T he subject of international political economy, emphasize on the politics of international economic relations. One can expect to deal with economic issues of trade, finance, production, environment and development, but not from the perspective of economic theory. Instead , this write up seeks to explore International Relations concepts, ideas and literatures on the economic relations among states, and between states a nd non-state actors such as firms, societal groups and international organisations . The focus will therefore be on the political problems tha t arise as a consequence of the increasing density of international e conomic relations. This essay seeks to compare and contrast the realist and liberalist perspective in relation to the international political economy.
Realism and liberalism are useful theories when considering international relations, and in fact having the two opposing . International relations can be used to describe the academic pursuit to gain an understanding of how nations interact with each other (Dunne and S Smith 2005). However, it can be argue d that in the globalised and multi - stakeholder world that now exists , a focus purely on the states involved will not be able to fully explain the actions and reactions on the international stage. This paper describe s international relations as the interactions of all stakeholders involved in setting nationally interested policies and the related diplomacy required to execute said policies . This wide view of international relations will test both realism and liberalism since both theories were established to explain the actions and reactions of the individual citizen, but have subsequently been grafted o n to the study of state systems . Therefore, both theories look to extrapolate the individual to the system view. This also suggests that both theories look to the state as the principle actors.
It is easy to argue that realism has been the predominant theory in the previous decades, this is most prevalent in the language and naming principles of the epochs throughout time which are always pre- or post- a named conflict. It is also true to say that realism has a natural home in international relations, which has always traditionally focused on the conflicts and tensions between nations, with realism "depicting a world characterised b y security competition and war" . This could be in part due to the large-scale conflicts that have shaped and re-shaped the world in the last century, with realism providing a useful theory to assist in understanding the conflict-led means of ordering the world. The most recent of which was the Cold War which proved realism on the global scale as the bi-polar world between the US and USSR seemingly edged closer to conflict through continuous competition, suggesting a anarchic world competing for survival and dominance.
There are three main types of realism which have been developed as the theory is continually challenged by actual events. Classical Realism focuses on the innate desire for humans to dominate one-another and extrapolates this view to states. Neorealism suggests that all states are seeking to survive within an international system, but as that system is anarchic in nature each state must survive on its own( Cooper 2004). Burchill describes this as states being "thwarted by the absence of an overarching authority which regulates their behaviour towards each other." The latest addition to Realism is the Offence- Defence Theory, which suggests that "war was more likely when states could conquer each other easily. When defence was easier than offence, however, security was more plentiful, incentives to expand declined and cooperation could blossom." This line of thought may seem fairly logical, that a state will only engage another state where it believes it has the ability to win. However, it could be used to explain why the number of state-on-state actions has decreased without discounting the whole realist way of thinking. It also rather simplistically places nations alongside each other as "‘like-units' engaging in instrumentally rational decision making." It is both the simplicity of understanding nations as ‘like-units' as well as the notion of states acting perfectly rationally which if often cited as a reason against realism.
Realism is certainly an easier theory to define, and provides a simple measure for the casual o bserver