International Political Economy

International Political Economy

Politics and Markets • Role of the state in liberal democracies: to induce economic performance • Pluralist Approach • The state is a neutral arena • Actors have varying particular interests • State has no intrinsic interests • The study of politics is about government processes • Class Approach • There are common class interests • The ruling class controls the agenda • It implements policy • Thereby reducing popular influence

Needs of the state • The state needs satisfactory economic performance from private asset controllers for • Stability • Revenue • So the state • Avoids reducing the confidence of business • Induces performance with incentives

Changing the terms • Losers in the market can change the rules if they have sufficient political influence • Given the comments of Olson (“collective action problem”) and Lindblom (“privileged position of business”), these will be oligopolistic firms see Sugar or Steel

Hegemonic Stability Theory • Central Idea: The stability of the International System requires a single dominant state to articulate and enforce the rules of interaction among the most important members of the system. • To be a Hegemon, a state must have three attributes: • The Capability to enforce the rules of the system; • The Will to do so; • A Commitment to a system which is perceived as mutually beneficial to the major states. • Capability rests upon three attributes: • A large, growing economy; • Dominance in a leading technological or economic sector; • Political power backed up by projective military power.

The Historical Record • Portugal 1494 to 1580 (end of Italian Wars to Spanish invasion of Portugal) Based on Portugal's dominance in navigation • Hegemonic pretender: Spain • Holland 1580 to 1688 (1579 Treaty of Utrecht marks the foundation of the Dutch Republic to William of Orange's arrival in England) Based on Dutch control of credit and money • Hegemonic pretender: England • Britain 1688 to 1792 (Glorious Revolution to Napoleonic Wars) Based on British textiles and command of the High Seas • Hegemonic pretender: France • Britain 1815 to 1914 (Congress of Vienna to World War I) Based on British industrial supremacy and railroads • Hegemonic pretender: Germany • United States 1945 to 1971 Based on Petroleum and the Internal Combustion Engine • Hegemonic pretender: the USSR

What does the Hegemon Do? • The system is a collective good which means that it is plagued by a "free rider" syndrome. Thus, the hegemon must induce or coerce other states to support the system The US system tries to produce democracy and capitalism, thus it champions human rights and free trade. Other nations will try to enjoy the benefits of these institutions, but will try to avoid paying the costs of producing them. Thus, the US must remain committed to free trade even if its major trading partners erect barriers to trade. The US can erect its own barriers, but then the system will collapse. • Over time, there is an uneven growth of power within the system as new technologies and methods are developed. An unstable system will result if economic, technological, and other changes erode the international hierarchy and undermine the position of the dominant state. Pretenders to hegemonic control will emerge if the benefits of the system are viewed as unacceptably unfair.

Bretton Woods (1944) • The Bretton Woods system of international monetary management established the rules for commercial and financial relations among the world's major industrial states. The Bretton Woods system was the first example in world history of a fully negotiated monetary order intended to govern monetary relations among independent nation-states. • Preparing to rebuild the international economic system as World War II was still raging, set up a system of rules, institutions, and procedures to regulate the international monetary system. The planners at Bretton Woods established the International Bank for Reconstruction and Development (IBRD) (now one of five institutions in the World Bank Group) and the International Monetary Fund (IMF).

Bretton Woods (cont’d) • The chief features of the Bretton Woods system were, first, an obligation for each country to adopt a monetary policy that maintained the exchange rate of its currency within a fixed value—plus or minus one percent—in terms of gold; and, secondly, the ability of the IMF to bridge temporary imbalances of payments. • In the face of increasing strain, the system eventually collapsed in 1971, following the United States' suspension of convertibility from dollars to gold.

Legacy of the Great Depression • The experience of the Great Depression, when proliferation of foreign exchange controls and trade barriers led to economic disaster, was fresh on the minds of public officials. • The planners at Bretton Woods hoped to avoid a repeat of the debacle of the 1930s, when foreign exchange controls undermined the international payments system that was the basis for world trade. The "beggar thy neighbor" policies of 1930s governments—using currency devaluations to increase the competitiveness of a country's export products in order to reduce balance of payments deficits—worsened national deflationary spirals, which resulted in plummeting national incomes, shrinking demand, mass unemployment, and an overall decline in world trade.

