Constructivist Political Economy Rawi Abdelal,Mark Blyth,and Craig Parsons January 14,2005 13.330 words,including footnotes Chapter One:The Case for a Constructivist International Political Economy
Constructivist Political Economy Rawi Abdelal, Mark Blyth, and Craig Parsons January 14, 2005 13,330 words, including footnotes Chapter One: The Case for a Constructivist International Political Economy
Introduction:Constructivism-Where to Find it,and Where Not Social constructivism focuses on the social facts of the world.These social facts exist only because everyone agrees that they exist.Social facts are very real,and they are the product of intersubjectively (that is,collectively)held beliefs that cannot be reduced to a series or summation of subjective,individual beliefs.Social facts differ fundamentally from material facts,the reality that exists irrespective of collective beliefs about its existence,but they nonetheless have causal properties..As John Ruggie observes,"collectivities of individuals within states hold intersubjective understandings that affect their behavior,,”just as do“collectivities of states.” Although what we think of as"the world economy"is composed of both material and social facts,the field of international political economy (IPE)within political science has tended until recently to focus almost exclusively on the material facts of the economy.Materialist scholars have attempted to map individual,firm,and government preferences over outcomes onto these material facts,thereby privileging the rational, goal-oriented pursuit of policies as the central causal mechanism in accounts of economic policy making.In IPE,the combination of materialism and rationalism has become the dominant,even orthodox,view of the world economy. IPE has been remarkably impervious to inroads from sociological approaches to economic policy making.The intersubjective beliefs that give the world meaning are absent in almost all IPE scholarship.Indeed,IPE is increasingly the last bastion for the materialists and rationalists,who have had increasingly to share the intellectual terrain
Introduction: Constructivism – Where to Find it, and Where Not Social constructivism focuses on the social facts of the world. These social facts exist only because everyone agrees that they exist. Social facts are very real, and they are the product of intersubjectively (that is, collectively) held beliefs that cannot be reduced to a series or summation of subjective, individual beliefs. Social facts differ fundamentally from material facts, the reality that exists irrespective of collective beliefs about its existence, but they nonetheless have causal properties.. As John Ruggie observes, “collectivities of individuals within states hold intersubjective understandings that affect their behavior,” just as do “collectivities of states.” Although what we think of as “the world economy” is composed of both material and social facts, the field of international political economy (IPE) within political science has tended until recently to focus almost exclusively on the material facts of the economy. Materialist scholars have attempted to map individual, firm, and government preferences over outcomes onto these material facts, thereby privileging the rational, goal-oriented pursuit of policies as the central causal mechanism in accounts of economic policy making. In IPE, the combination of materialism and rationalism has become the dominant, even orthodox, view of the world economy. IPE has been remarkably impervious to inroads from sociological approaches to economic policy making. The intersubjective beliefs that give the world meaning are absent in almost all IPE scholarship. Indeed, IPE is increasingly the last bastion for the materialists and rationalists, who have had increasingly to share the intellectual terrain
with the constructivists on virtually all other topics.Constructivists have made contributions that are recognized as fundamentally important to economics and sociology, as well as to every other sub-field in political science.Similarly,economic sociology has produced a vibrant research program that has influenced policy and management scholarship as well.As Frank Dobbin observes, "Sociologists began to explain economic behavior in terms of the same four social mechanisms they had observed shaping all of social behavior.These mechanisms entered the common lexicon under the terms institution,network,power,and cognition. Sociology's core insight is that individuals behave according to scripts that are tied to social roles.Those scripts are called conventions at the collective level and cognitive schemas at the individual level." Similarly,cultural,ideational,and institutionalist theorists have made similar claims in comparative politics for years,without necessarily labeling their focus on intersubjectivity as constructivist.In the study of international relations however,the situation was somewhat different. In IR as a whole,constructivism emerged first in security studies,and with good reason.By the mid 1980s,Realism's jettisoning of any and all social elements from its theoretical core had the effect of making state behavior a reducta of system structure.As with any theory of the social world in which there is no social,anomalies soon began to emerge.For example,if the distribution of capabilities were the only determinant of
with the constructivists on virtually all other topics. Constructivists have made contributions that are recognized as fundamentally important to economics and sociology, as well as to every other sub-field in political science. Similarly, economic sociology has produced a vibrant research program that has influenced policy and management scholarship as well. As Frank Dobbin observes, “Sociologists began to explain economic behavior in terms of the same four social mechanisms they had observed shaping all of social behavior. These mechanisms entered the common lexicon under the terms institution, network, power, and cognition. Sociology’s core insight is that individuals behave according to scripts that are tied to social roles. Those scripts are called conventions at the collective level and cognitive schemas at the individual level.” Similarly, cultural, ideational, and institutionalist theorists have made similar claims in comparative politics for years, without necessarily labeling their focus on intersubjectivity as constructivist. In the study of international relations however, the situation was somewhat different. In IR as a whole, constructivism emerged first in security studies, and with good reason. By the mid 1980s, Realism’s jettisoning of any and all social elements from its theoretical core had the effect of making state behavior a reducta of system structure. As with any theory of the social world in which there is no social, anomalies soon began to emerge. For example, if the distribution of capabilities were the only determinant of
