research, which detracts from its credibility.


  1. ^ Dayley, Robert, Professor, Alberston College of Idaho, Lecture Spring 2008
  2. ^ Benjamin Cohen, The Multiple Traditions of American Pie
  3. ^ Professor Robert Dickens, Class Lecture: Modern Sociological Theory, UNLV, Spring 2005
  5. ^ Cohen, Benjamin J., Bretton Woods System
  6. ^ Dickens, Robert, class lecture: Modern Sociological Theory, UNLV, Spring 2006
  7. ^ Stanford Encyclopedia of Philosophy: Karl Marx
  8. ^ Chilcote, Ronald, The Political Economy of Imperialism.
  9. ^ Ferraro, Vincente, Dependency Theory: An Introduction
  10. ^ Immanuel Wallerstein, World Systems Analysis: an Introduction
  11. ^ Noam Chomsky, What Uncle Sam Really Wants

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