The term “international political economy” has appeared often in the titles of many recent studies of international affairs. The main theme of this volume is the interplay of economic and political factors in international relations; while the theme is very fashionable, the substance is very elusive. The present volume, consisting of ten articles, intends to draw together the major strands of thought and approach, presenting in one volume a concise statement of the nature and diversity of the discipline.

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This is a study in the political economy of the paradox which characterizes one of the complex dynamics of the interdependent world of today—the paradox that while the process of internationalization in national economies has markedly accelerated over the last quarter century, the same process has evidently increased state intervention in international economic relations. As “borderless economy” moves forward, it is observed, the raison d'etre of national borders becomes a great deal larger, not less.
Within this wide range of concern, the present paper addresses the contrast of the two apparently conflicting trends in the development of current international relations: one is the increasing flow of goods, services, money, technology, knowledge and information that move across national borders; another is the larger roles states have been playing to control in many measures the way national economies are exposed to global impacts.
To understand the interrelationship of these contending trends, the ellipse model is suggested as the conceptual framework for analysis. A ellipse has two focuses instead of just one center for a circle, supposing each of which represents markets and states, respectively. This implies that rivalries and coordination, antinomies and adjustments between markets and states are what really gives direction to the international political economy. The model is to argue against simplistic perspectives of either liberal globalists who assume that in time states will be overshadowed by markets in importance as an organizing principle of the community of nations or state-centric mercantilists who presuppose that states will continue to dictate markets as they used to.
Behind the complex interactions between markets and states lie two developments: first, the dramatically changing paradigm of technology with computer and electronics as its core and the resulting emergence of the new pattern of international competition in which major competitors on the world markets are required to drive forward a global strategy in each component of activities, including R. & D., production, marketing, finance and advertising; secondly, there is the new, added notion of comparative advantages which gives states the role of creators or organizers of the nation's comparative advantages in international trade; factor endowment such as natural resources, labor or capital that used to constitute the traditional notion of the nation's comparative advantages becomes less significant. It is observed that much of the way markets and states interact with each other constitute their responses to these deep-rooted changes and that what really matters in dealing with this epic, historic junction in the international political economy will not be whether markets prevail over states or vice versa, but how socio-politico frameworks could be organized on the international level, as well as the national, which are capable of making markets work more efficiently.

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The field of international political economy has become an established, and still developing, field in international relations studies. And there exists a broad consensus that the field deals with the relationship between the system of states on the one hand and the international market mechanism (or capitalism) on the other. However, beyond that consensus, the current theoretical situation in the field may be termed chaotic since so many theories have been presented which differ in basic assumptions and logic. The purpose of this paper is thus to provide some tentative taxonomy to organize these varied international political economy theories.
I develop the taxonomy along three dimensions. Firstly, I discuss two well-known traditions in the field-liberalism and structuralism. Liberalism emphasizes global welfare and contends that the liberal international economic system enhances not only global economic welfare but also the national welfare of each participating nation and thus that as far as nations are to seek for increases in their national welfare, there should not be any fundamental conflict among nations. Structuralism focuses on the distribution of wealth among nations and maintains that under capitalism (market mechanism), the wealth is distributed unevenly among nations according to the productive means they possess. And, classical structuralism has contended that the center-periphery relations that are brought about by such an uneven distribution is perpetual. However, both liberalism and structuralism have since developed several variations of their own: interest group liberalism and nationalist liberalism in addition to classical liberalism; neo-structuralism and its interventionist and non-interventionist versions in addition to classical structuralism.
Secondly, I examine two different views on international economic order: distributionalist and institutionalist. The distributionalist view equates international economic order only to the distribution of interests and power among nations. The institutionalists assume the existence (and effectiveness) of regimes or institutions that are fairly independent of, though originally based on, the distribution of interests and power among nations. I then examine the relationship between liberalism and structuralism (including their variations) on the one hand and these two world order views on the other (e. g., liberal-distributionalist vs. liberal-institutionalist).
Finally, I investigate the relationship between classical international political theory and each of the varied types of international political economy theories as categorized above.

