Extensions of Power Transition: Applications to Political Economy

This is a paper about theory in political economy terms and political economy in theoretical terms. It unifies power transition theory and applies it to the central questions that now confront political economists. Will trade wars emerge as the security challenge declines? What are the economic effects of integration, trade and growth? How will economic patterns influence international power relationships? This paper offers a preliminary bridge whereon practitioners and theorist may meet to assess the challenges that lie at the intersection between politics and economics. The economic collapse and political dissolution of the Soviet Union left policymakers and scholars searching for new fundamentals about the nature of the international system. During the Cold War era the supreme threat to international peace and security overshadowed economic concerns. The nature of that threat was a powerful mobilizing tool for government, business, and society. The loss of the immediate security threat has forced policymakers to search for explanations which fit the new international circumstances without violating old, cherished and proven concepts. In the last 10 years the foreign policy community has gone through a difficult and wrenching exercise. The sense of uncertainty about the future of the new world stems not just from the radical changes it has undergone, but equally from the realization that the new environment requires the same level understanding of the politics of security and the politics of economics. This paper is designed to accomplish two goals. First, it offers the reader a composite picture of power transition theory, integrating the various extensions and amplifications into a coherent whole. It brings together that new research and weaves it into the rich text of the underlying theory. By providing a systematic outline of the hierarchical relationship among power and satisfaction we offers a foundation for exploring conflictual and economic interactions in world politics. EXTENSIONS OF POWER TRANSITIONS: APPLICATIONS TO POLITICAL ECONOMY Jacek Kugler Claremont Graduate University THE SEARCH FOR NEW EXPLANATIONS This is a paper about theory in political economy terms and political economy in theoretical terms. It unifies power transition theory and applies it to the central questions that now confront political economists. Will trade wars emerge as the security challenge declines? What are the economic effects of integration, trade and growth? How will economic patterns influence international power relationships? This paper offers a preliminary bridge whereon practitioners and theorist may meet to assess the challenges that lie at the intersection between politics and economics. The economic collapse and political dissolution of the Soviet Union left policymakers and scholars searching for new fundamentals about the nature of the international system. During the Cold War era the supreme threat to international peace and security overshadowed economic concerns. The nature of that threat was a powerful mobilizing tool for government, business, and society. The loss of the immediate security threat has forced policymakers to search for explanations which fit the new international circumstances without violating old, cherished and proven concepts. In the last 10 years the foreign policy community has gone through a difficult and wrenching exercise. The sense of uncertainty about the future of the new world stems not just from the radical changes it has undergone, but equally from the realization that the new environment requires the same level understanding of the politics of security and the politics of economics. This paper is designed to accomplish two goals. First, it offers the reader a composite picture of power transition theory, integrating the various extensions and amplifications into a coherent whole. It brings together that new research and weaves it into the rich text of the underlying theory. By providing a systematic outline of the hierarchical relationship among power and satisfaction we offers a foundation for exploring conflictual and economic interactions in world politics. 1. Theoretical Framework: The Structure of Power Transition The heart of this section is devoted to the three components of power transition theory: structure, dynamics, and policy. The structural aspect of the theory is explored to provide an understanding of the nature of power and power relationships among nations that lead to war, as well as accounting for the problems of political economy. In a theoretical sense, power transition defies traditional typecasting. It is neither realist nor idealist, we prefer to call it rationalist. That is, it is structural, yet dynamic, since it recognizes that policy interests are at the core of all disputes. Subject to empirical testing, it 1 Paper presents at the Sixth World Peace Science Congress, held May 24-26 1999 at the Tinbergen Institute in Amsterdam. Much of this material to be published in Power Transitions (2000) (Chatham House) forthcoming. 1 Kugler: Extensions of Power Transitions Published by The Berkeley Electronic Press, 1999