This is a curated International Political Economy (IPE) glossary. From my IPE course with Sırma Altun Demir to my own readings, I want to gather important terms and explain them in my own words. Since I am already building this knowledge base in Obsidian, why not open the doors so everyone can browse it? Filter by tag below, or just Ctrl + F for a specific term!
"Political economist Frank Stilwell defines the economy as: 'the means whereby goods and services are produced, exchanged, and distributed among the members of society. Incomes and wealth are generated through these processes of production, exchange, and distribution'.
'Economics', writes Stilwell, 'is the discipline that studies these processes'.
So what’s the difference between economics and political economy?
According to Stilwell, political economy rejects a narrow focus on 'pure markets' in favour of a 'broader view of economic enquiry, its social purpose and its political application'. It’s an approach that stresses the importance of historical processes, structural forces and institutions in shaping economic outcomes.
PE also acknowledges the role values play in influencing what economists choose to study, how they conduct their investigations, and the policy implications of their research."
Source: Henderson, T. (2015, February 24). Why study political economy. Progress in Political Economy. Link
"One school of thought brings together analysts who focus on the role of the state and the importance of power in shaping outcomes in the international political economy. These theories stress the importance of the nation-state in understanding activity in international relations. This grouping is variously termed ‘mercantilist’, ‘neomercantilist’, ‘statist’, ‘state-based theory’, ‘power politics’ or ‘economic nationalist’."
Source: O'Brien, R., & Williams, M. (2024). Global political economy: Evolution and dynamics (7th ed.). Red Globe Press.
Realism is also a name used for this school of thought, but I found the word "realism" polarizing since using the main actor for the political economy doesn't make this school of thought realistic, but rather nation-focused.
"In contrast to the economic nationalist theories, liberals focus on either the individual or a wide range of actors from the state to the corporation to interest groups. They do not see the state as a unitary actor, but as influenced by numerous factors. Rather than stress the inevitability of conflict, liberals search out the conditions for cooperation. They tend to play down the role of force and coercion in human affairs and emphasize the ability of individuals to choose between attractive courses of action or negotiate their differences."
Source: O'Brien, R., & Williams, M. (2024). Global political economy: Evolution and dynamics (7th ed.). Red Globe Press.
Liberal thought is also using aspects of vanity and gluttony in a way that overlooks how actors that benefit from the liberal system are ready to exploit the other actors that are mostly inferior. This gluttonous behavior is more visible when you look at the TNC discussions.
"Critical writers tend to perceive international economic relations as a zero-sum game. The structure of global capitalism is fundamentally conflictual. Two forms of conflict are prevalent in the global economy. Within states, capitalists and workers have competing interests and the state is the scene of a class struggle as the workers and bourgeoisie clash."
Source: O'Brien, R., & Williams, M. (2024). Global political economy: Evolution and dynamics (7th ed.). Red Globe Press.
Even though critical thought is mostly attributed to the Marxists (and I can see why), it also includes other power imbalances such as gender inequalities (feminist theory), environmental concerns (environmentalists), post-colonial inequalities and the 3rd option a.k.a. the Global South (postcolonial analysis) and so much more...
Even though these two terms look like they are exactly the same, there is a key difference:
Weaponized interdependence or globalization is an asymmetric relation where actors specifically use the global production networks and the chokepoints so that some of the network relations create bottlenecks with them, positioning themselves as an important actor.
GPN is a network map that shows how interconnected supply and demand are. This concept, however, expands with critical services and infrastructure since status quo GPNs are working in harmony with the internet, data, and logistics.
Related concepts: global value chains & actor-network theory.
Interdependence is a type of dependency relation that focuses on how actors are connecting for their profit and wellbeing. It literally means "the fact of depending on each other."
Pax Britannica was a period of relative global stability, free trade, and naval dominance led by the British Empire. This supremacy period ended when industrial growth in continental Europe (esp. Germany) and the United States challenged the system.
This concept serves as the primary historical model for Hegemonic Stability Theory. Also, we can examine the Bretton Woods System from this point of view.
The gold standard was a system where a country ties the value of its money directly to gold. "A paper money can be traded for a set amount of physical gold." Currently, the world economies are using floating currencies.
Floating currency is a monetary system where a currency's value is determined entirely by foreign exchange market dynamics. Core drivers are interest rates, economic indicators such as GDP, inflation rates, and geopolitical stability.
Renewed imperialism is the direct extension of the old colonial system, often referred to as neo-imperialism, which means "New Imperialism". After the dismantling of colonial systems, powerful nations extended their power through economic dominance, military intervention, and territorial expansion.