Great Depression (cont’d) • Trade in the 1930s became largely restricted to currency blocs (groups of nations that use an equivalent currency, such as the "Pound Sterling Bloc" of the British Empire). These blocs retarded the international flow of capital and foreign investment opportunities. Although this strategy tended to increase government revenues in the short run, it dramatically worsened the situation in the medium and longer run. • Thus, for the international economy, planners at Bretton Woods all favored a liberal system, one that relied primarily on the market with the minimum of barriers to the flow of private trade and capital. Although they disagreed on the specific implementation of this liberal system, all agreed on an open system.

Hegemony • International economic management relied on the dominant power to lead the system. The concentration of power facilitated management by confining the number of actors whose agreement was necessary to establish rules, institutions, and procedures and to carry out management within the agreed system.

America’s Advantages • That leader was the United States. The United States had emerged from the Second World War as the strongest economy in the world, experiencing rapid industrial growth and capital accumulation. The U.S. had remained untouched by the ravages of World War II and had built a thriving manufacturing industry and grown wealthy selling weapons and lending money to the other combatants; in fact, U.S. industrial production in 1945 was more than double that of annual production between the prewar years of 1935 and 1939. In contrast, Europe and East Asia were militarily and economically shattered. • As the Bretton Woods Conference convened, the relative advantages of the U.S. economy were undeniable and overwhelming. The U.S. held a majority of world investment capital, manufacturing production and exports. In 1945, the U.S. produced half the world's coal, two-thirds of the oil, and more than half of the electricity. And the U.S. held 80 % of the world's gold reserves.

The need to trade • As the world's greatest industrial power, and one of the few nations unravaged by the war, the U.S. stood to gain more than any other country from the opening of the entire world to unfettered trade. The United States would have a global market for its exports, and it would have unrestricted access to vital raw materials. The United States was not only able, it was also willing, to assume this leadership role. • William Clayton, the assistant secretary of state for economic affairs, was among myriad U.S. policymakers who summed up this point: "We need markets—big markets—around the world in which to buy and sell."

The Atlantic Charter • The Atlantic Charter affirmed the right of all nations to equal access to trade and raw materials. Moreover, the charter called for freedom of the seas, the disarmament of aggressors, and the "establishment of a wider and permanent system of general security." • As the war drew to a close, the Allies sought to construct what had been lacking between the two world wars: a system of international payments that would allow trade to be conducted without fear of sudden currency depreciation or wild fluctuations in exchange rates—ailments that had nearly paralyzed world capitalism during the Great Depression. • Without a strong European market for U.S. goods and services, most policymakers believed, the U.S. economy would be unable to sustain the prosperity it had achieved during the war. In addition, U.S. unions had only grudgingly accepted government-imposed restraints on their demand during the war, but they were willing to wait no longer, particularly as inflation cut into the existing wage scales with painful force.

The Liberal International Economic Order • Free trade relied on the free convertibility of currencies. Negotiators at the Bretton Woods conference, fresh from what they perceived as a disastrous experience with floating rates in the 1930s, concluded that major monetary fluctuations could stall the free flow of trade. • The liberal economic system required an accepted vehicle for investment, trade, and payments. Unlike national economies, however, the international economy lacks a central government that can issue currency and manage its use. Bretton Woods set up a system of fixed exchange rates managed by a series of newly created international institutions using the U.S. dollar (which was a gold standard currency for central banks) as a reserve currency.

Gold Standard • In the nineteenth and twentieth centuries gold played a key role in international monetary transactions. The gold standard was used to back currencies; the international value of currency was determined by its fixed relationship to gold; gold was used to settle international accounts. The gold standard maintained fixed exchange rates that were seen as desirable because they reduced the risk of trading with other countries. • Imbalances in international trade were theoretically rectified automatically by the gold standard. • A country with a deficit would have depleted gold reserves and would thus have to reduce its money supply. The resulting fall in demand would reduce imports and the lowering of prices would boost exports; thus the deficit would be rectified. • Any country experiencing inflation would lose gold and therefore would have a decrease in the amount of money available to spend. This decrease in the amount of money would act to reduce the inflationary pressure.