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The recent increase in studies of international political economy has resulted in a variety of approaches but caused some confusion regarding the definitions of international political economy. This paper epistemologically examines the studies of International Political Economy, which are categorized into three groups: dependency, neorealism, and political economy. The examination also discusses the implications of these studies to the field of International Relations in general, and specifically to those in Japan.
The dependency school (i. e. A. G. Frank, P. Evans, I. Wallerstein), tried to explain how and why countries in Latin America and Africa failed to develop their economies and fell into dependency. These studies emphasized economic and historical factors in international relations, and attributed the dependency to economic development of the developed economies and to the dynamics of the world economy. There are economic explanations for international relations, yet to simply overemphasize external economic factors by dismissing social structure variables, at best results in economic determinism.
The second group are the studies of the neorealists (i. e. Robert O. Keohane, Kenneth Waltz, R. Gilpin). In contrast to the studies of dependency, those of the neorealists are based on the supremacy of politics over the economy, and the focus on the politics of the international economy. They have borrowed almost all of the important notions of international relations from the realists (i. e. power as the key concept, conflictive nature of inter-state relations, the state as a rational actor). Among them, Waltz is the exception stressing that the international system overrides the state. Their approach is rather static because they argue that the international system is dominant and that the international regime is and should be maintained.
The third, the political economy approach (i. e. Richard K. Ashley, Roger Tooze, Susan Strange, Alain Lipietz, Robert Cox), states the limitations of both the dependency and the neorealists approaches, and pursues a construction of an analytical model by discussing the complicated interaction of politics and economies. They aim to locate the theoretical underpinnings of other approaches through a critical analysis. Yet, the direction of their future development is rather unclear.
This review of International Political Economy studies suggest a few alternatives to improve the field. First, it is necessary to develop a critical analysis of the work in order to be aware of the state of the field. This point is extremely important for studies in Japan since historically they have imported their theories of International Relations. Second, it is important to carefully examine ways in which politics and the economy interact with each other and in conjunction with other factors in international relations. Third, a discussion of the nature of the Japanese political economy is desired in order to reduce the vacuum in this area and to generate discussions of international comparisons.

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Todays Industrial world is being transformed at a rate unprecedented since the first industrial revolution toward the era of the third industrial revolution. Computer-Aided Manufacture, Compuer-Aided Design, Flexible Manufacturing Systems and Computer-Integrated Manufacturing are just some of the concepts by which the production systems and industrial systems are changed dramatically.
Enormous gains in productivity and competitivenes also have been changed the relationship among advanced industrial nations such as United States of America, European Countries and Japan. Under the regime of Pax-Americana, U. S. A has been the leader of techological development. However the introduction of new techologies, particulary elecronics technology have been changed the basic characterstics of military technology, also consumer technology could support military development as spin-on. So high technology is the basic means of military power and production technology.
These technological innovation has changed the relative advantage in the world economy and brought frictions among advanced industrial nations, especially U. S. A and Japan. Intellectual property issues are another weapons of gaining advantage of technology against competitors. Techology war is the phenomena of frictions in the third industrial revolution. The techno-nationalism came from the antagonistic and protectionist sentiment for the technolgical advantage and independence by themselves.

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Japan has been recognized as one of the largest economic powers in the 1980s as it has become the largest creditor nation in the world economy. At the same time, Japanese foreign policy has changed from that of a small state to that of one actively involved in the world political economy. Since Japan has risen to become an economic power, the importance of its foreign policy has increased to the extent that it affects the world political economy. It is now a matter of necessity to understand the Japanese decision making process, especially when patterns of its foreign policy are changing within the context of a changing world political economy.
However, the Japanese foreign policy making process is not well understood among Western academics simply because of the lack of written materials in English as well as the slow development of scholarly communications. In order to promote such communication, this paper aims at introducing theoretical approaches at three different levels of analysis-international system, society, and state-mainly developed in the United States. The purpose of this paper is to promote academic communication based on a common understanding of existing approaches.
International level explanations are strong in the sense that they predict a change in foreign policy when a nation is on the decline or on the rise. As in the case of Japan, increased economic power expanded its range of policy options. Before the 1980s, Japan had no choice but to acquiesce in American demands as represented by the case of beef and orange negotiations. However, in the 1980s, it seems Japan can respond to American requests in several different manners as suggested by its decision to correct its trade imbalance with the U. S. by using revaluation, demand stimulus, liberalization of certain markets and so on. However, international level explanations are weak in explaining why and how these policies were chosen.
Society level explanations are necessary in order to indentify input from society in the policy making process. In particular, Joanne Gowa and Peter Gourevitch have contributed interesting insights concerning the strength of interest groups. However, society level explanations seem to have the same pitfalls. That is to say, they tend to ignore how interests in society are reflected in the policy making process.
Thus, we have to focus on state level explanations. Kent Calder's latest approach to Japanese domestic distributive politics is interesting not only because it focuses on the state but also because it takes into account the interaction between state and society. It suggests that when the ruling party, the LDP, is in crisis, it tends to restabilize its position by compensating usually neglected interest groups as opposed to big business which usually receives favorable treatment. Applied to foreign policy making, this implies that a change in foreign policy that seemingly reflects Japan's new position in the world market may instead be a consequence of the state of LDP and hence have little to do with what the Realists say about redefinition of the national interest.
This is an interesting approach but not without flaws. One of the important points is that it is necessary to focus on the relationship between the ruling party and the still powerful bureaucracy. What is recommended in this paper, a sensitivity to the interaction of three levels of approach, must be inductively understood through empirical studies after all.