The phrase refers to the dialectical process of marketization and the push for social protection against marketization.
The first movement is the market expansion where the free market pushes to create a self-regulating market. It treats fictitious commodities (labor, land, money) as real goods to buy and sell, pulling the economy away from social and moral rules.
The second movement (countermovement) is society fighting back to protect human life, nature, and local communities from market harm. It uses laws, rules, labor unions, and tariffs to control the market. It tries to put the economy back under social and moral control (re-embedding).
As you can see, we are currently in a twisted cycle of double movement. We, unfortunately, don't have the old trust in institutions that can supply us with the motivation to trigger the second movement. In those countries that use the countermovement tools as a way to control the first movement, it is mostly enabling a mass narcosis for the society, a delusion of countermovement.
The "balance of terror" describes a Cold War nuclear deterrence state where the U.S. and Soviet Union avoided direct war through Mutually Assured Destruction (MAD), relying on nuclear parity and fear.
To this day we still haven't used nuclear warheads because of the fear of MAD.
The Marshall Plan was a 1948 American foreign aid program that provided $13.3 billion to rebuild Western Europe, stop communism, and restore trade. The counter-plan used by the second world countries was named the "Molotov Plan".
Embedded liberalism is an economic system combining international free trade with domestic state intervention. It is an adaptation of liberalism to survive.
Bretton Woods is actually not a person but an area within the town of Carroll, New Hampshire, United States, whose principal points of interest are three leisure and recreation facilities.
The Bretton Woods system was a post-WWII arrangement that established fixed exchange rates tied to the U.S. dollar and gold, created the International Monetary Fund (IMF), and founded the World Bank.
Prescriptive theory focuses on how states and global actors ought to behave, establishing moral, ethical, or strategic standards for international conduct rather than just describing how the world works.
This theory is also available in nursing and architecture...
State capacity is a word that I mix up a lot and mostly forget. I mostly remember the definition and forget the name of the term.
State capacity is a government's ability to achieve its policy goals, primarily defined by core pillars like collecting taxes, enforcing law and order, and delivering public services.
This is mostly important to regulate the informal sector and ease of innovation in the country.
The infant industry argument is an economic theory stating that new domestic industries need temporary trade protection such as tariffs, quotas, or subsidies from foreign competitors until they can grow, achieve economies of scale, and compete globally on their own.
I feel like this term is mostly associated with the Asian developmentalist states, just a feeling!
Ally shoring (also called friendshoring) is a business and government strategy. It means moving the making and buying of goods to countries that share political values and are trusted friends. This helps stop supply problems caused by rival nations.
This is important for today's climate (not the weather).
The main difference between an MNC (Multinational Corporation) and a TNC (Transnational Corporation) is their management style and national identity: an MNC has a central HQ in one home country that controls its foreign subsidiaries, while a TNC operates as a more flexible, decentralized network without a single strong home country focus.
The United Nations favors the usage of MNC and emphasizes the health of MNCs, since TNCs are a hot discussion topic in the IPE circle.
Toyota’s Just-in-Time (JIT) is a manufacturing strategy where parts arrive and products are built precisely when needed, making only what is needed, when it is needed, and in the exact amount required. Core elements include pull production, the Kanban signboard system, and minimal warehouse stock.
Until this system, I didn't realize Kanban had a real usage outside of Notion!
Modernization theory views societal development as a linear transition from traditional to modern states. American economist Walt Rostow famously framed this evolution through Rostow's five stages of economic growth, which outline how countries progress economically:
Dependency theory is a theory that states that global poverty and underdevelopment are caused by the exploitation of poor nations by wealthy ones. It divides the world into a wealthy core and an impoverished periphery, arguing that international trade and capitalism trap developing countries in a state of structural disadvantage.
The post-Washington Consensus is an economic framework that modifies the original neoliberal Washington Consensus by emphasizing institutional reform, poverty reduction, and a balanced role for the state alongside free markets. It emerged in the late 1990s, notably championed by economist Joseph Stiglitz, in response to the shortcomings and crises experienced by developing nations under strict market fundamentalism.
The Mundell-Fleming Model explains how an open economy works using the "Unholy Trinity," also called the Impossible Trinity or Trilemma, which states a country can pick only two of three goals:
There are also some wild combinations:
The Asian Financial Crisis began in July 1997 when Thailand was forced to unpeg the baht from the U.S. dollar, triggering a devastating economic collapse that swept across East and Southeast Asia. Speculative currency attacks quickly spread panic to neighboring countries like Indonesia and South Korea, causing local currencies and asset markets to plunge by up to 80 percent. To stabilize their crashing economies, these nations had to secure massive international bailouts from the IMF, which came attached to strict, painful austerity measures and structural reforms. Ultimately, the crisis reshaped global finance by forcing Asian economies to rebuild with stronger regulatory oversight, deeper foreign reserves, and more flexible exchange rate frameworks.