Reserve Currency • Supplementing the use of gold in this period was the British pound. Based on the dominant British economy, the pound became a reserve, transaction, and intervention currency. But the pound was not up to the challenge of serving as the primary world currency, given the weakness of the British economy after the Second World War. • The only currency strong enough to meet the rising demands for international liquidity was the US dollar. The strength of the US economy, the fixed relationship of the dollar to gold ($35 an ounce), and the commitment of the U.S. government to convert dollars into gold at that price made the dollar as good as gold. In fact, the dollar was even better than gold: it earned interest and it was more flexible than gold.

Pegged Rates • What emerged was the "pegged rate" currency regime. Members were required to establish a parity of their national currencies in terms of gold (a "peg") and to maintain exchange rates within 1 %, plus or minus, of parity (a "band") by intervening in their foreign exchange markets (that is, buying or selling foreign money). • In practice, however, since the principal "reserve currency" would be the U.S. dollar, this meant that other countries would peg their currencies to the U.S. dollar, and—once convertibility was restored—would buy and sell U.S. dollars to keep market exchange rates within 1%, plus or minus, of parity. • Meanwhile, in order to bolster faith in the dollar, the U.S. agreed separately to link the dollar to gold at the rate of $35 per ounce of gold. At this rate, foreign governments and central banks were able to exchange dollars for gold.

Institutions • International Monetary Fund (IMF) • International Bank for Reconstruction and Development (IBRD)

IMF • The IMF was to be the keeper of the rules and the main instrument of public international management. IMF approval was necessary for any change in exchange rates. It advised countries on policies affecting the monetary system. • The big question at the Bretton Woods conference with respect to the institution that would emerge as the IMF was the issue of future access to international liquidity and whether that source should be akin to a world central bank able to create new reserves at will or a more limited borrowing mechanism. • The IMF was born with an economic approach and political ideology that stressed controlling inflation and introducing austerity plans over fighting poverty. This left the IMF severely detached from the realities of Third World countries struggling with underdevelopment from the onset.

Subscriptions and quotas • a fixed pool of national currencies and gold subscribed by each country as opposed to a world central bank capable of creating money. • The Fund was charged with managing various nations' trade deficits so that they would not produce currency devaluations that would trigger a decline in imports. • The IMF was provided with a fund, composed of contributions of member countries in gold and their own currencies. When joining the IMF, members were assigned "quotas" reflecting their relative economic power, and, as a sort of credit deposit, were obliged to pay a "subscription" of an amount commensurate to the quota. • The subscription was to be paid 25% in gold or currency convertible into gold and 75% in the member's own money. • The IMF set out to use this money to grant loans to member countries with financial difficulties. • Each member was then entitled to be able to immediately withdraw 25% of its quota in case of payment problems.

Financing trade deficits • In the event of a deficit in the current account, Fund members, when short of reserves, would be able to borrow needed foreign currency from this fund in amounts determined by the size of its quota (contribution). • Members were obligated to pay back debts within a period of eighteen months to five years. In turn, the IMF embarked on setting up rules and procedures to keep a country from going too deeply into debt, year after year. • IMF loans were not comparable to loans issued by a conventional credit institution. Instead, it was effectively a chance to purchase a foreign currency with gold or the member's national currency. • The IMF was designed to advance credits to countries with balance of payments deficits. Short-run balance of payment difficulties would be overcome by IMF loans, which would facilitate stable currency exchange rates.

This flexibility meant that member states would not have to induce a depression automatically in order to cut its national income down to such a low level that its imports will finally fall within its means. • Thus, countries were to be spared the need to resort to the classical medicine of deflating themselves into drastic unemployment when faced with chronic balance of payments deficits. Before the Second World War, European nations often resorted to this, particularly Britain. • Moreover, the planners at Bretton Woods hoped that this would reduce the temptation of cash-poor nations to reduce capital outflow by restricting imports. In effect, the IMF extended Keynesian measures—government intervention to prop up demand and avoid recession—to protect the U.S. and the stronger economies from disruptions of international trade and growth.

Changing the par value • The IMF sought to provide for occasional exchange-rate adjustments (changing a member's par value) by international agreement with the IMF. • Member nations were permitted first to depreciate (or appreciate in opposite situations) their currencies by 10 %. This tends to restore equilibrium in its trade by expanding its exports and contracting imports. This would be allowed only if there was what was called a "fundamental disequilibrium." • (A decrease in the value of the country's money was called a "devaluation" while an increase in the value of the country's money was called a "revaluation".) • It was envisioned that these changes in exchange rates would be quite rare.