system stability,why did French nuclear weapons not upset the United States as much as Chinese ones? Theoretical concerns soon combined with the failure of such theories to adequately predict or explain major events of the latter part of the twentieth century. Thus,one could conclude,that it was hardly a surprise when more intersubjectivist theories came to prominence.Even within the materialist camp some realist scholars came to rely on beliefs and cognitive scripts to make sense of sovereignty,the fundamental institution of the state system itself.Still others sought to incorporate 'culture'into realism or sought to recover realism's subjectivist roots.Indeed,the last ten years or so has seen a transformation of international relations theory in political science. In 1994 an edited volume of leading scholars declared the "Neorealism and Neoliberalism"to be "The Debate."Yet within a few years some were asking "Is Anybody Still a Realist?"Meanwhile,its much lauded competitor,"neoliberal institutionalism"seemed to have all but disappeared from view -as if Scylla could not persist without her Charybdis. In a way one could write all this off as expected.If a theory purports to be a general theory of politics,and that theory cannot explain what are perhaps the two most important moments of the Twentieth century-namely,World War Two and the end of the Cold War-then the defense that "two data points do not disprove a theory"becomes rather feeble.As such,constructivism in IR is simply the inevitable paradigmatic successor to structural Realism
system stability, why did French nuclear weapons not upset the United States as much as Chinese ones? Theoretical concerns soon combined with the failure of such theories to adequately predict or explain major events of the latter part of the twentieth century. Thus, one could conclude, that it was hardly a surprise when more intersubjectivist theories came to prominence. Even within the materialist camp some realist scholars came to rely on beliefs and cognitive scripts to make sense of sovereignty, the fundamental institution of the state system itself. Still others sought to incorporate ‘culture’ into realism or sought to recover realism’s subjectivist roots. Indeed, the last ten years or so has seen a transformation of international relations theory in political science. In 1994 an edited volume of leading scholars declared the “Neorealism and Neoliberalism” to be “The Debate.” Yet within a few years some were asking “Is Anybody Still a Realist?” Meanwhile, its much lauded competitor, “neoliberal institutionalism” seemed to have all but disappeared from view – as if Scylla could not persist without her Charybdis. In a way one could write all this off as expected. If a theory purports to be a general theory of politics, and that theory cannot explain what are perhaps the two most important moments of the Twentieth century – namely, World War Two and the end of the Cold War – then the defense that “two data points do not disprove a theory” becomes rather feeble. As such, constructivism in IR is simply the inevitable paradigmatic successor to structural Realism
While such a reading has merits,we do not wish to accept it and leave it at that. For another facet of the intellectual developments of the last decade or so is also very revealing.As noted above,while constructivism swept through IR like wildfire,its impact on the field of international political economy has been marginal,at least until recently. Indeed,the collapse of structural and material explanations of international politics has had little effect on such explanations in the IPE literature.This,we suggest,is because in this literature,the economy is generally held to be rather different type of place from the polity. Unlike the polity,with its mess of identities,ideas,cultures and the like,in the economic world,while informational uncertainties abound,actors are seen to have a much more straightforward time of things.They are assumed to have 'interests'and rationally try and follow them,subject to the interests of others and the material environment in which they find themselves.Indeed,such agents'interests are usually derived from the structural position in which they find themselves (sheltered sector employee,export oriented capitalist,dependent state,service sector firm,etc.)and are 'actionable'to the extent allowed by the familiar laws of collective action,resource availability,and individual rationality.International security politics may be opaque and driven by identities,but IPE is supposed to be clear,driven by interests,and best understood rationally. The purpose of this volume is to challenge such a picture of the economic world and argue that political economy's"constructivist turn,"long overdue,is now arriving. Constructivist explanations of economic phenomena are becoming more commonplace in
