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Globalization Strategies and Power Essay

Satisfactory Essays

IPE Final Essay

1. It has been argued that globalization disposes states to converge on common economic policies and strategies. Using the literature covered in this course, critically evaluate the validity of the globalization-leads-to-convergence argument.

It is a long observed fact that wealth and power are moving from the North and the West to the East and the South. This trend and the power transfer from western developed states to eastern developing states have given some anxious observers the impression that the old liberal world order is falling for a new order. Developing states would promote an authoritarian capitalist alternative and developed states would still function under the old liberal order, thus states’ …show more content…

Will they solve adjustment problems by changing domestic structure or moving into the international system?

Ikenberry argues that there is an order of hierarchy in adjustment strategies, where Offensive International Adjustment comes in first and Domestic Defensive Adjustment comes in last. He suggests that state would be more inclined to international solutions rather than domestic solutions and this preference would result in a convergence of different states’ policies. Applying international adjustment solution, states develop agreements together or build an international regime with norms and regulations for reference to avoid future conflicts. Applying domestic adjustment solutions, states alter itself with a much larger governance cost or avoid changes and apply protectionism. Such policies would largely hamper this state’s competitiveness and reduce its gain in this globalized world.

Trade and investments between states are active opponents of world trading system and many states seek to sign Bilateral Investment Treaties (BIT) to achieve bigger profits. However a state’s ability to win over investments with BIT is contingent on whether or not this government can deliver subsequent good behavior in compliance with BIT provisions (Allee and Peinhardt, 2011).

The reason why states would deliver good behavior is to avoid great reputation cost, which is important because globalization has

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