Newly developed countries, commonly referred to by economists as Newly Industrialized Countries (NICs), are nations whose economies have outpaced other developing-world peers but have not yet fully reached the status of advanced, traditional developed economies.
Austerity policies are official economic measures used by governments to reduce budget deficits and public debt through spending cuts, tax increases, or a combination of both.
Austerity policies in the European Union are government spending cuts and tax raises meant to lower public debt and budget deficits. Key elements include reduced public budgets, capped welfare benefits, and revived fiscal rules.
Anthropocentrism is the belief that human beings are the central or most important entities in the universe, holding that humans alone have intrinsic value while nature and animals exist merely as resources.
Techno-optimism is the philosophical belief that technological innovation is the primary driver of human progress and the ultimate solution to humanity's greatest challenges.
The human epoch usually refers to the Anthropocene, a proposed geological epoch defined by humanity’s massive, irreversible impact on Earth's ecosystems and geology.
An externality is a cost or benefit caused by an economic activity that affects a third party who did not choose to incur that cost or benefit.
In economics courses (at least in my freshman year course) the main externality they teach is permit trading and how CO2 emissions are posing a threat for the firm. This proves that the externalities the economics view is also the environmental degradation that the same economic system is creating...
China model (or the Beijing consensus) is the direct rival for the Washington Consensus. Washington model limits the state's role (liberalism) and pushes for institutional reforms through global bodies like IMF and WB.
Beijing model pushes state as the architect and focuses on long term national goals using industrial policies. (This created the discussion for the "is the industrial policies back?" in the West)
A risk management strategy used to limit potential losses in investments by taking an offsetting position in related security.
Derisking is the reallocation of entire portfolios, redesigning supply networks etc. Hedging is the counterbalancing position does not need a derisking.
Imo this looks like hedging -> derisking -> decoupling
A political model where governments use infrastructure as a primary tool for territorial control, economic integration, and geopolitical influence.
The 21st century high demand infrastructures consist of data grids/centers, internet cables, transport networks, and large-scale public works.
Variegation in botany is the appearance of different colored zones, spots, or stripes on plant leaves, stems, or flowers.
The variegation in terms of geo-institutional differentiation is the description that states how economic and political acts produce uneven spatial and institutional arrangements across different regions.
Simply: "administrative practices vary by territory, shaping distinct local development paths."
"We introduce the term ‘extended state infrastructural power’ to account for how the exercise of state power frequently relies on extended networks that include both formal state agencies and major domestic firms. Mann’s classic definition of infrastructure power was conceived of as a state’s ability to extract revenue or realise large-scale projects within its territory. The notion of ‘extended’ infrastructure power captures the degree to which infrastructural capacity often depends on the networks between both state agencies and key domestic firms as well as the relationship between key domestic firms and global supply chains."
Extended state infrastructure power in an age of networked competition: The cases of Thailand and Taiwan, Andrew Stokols and Justin Kollar
A framework for economic development. Uses neoclassical economic tools to study how a country's economic structure changes over time. It views a nation's production and industrial position as endogenous to its changing factor endowments (labor, capital, natural resources).
The assumption is endogeneity because if it was exogenous that would mean that industrial position and production is out of the actors' control. (State would assume market won't grow naturally.)
A government's capacity to actually penetrate civil society and logistically implement political decisions throughout its territory.
This is a specific type of state capacity. State capacity (realized power) is also different from state power (potential power). Why they are so similar...
This economic understanding views the economic behavior as deeply tied to culture, social status, and institutional rules rather than purely material and market focus.
"Geography is the destiny."
A governing model where the state plays a proactive, planned role in guiding economic growth and industrialization. You can see the Asian newly industrialized countries. TSMC, Samsung, LG and so much more are a byproduct of developmentalist policies.
Even though this term sounds like a blah (it really sounds like a vibe coded game) it actually explains the strategic competition between countries to dominate future technologies like AI, advanced semiconductors, 5G networks, quantum computing and use protectionist measures to get the lead.
This term is about how Taiwan is using its global semiconductor manufacturing as a weapon. This is the key factor why Mainland China didn't invade Taiwan since a potential invasion would devastate the global supply chain thus creating a chain reaction for the US intervention.
It is simply the merit-less society. Where elected leaders grant government jobs, contracts, or special favors to their supporters and financiers. Also known as spoils system.