US Dominance • The IMF allocates voting rights among governments not on a one-state, one-vote basis but rather in proportion to quotas. • Since the U.S. was contributing the most, U.S. leadership was the key implication. Under the system of weighted voting the U.S. was able to exert a preponderant influence on the IMF. With one-third of all IMF quotas at the outset, enough to veto all changes to the IMF Charter on its own.

IBRD • It had been recognized in 1944 that the new system could come into being only after a return to normalcy following the disruption of World War II. • It was expected that after a brief transition period—expected to be no more than five years—the international economy would recover and the system would enter into operation. • To promote the growth of world trade and to finance the postwar reconstruction of Europe, the planners at Bretton Woods created another institution, IBRD—now known as the World Bank. • The IBRD had an authorized capitalization of $10 billion and was expected to make loans of its own funds to underwrite private loans and to issue securities to raise new funds to make possible a speedy postwar recovery. • The IBRD (World Bank) was to be a specialized agency of the United Nations charged with making loans for economic development purposes.

Trifflin’s Dilemma • American economist Robert Triffin had first identified the problem of fundamental imbalances in the Bretton Woods system in 1960. • The number of U.S. dollars in circulation soon exceeded the amount of gold backing them up. By the early 1960s, an ounce of gold could be exchanged for $40 in London, even though the price in the U.S. was $35. This difference showed that investors knew that dollar was overvalued. • There was a solution to Triffin's dilemma for the U.S. - reduce the number of dollars in circulation by cutting the deficit and raise interest rates to attract dollars back into the country. Both these tactics, however, would drag the U.S. economy into recession, a prospect new President John F. Kennedy found intolerable. • In August 1971, President Richard Nixon acknowledged that the Bretton Woods system was finished. He announced that the dollar could no longer be exchanged for gold. The "gold window" was closed.

The Nixon Shock • By the early 1970s, as the Vietnam War accelerated inflation, the United States was running not just a balance of payments deficit but also a trade deficit (for the first time in the twentieth century). • The crucial turning point was 1970, which saw U.S. gold coverage deteriorate from 55% to 22%, leading holders of the dollar to lose faith in the U.S. ability to cut its budget and trade deficits. • In 1971 more and more dollars were being printed in Washington, then being pumped overseas, to pay for the nation's military expenditures and private investments. • In the first six months of 1971, assets for $22 billion fled the United States. In response, on August 15, 1971, Nixon unilaterally imposed 90-day wage and price controls, a 10% import surcharge, and most importantly "closed the gold window," making the dollar inconvertible to gold directly, except on the open market. • By the year’s end, a general revaluation of major currencies allowed 2.25 % devaluations from the agreed exchange rate. But even the more flexible official rates could not be defended against the speculators.

Transition to Supportership • By March 1976, all the world's major currencies were floating. • Over the next two decades, the system will be renegotiated taking into account the post-WWII recovery of Europe and the Far East. • This will be the WTO (1995).

WTO

Mission of the WTO • The WTO aims to increase international trade by promoting lower trade barriers and providing a platform for the negotiation of trade and to resolve disputes between member nations, when they arise. • Principles of the trading system: • 1. A trading system should be discrimination-free in a sense that a country cannot favor another country or discriminate against foreign products or services. • 2. A trading system should be more free where there should be little trade barriers (tariffs and non-tariff barriers). • 3. A trading system should be predictable where foreign companies and governments can be sure that trade barriers would not be raised and markets will remain open. • 4. A trading system should be more competitive. • 5. A trading system should be more accommodating for less developed countries, giving them more time to adjust, greater flexibility, and more privileges.

Conflict Resolution • Apart from hosting negotiations on trade rules, the WTO also acts as an arbiter of disputes between member states over its rules. And unlike most other international organizations, the WTO has significant power to enforce its decisions through the authorization of trade sanctions against members which fail to comply with its decisions. • Member states can bring disputes to the WTO's Dispute Settlement Body if they believe another member has breached WTO rules. • Disputes are heard by a Dispute Settlement Panel, usually made up of three trade officials. The panels meet in secret and are not required to alert national parliaments that their laws have been challenged by another country. • If decisions of the Dispute Settlement Body are not complied with, it may authorize "retaliatory measures" - trade sanctions - in favor of the member(s) which brought the dispute. While such measures are a strong mechanism when applied by economically powerful states like the United States or the European Union, when applied by weak states against stronger ones, they can often be ignored.

