State Power and the Structure of International Trade

State Power and the Structure of International Trade By Stephen D. Krasner

Anyone here ever read the essay? Your thoughts on it?

 

I heard about it, that its very quality essay.

 

Never read it. can you give us a summary of this essay?

 

Summary of State Power and the Structure of International Trade By Stephen D. Krasner

(Note: The original document by Stephen D. Krasner was written in 1976)

Short Summary:

The structure of trade in the international arena, identified by the agreement of accepting and not accepting openness for the for the movement of goods, can be best explained, according to Stephen D. Krasner by a state-power theory of global political economy. This theory begins with the assumptions that the nature of movement in the international economic arenas is determined by states (countries) acting to maximize national goals.

Four goals to be precise:
1. Aggregate National Income
2. Political Power
3. Social Stability
4. Economic Growth

He further implies that these four goals can be related systematically to the degree of openness in an international trading system or global trade system for states of different sizes relative to one another and different development levels.

This analysis leads to a conclusion that openness is most likely to exist when there is a hemegonic (the social, cultural, ideological, or economic influence exerted by a dominant group) distribution of economic power, or potential economic power.

Data on tariff levels, trade proportions, per capita income, national income, regional concentration, share of the world trade market, and share of world investment are then presented.

Trade proportions, tariff levels, and regional concentration are used to describe the degree of openness in the trading system. Per capita income, national income, share of world trade, and share of world investment are used to demonstrate the distribution of state power. The data suggest that the state power theory should be amended to take into consideration domestic political constraints on state action within the international trade arena.

In essence Krasner is trying to contrast and compare the balance of power between nations and their openness within the international trading system. Although trade openness includes tariffs, it also includes trade proportions and trading patterns. Using historical evidence he shows the actions of two hemegonic states, the U.S. and the U.K. to be key determinants of the openness of the system as a whole. One basic question behind his essay:

Why is the system shaped or structured the way it is at the current time? (reflecting the question to mean at any "modern" time.)

His most basic answer is his idea and concept of openness. He then goes further to explain that the international trade system is structured the way it is because states influence this layout with their interests and powers and movements to maximize national goals. Therefore to conclude, when states need to do something, that "something" is their interests, and their actions change the international trade structure, usually according to Krasner, until another interest arises. During the time between events, very often catastrophic events, the international arena remains to be like it is until the next event.

Krasner doesn't say exactly how these events will open up the system, perhaps the answer can be found more in domestic politics as would any trade policy at the time. And since the document was written in 1976 and since it cannot predict when free trade coalitions will come into power as a result of these changes in events it leaves us in question. And finally his mentioning of catastrophic events doesn't tell us exactly why some events can force these open changes while others do not, just that some do, and some do not, for example no mention of world war I was brought up as an event to cause open reactions.

P.S.

I spoke to Mr. Krasner today because I was concerned about some possible differences in his viewpoints between the paper written in 1976 and 2007.

Michael: "I have a copy of your "State Power and the Structure of International Trade" here found the essay to be very interesting, however my question is regarding the time period in which it was written and the differences of opinion in a modern period. What changes, if any, would you point out if re-written to reflect the global arena as it is today?"

Mr. Krasner: "I would be more attentive to the issue of shared gains. I did write a paper in 1991 which appeared in World Politics which made this point. Basically the argument that I made in the original article was too zero sum."

The article he was referring to here is titled "Global Communications and National Power".

 

Sorry about the "I spoke to ... today"..

This was copied from my post in my own blog so the today made sense, with an accurate date.