While such a reading has merits, we do not wish to accept it and leave it at that. For another facet of the intellectual developments of the last decade or so is also very revealing. As noted above, while constructivism swept through IR like wildfire, its impact on the field of international political economy has been marginal, at least until recently. Indeed, the collapse of structural and material explanations of international politics has had little effect on such explanations in the IPE literature. This, we suggest, is because in this literature, the economy is generally held to be rather different type of place from the polity. Unlike the polity, with its mess of identities, ideas, cultures and the like, in the economic world, while informational uncertainties abound, actors are seen to have a much more straightforward time of things. They are assumed to have ‘interests’ and rationally try and follow them, subject to the interests of others and the material environment in which they find themselves. Indeed, such agents’ interests are usually derived from the structural position in which they find themselves (sheltered sector employee, export oriented capitalist, dependent state, service sector firm, etc.) and are ‘actionable’ to the extent allowed by the familiar laws of collective action, resource availability, and individual rationality. International security politics may be opaque and driven by identities, but IPE is supposed to be clear, driven by interests, and best understood rationally. The purpose of this volume is to challenge such a picture of the economic world and argue that political economy’s “constructivist turn,” long overdue, is now arriving. Constructivist explanations of economic phenomena are becoming more commonplace in
the literature with a variety of scholars'becoming less satisfied with the quasi- functionalist "just-so"stories offered by materialist-rationalist perspectives.For some, they simply do not explain enough.For others,they explain too much.Our purpose is to bring these individual contributions together in this volume,and in doing so,to make three claims.First,we aim to show how and why a constructivist international political economy often produces better explanations of political-economic outcomes than standard materialist-rationalist theories.Second,we intend to tease out the mechanisms through which the social construction of such outcomes occurs.Third,we and our collaborators will demonstrate such claims theoretically and empirically in the pieces that constitute this volume.Our goal is to make a statement for a constructivist political economy that researchers can actually use. As political scientists,we of course hope most to influence the research agenda of political science-in part by bringing the insights of other disciplines to the attention of others,and in part by demonstrating that the political science scholars who have employed the analytical frameworks of social constructivism have created a coherent set of arguments and an innovative collection of empirical methods for exploring the influence of ideas,norms,identities,and ideologies on the economic practices of governments,firms,and societies.In this way we hope that constructivist political economy within political science will cease exclusively to import ideas from sociology and economics;it is time for political scientists to begin to export their considerable insights to other disciplines as well. Constructivist scholars in political science have tended to be puzzle-driven.Many
the literature with a variety of scholars’ becoming less satisfied with the quasifunctionalist “just-so” stories offered by materialist-rationalist perspectives. For some, they simply do not explain enough. For others, they explain too much. Our purpose is to bring these individual contributions together in this volume, and in doing so, to make three claims. First, we aim to show how and why a constructivist international political economy often produces better explanations of political-economic outcomes than standard materialist-rationalist theories. Second, we intend to tease out the mechanisms through which the social construction of such outcomes occurs. Third, we and our collaborators will demonstrate such claims theoretically and empirically in the pieces that constitute this volume. Our goal is to make a statement for a constructivist political economy that researchers can actually use. As political scientists, we of course hope most to influence the research agenda of political science – in part by bringing the insights of other disciplines to the attention of others, and in part by demonstrating that the political science scholars who have employed the analytical frameworks of social constructivism have created a coherent set of arguments and an innovative collection of empirical methods for exploring the influence of ideas, norms, identities, and ideologies on the economic practices of governments, firms, and societies. In this way we hope that constructivist political economy within political science will cease exclusively to import ideas from sociology and economics; it is time for political scientists to begin to export their considerable insights to other disciplines as well. Constructivist scholars in political science have tended to be puzzle-driven. Many
of the most influential studies of the influence of social facts on politics began with a research question that simply could not be answered with the standard rationalist and materialist tools of the discipline.For example,a decade's worth of scholarship on important and theretofore unanswered questions in security studies culminated in a programmatic statement on the influence of norms and identities in world politics-the "culture of national security."One result of this volume was a definitive collection of important empirical questions whose answers were inescapably sociological.The skeptics could no longer quibble with each individual scholarly contribution.Another result was programmatic statement of the way forward theoretically (Jepperson, Katzenstein,and Wendt).We hope in this volume to lay the groundwork for a similar statement about the importance of constructivist insights into political economy.One political economy puzzle with a constructivist answer can perhaps be dismissed as exceptional.A dozen such puzzles,however,suggests that constructivism has,and will continue to be,systematically useful for understanding how the world economy and regional,national,and local economies work. Part One:Clearing the Ground for Constructivism in IPE The Real Economy and the Constructed IPE We are aware of the easy criticism that when it comes to the economy,the real- the material -has been misunderstood by us in our enthusiasm to understand the ideational-the social-origins of economic outcomes.As The Economist magazine once