Energy Crisis • The 1973 oil crisis began in earnest on October 17, 1973, when Arab members of the Organization of Petroleum Exporting Countries (OPEC), during the Yom Kippur War, announced that they would no longer ship petroleum to nations that had supported Israel in its conflict with Syria and Egypt -- that is, to the United States and its allies in Western Europe. The Arab-Israeli conflict triggered an energy crisis in the making. • Between 1945 and the late 1970s, the West and Japan consumed more oil and minerals than had been used in all previous recorded history. Oil consumption in the United States had more than doubled between 1950 and 1974. With only 6% of the world's population, the U.S. was consuming 33% of the world's energy.

Oil, especially from the Middle East, was paid for at prices fixed in dollars. Nixon ended the convertibility of the US dollar into gold, thereby ending the Bretton Woods system that had been in place since the end of World War II, allowing its value to fall in world markets. The dollar was devalued by 8% in relation to gold in December 1971, and devalued again in 1973. • The devaluation resulted in increased world economic and political uncertainty. This set the stage for the struggle for control of the world's natural resources and for a more favorable sharing of the value of these resources between the rich countries and the oil-exporting nations of OPEC. • OPEC devised a strategy of counter-penetration, whereby it hoped to make industrial economies that relied heavily on oil imports vulnerable to Third World pressures. Dwindling foreign aid from the United States and its allies, combined with the West's pro-Israeli stance in the Middle East, angered the Arab nations in OPEC. • The effects of the embargo were immediate. OPEC forced the oil companies to increase payments drastically. The price of oil quadrupled by 1974 to nearly US$12 per 42 US gallon barrel (75 US$/m³).

Oil Prices

This increase in the price of oil had a dramatic effect on oil exporting nations, for the countries of the Middle East who had long been dominated by the industrial powers were seen to have acquired control of a vital commodity. The traditional flow of capital reversed as the oil exporting nations accumulated vast wealth. Some of the income was dispensed in the form of aid to other underdeveloped nations whose economies had been caught between higher prices of oil and lower prices for their own export commodities and raw materials amid shrinking Western demand for their goods. Much of it, however, fell into the hands of elites who reinvested it in the West or enhanced their own well-being. Much was absorbed in massive arms purchases that exacerbated political tensions, particularly in the Middle East. • OPEC-member states in the developing world withheld the prospect of nationalization of the companies' holdings in their countries. Most notably, the Saudis acquired operating control of Aramco, fully nationalizing it in 1980 under the leadership of Ahmed Zaki Yamani. As other OPEC nations followed suit, the cartel's income soared. Saudi Arabia, awash with profits, undertook a series of ambitious five-year development plans, of which the most ambitious, begun in 1980, called for the expenditure of $250 billion. Other cartel members also undertook major economic development programs.

Meanwhile, the shock produced chaos in the West. In the United States, the retail price of a gallon of gasoline rose from a national average of 38.5 cents in May 1973 to 55.1 cents in June 1974. Meanwhile, New York Stock Exchange shares lost $97 billion in value in six weeks. • With the onset of the embargo, U.S. imports of oil from the Arab countries dropped from 1.2 million barrels (190,000 m³) a day to a mere 19,000 barrels (3,000 m³). Daily consumption dropped by 6.1 % from September to February, and by the summer of 1974, by 7 % as the United States suffered its first fuel shortage since the Second World War. • Underscoring the interdependence of the world societies and economies, oil-importing nations in the noncommunist industrial world saw sudden inflation and economic recession. In the industrialized countries, especially the United States, the crisis was for the most part borne by the unemployed, the marginalized social groups, certain categories of aging workers, and increasingly, by younger workers. Schools and offices in the U.S. often closed down to save on heating oil; and factories cut production and laid off workers. In France, the oil crisis spelt the end of the Trente Glorieuses, 30 years of very high economic growth, and announced the ensuing decades of permanent unemployment.

