Global political economy

Since publication of my book, The Political Economy of Inter Snational Relations, in 1987, the international economy has experi enced a number of fundamental changes. These changes include the end of the Cold War and the victory of democratic capitalism over authoritarian communism, the rise of the information or Internet economy, and the triumph of neoliberal market-oriented economic ideology (deregulation, privatization, and a decreased role for the state in the economy). Important technological advances in telecom munications, transportation, and information technology have sig nificantly increased the interdependence of national economies. These several developments have transformed the international economy and ushered in a new era of economic globalization.

In addition to these important steps toward the creation of a truly global economy, since the mid-1980s the world has also witnessed the extraordinary growth of economic regionalism as a countermove ment to economic globalization.' Western Europe has been the lead ing player in what Jagdish Bhagwati has called the "Second Regional ism." The North American Free Trade Agreement (NAFTA) and less formal arrangements in Pacific Asia have, along with the European Union, moved the world toward regional economic arrangements. Regional and other important developments in the real world of eco nomic and political affairs have been accompanied by innovations in economic theory that are highly relevant for an understanding of international political economy (IPE). Theoretical innovations include the "new growth theory," the "new economic geography," and the "new trade theory." Taken together, these novel theories constitute a significant contribution to our understanding of the political econ omy of international relations. Thus, both real world and theoretical developments have set the stage for this book's interpretation of global political economy.