of the most influential studies of the influence of social facts on politics began with a research question that simply could not be answered with the standard rationalist and materialist tools of the discipline. For example, a decade’s worth of scholarship on important and theretofore unanswered questions in security studies culminated in a programmatic statement on the influence of norms and identities in world politics – the “culture of national security.” One result of this volume was a definitive collection of important empirical questions whose answers were inescapably sociological. The skeptics could no longer quibble with each individual scholarly contribution. Another result was programmatic statement of the way forward theoretically (Jepperson, Katzenstein, and Wendt). We hope in this volume to lay the groundwork for a similar statement about the importance of constructivist insights into political economy. One political economy puzzle with a constructivist answer can perhaps be dismissed as exceptional. A dozen such puzzles, however, suggests that constructivism has, and will continue to be, systematically useful for understanding how the world economy and regional, national, and local economies work. Part One: Clearing the Ground for Constructivism in IPE The Real Economy and the Constructed IPE We are aware of the easy criticism that when it comes to the economy, the real – the material – has been misunderstood by us in our enthusiasm to understand the ideational – the social – origins of economic outcomes. As The Economist magazine once
put it,the real economy is constituted by'things you can buy,sell,and drop on your foot' and such things are real objects with real effects.As such,the value added of insisting that such 'material objects'are constructed is limited at best.Indeed,the work of each of the scholars in this volume has been subject to such critique,but it is a critique we feel is misplaced at best.Instead,we argue that it is important to realize that much of the economy that is regarded as 'material'and 'real'cannot in fact be bought,sold,or dropped on one's foot.Take,for example,the actual content of a country's gross domestic product(GDP)-what it makes,the competitiveness of its products on world markets,the real and financial interdependences among economies,its factor endowments,its specific assets.Are these indefatigably real objects?We would in fact,contest that they are,and they are.While we do not deny that there is much that the material facts of the world economy can tell us about how governments and societies are constrained and enabled, which countries grow more and less quickly,and which policies achieve their intended outcome and which do not,we actively resist such a reductionism for several reasons. First of all,looking at this broadly,even the putatively material facts of the world economy include an inescapably ideational element,all the way down through such'hard facts'as GDP.Although there is a sense in which GDP is fundamentally material in that one produces wheat and weapons or one does not,how societies account for national product and national income is a construction.The usefulness of the construction helps to explain its widespread use among societies,but it is clear that choices have been made about what to count (e.g.,goods and services with market values,rather than the"gray," informal economy or activities within households),what not to count (e.g.,environmental
put it, the real economy is constituted by ‘things you can buy, sell, and drop on your foot’ and such things are real objects with real effects. As such, the value added of insisting that such ‘material objects’ are constructed is limited at best. Indeed, the work of each of the scholars in this volume has been subject to such critique, but it is a critique we feel is misplaced at best. Instead, we argue that it is important to realize that much of the economy that is regarded as ‘material’ and ‘real’ cannot in fact be bought, sold, or dropped on one’s foot. Take, for example, the actual content of a country’s gross domestic product (GDP) – what it makes, the competitiveness of its products on world markets, the real and financial interdependences among economies, its factor endowments, its specific assets. Are these indefatigably real objects? We would in fact, contest that they are, and they are. While we do not deny that there is much that the material facts of the world economy can tell us about how governments and societies are constrained and enabled, which countries grow more and less quickly, and which policies achieve their intended outcome and which do not, we actively resist such a reductionism for several reasons. First of all, looking at this broadly, even the putatively material facts of the world economy include an inescapably ideational element, all the way down through such ‘hard facts’ as GDP. Although there is a sense in which GDP is fundamentally material in that one produces wheat and weapons or one does not, how societies account for national product and national income is a construction. The usefulness of the construction helps to explain its widespread use among societies, but it is clear that choices have been made about what to count (e.g., goods and services with market values, rather than the “gray,” informal economy or activities within households), what not to count (e.g., environmental