The embargo was not blanket in Europe. Of the nine members of the European Economic Community, the Dutch faced a complete embargo (having voiced support for Israel and allowed the Americans to use Dutch airfields for supply runs to Israel), the United Kingdom and France received almost uninterrupted supplies (having refused to allow America to use their airfields and embargoed arms and supplies to both the Arabs and the Israelis), whilst the other six faced only partial cutbacks. The UK had traditionally been an ally of Israel, and Harold Wilson's government had supported the Israelis during the Six Day War, but his successor, Ted Heath, had reversed this policy in 1970, calling for Israel to withdraw to its pre-1967 borders. The members of the EEC had been unable to achieve a common policy during the first month of the Yom Kippur War. The Community finally issued a statement on 6 November, after the embargo and price rises had begun; widely seen as pro-Arab, this statement supported the Franco-British line on the war and OPEC duly lifted its embargo from all members of the EEC. The price rises had a much greater impact in Europe than the embargo, particularly in the UK (where they combined with industrial action by coal miners to cause an energy crisis over the winter of 1973-74, a major factor in the breakdown of the post-war consensus and ultimately the rise of Thatcherism). • Unlike any other oil-importing developed nation, Japan fared particularly well in the aftermath of the world energy crisis of the 1970s. Japanese automakers led the way in an ensuing revolution in car manufacturing. The large automobiles of the 1950s and 1960s were replaced by far more compact and energy efficient models. (Japan, moreover, had cities with a relatively high population density and a relatively high level of transit ridership.)

A few months later, the crisis eased. The embargo was lifted in March 1974 after negotiations at the Washington Oil Summit, but the effects of the energy crisis lingered on throughout the 1970s. The price of energy continued increasing in the following year, amid the weakening competitive position of the dollar in world markets; and no single factor did more to produce the soaring price inflation of the 1970s in the United States. • The crisis was further exacerbated by government price controls in the United States, which limited the price of "old oil" (that already discovered) while allowing newly discovered oil to be sold at a higher price, resulting in a withdrawal of old oil from the market and artificial scarcity. The rule had been intended to promote oil exploration. This scarcity was dealt with by rationing of gasoline (which occurred in many countries), with motorists facing long lines at gas stations. In the U.S., drivers of vehicles with license plates having an odd number as the last digit were allowed to purchase gasoline for their cars only on odd-numbered days of the month, while drivers of vehicles with even-numbered license plates were allowed to purchase fuel only on even-numbered days. The rule did not apply on the 31st day of those months containing 31 days, or on February 29 in leap years — the latter never came into play as the restrictions had been abolished by 1976.

The 1973 oil crisis was a major factor in Japanese economy shift away from oil-intensive industries and resulted in huge Japanese investments in industries like electronics. • The Western nations' central banks decided to sharply cut interest rates to encourage growth, deciding that inflation was a secondary concern. Although this was the orthodox macroeconomic prescription at the time, the resulting stagflation surprised economists and central bankers, and the policy is now considered by some to have deepened and lengthened the adverse effects of the embargo. • Long-term effects of the embargo are still being felt. Public suspicion of the oil companies, who were thought to be profiteering or even working in collusion with OPEC, continues unabated (seven of the fifteen top Fortune 500 companies in 1974 were oil companies, with total assets of over $100 billion)

Since 1973, OPEC failed to hold on to its preeminent position, and by 1981, its production was surpassed by that of other countries. Additionally, its own member nations were divided among themselves. Saudi Arabia, trying to gain back market share, increased production and caused downward pressure on prices, making high-cost oil production facilities less profitable or even unprofitable. The world price of oil, which had reached a peak in 1979, at more than US$80 a barrel (503 US$/m³) in 2004 dollars, decreased during the early 1980s to US$38 a barrel (239 US$/m³). In real prices, oil briefly fell back to pre-1973 levels. Overall, the reduction in price was a windfall for the oil-consuming nations: Japan, Europe and especially the Third World. • When reduced demand and over-production produced a glut on the world market in the mid-1980s, oil prices plummeted and the cartel lost its unity. Oil exporters such as Mexico, Nigeria, and Venezuela, whose economies had expanded frantically, were plunged into near-bankruptcy, and even Saudi Arabian economic power was significantly weakened. The divisions within OPEC made subsequent concerted action more difficult.

In thirty-year-old British government documents released in January 2004, it was revealed that the United States considered invading Saudi Arabia and Kuwait during the crisis and seizing the oil fields in those countries. According to the BBC, other possibilities, such as the replacement of Arab rulers by "more amenable" leaders, or a show of force by "gunboat diplomacy," were rejected as unlikely

International Political Economy