degradation and ecological sustainability),and how to count it (e.g.,with surveys and various methods of estimating changes in economic activity).National income accounting is a social construction that the entire world now takes for granted,and governments alter their economic policies on the basis of a few basis points of change of GDP from one quarter to the next. Second,despite materialist theorists'prognostications,many of the material processes of the world do not seem to result in unambiguous outcomes.Causes and effects often seem to be opaque and linked non-linearly.Take financial globalization as an example.Regardless of the particular nuances,the materialist theories of the 1990s were clear.Big spending welfare states would be punished with capital flight in a taxation and wage race to the bottom.Either such states would converge on the Anglo-American equilibrium of labor market flexibility,low taxes,and low welfare transfers,or they would be seriously hurt. Unfortunately,while the theory was determinate,the facts were not.What we saw instead was that those states slated most likely to falter were in fact among the most productive.In short,there were and are multiple stable equilibria under conditions of financial globalization.Materialist theories of such processes,by ignoring how agents interpret the environment around them and then take actions,make erroneous predictions. How globalization impacts a state depends upon how it is seen by agents within that state. Thus,while the British seek to 'embrace'globalization as an opportunity,the French resist 'Mondialisation'as an alien import.Material facts,it seems,can be very under- determining indeed
degradation and ecological sustainability), and how to count it (e.g., with surveys and various methods of estimating changes in economic activity). National income accounting is a social construction that the entire world now takes for granted, and governments alter their economic policies on the basis of a few basis points of change of GDP from one quarter to the next. Second, despite materialist theorists’ prognostications, many of the material processes of the world do not seem to result in unambiguous outcomes. Causes and effects often seem to be opaque and linked non-linearly. Take financial globalization as an example. Regardless of the particular nuances, the materialist theories of the 1990s were clear. Big spending welfare states would be punished with capital flight in a taxation and wage race to the bottom. Either such states would converge on the Anglo-American equilibrium of labor market flexibility, low taxes, and low welfare transfers, or they would be seriously hurt. Unfortunately, while the theory was determinate, the facts were not. What we saw instead was that those states slated most likely to falter were in fact among the most productive. In short, there were and are multiple stable equilibria under conditions of financial globalization. Materialist theories of such processes, by ignoring how agents interpret the environment around them and then take actions, make erroneous predictions. How globalization impacts a state depends upon how it is seen by agents within that state. Thus, while the British seek to ‘embrace’ globalization as an opportunity, the French resist ‘Mondialisation’ as an alien import. Material facts, it seems, can be very underdetermining indeed
Indeed,despite what orthodox theories maintain,the same is true at the micro level of individuals and their choices.When one thinks of a micro-level political economy one tends to think of similarly "hard"concepts such as interests (agents are assumed to have them,independent of other agents),played out against more macro level structures(debt levels,the distribution of wealth,the tax burden),and material processes (such as financial globalization),all of which are held to have determinate effects.Again, while we would agree that such factors do matter,they do not matter in the way one usually thinks. Materialist-rationalist models of political economy typically rely upon an explanatory structure where material factors are insufficient in and of themselves,to explain outcomes.By definition,they lack agency,and the way such factors are said to animate agents is either too simplistic,with automatic and unproblematic readings of structural variables'values leading to agents deciding upon unique behaviors in relation to those values.In some circumstances such an approach to explanation may seem fine, and indeed,most of the IPE literature takes such a view of its own project.When agents have clear interests (businesspeople and politicians want to make money and attain power),when those interests have an straightforward material basis (the agent is a businessman or politician),and crucially,when the world an agent operates in is unambiguous (certain actions probabilistically lead to profits or power,other to losses or defeat),such an approach may in fact tell us what we need to know.That"the dollar fell on news of a widening trade deficit"for example,or that "better than expected unemployment figures will lead to a tightening of interest rates"implies clear interests
Indeed, despite what orthodox theories maintain, the same is true at the micro level of individuals and their choices. When one thinks of a micro-level political economy one tends to think of similarly “hard” concepts such as interests (agents are assumed to have them, independent of other agents), played out against more macro level structures (debt levels, the distribution of wealth, the tax burden), and material processes (such as financial globalization), all of which are held to have determinate effects. Again, while we would agree that such factors do matter, they do not matter in the way one usually thinks. Materialist-rationalist models of political economy typically rely upon an explanatory structure where material factors are insufficient in and of themselves, to explain outcomes. By definition, they lack agency, and the way such factors are said to animate agents is either too simplistic, with automatic and unproblematic readings of structural variables’ values leading to agents deciding upon unique behaviors in relation to those values. In some circumstances such an approach to explanation may seem fine, and indeed, most of the IPE literature takes such a view of its own project. When agents have clear interests (businesspeople and politicians want to make money and attain power), when those interests have an straightforward material basis (the agent is a businessman or politician), and crucially, when the world an agent operates in is unambiguous (certain actions probabilistically lead to profits or power, other to losses or defeat), such an approach may in fact tell us what we need to know. That “the dollar fell on news of a widening trade deficit” for example, or that “better than expected unemployment figures will lead to a tightening of interest rates” implies clear interests