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In June 1988, the Japanese government decided on beef and citrus import liberalization in consequence of Japan-U. S. negotiations. This decision was international-centric rather than domestic-centric. Why did the Japanese government adopt the U. S. government demand? The aim of this paper is to try to analyze this Japanese decision from the context of a changing global system.
Substantial changes are taking place in the contemporary global system. These changes affect the global agricultural trading system, too. The closed system of national market dependence on its traditional agricultural system has been changing into the open system of global market dependence since 1970's, with important consequences for the industrialization of agriculture. We can characterize this new system as intensifiing international competition among the agricultural export countries, especially the U. S. and European countries. Today, when heavy subsidies deny American farmers substantial markets in Europe, the U. S. government has begun to regard the construction of an agricultural regime as a serious problem.
There is the “international policy-making” process, in which the global or regional order (rules, institutions and procedures for a regime) is decided, in an era evolving towards international interdependence. The characteristics of this decision arena tend to develop the “ideology-centric negotiation” rather than “interest-centric negotiation”. Although in an “international policy-making” process the form of negotiation is principally multinational negotiation, it may be characterized by bilateral negotiation depending on the situation. The Japan-U. S. negotiation in 1988 on beff and citrus was a part of the “international policymaking” process.
In the negotiations, Japanese protectionists (farmers and most members of the so-called norin zokugiin of the ruling Liberal Democratic Party Dietmen who have, because of specialized knowledge, accumulated experience on agriculture) have intended to deal with the U. S. government demand to open the Japanese markets by increasing the quota of beef and citrus imports. But Japanese negotiators, bureauchief-level officials of the Ministry of Agriculture, Forestry and Fisheries and executive members of norin zokugiin, have found it difficult to compromise with the U. S. government because of protectionist pressures and a fear of weakening their negotiation powers in the Uruguay Round. They also need to pretend to be protectionist (“pseudo-protectionism”) in order to lead the soft-landing for opening the market.

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In 1988 the Japanese government made two historical decisions on agricultural trade. One was to liberalize eight residual import restriction items including tomato juice, which the GATT judged illegal under its rule. The other was to announce import liberalization on beef and orange from 1991 in response to the U. S.'s strong request. Because of these measures the level of Japan's import liberalization on agricultural products became almost equal to that of other highly developed industrial countries. Why was Japan far behind Western countries in trade liberalization on agricultural items? Conventional wisdom explains that Japan's ruling party, supported by agricultural sectors, opposed to open domestic market on foreign products for fear of being defeated at an election.
The paper provides a slightly different interpretation on this question. International conditions as well as domestic political reasons should be considered. Japan has been slow to open its market since any international regime on agricultural trade was underdeveloped. In other words Japan justified the delay of agricultural import liberalization because of “weak” regime. In the first part, the paper makes it clear that the GATT rules on agricultural commerce are “weak” compared with that on industrial commodities. For instance, inhibition of quantitative restriction, the basic GATT rule, is not applied to agricultural commodities. Export subsidies, are exceptionally admitted for agriculture.
In the second part, the paper discuses why a “weak” regime was established. The same rule of industrial commodities is not applied to agricultural products brcause of two reasons. One is the attribute of agricultural products strongly influenced by climatic and geographical factors. The other is more abstract. Almost no countries including the U. S., which overwhelmingly occupied the export market, had complained of the agricultural “weak” regime.
The United States recently however tries to strengthen this “weak” regime at the Uruguay Round, the GATT multirateral trade negotiation. The U. S. government, facing agricultural economic difficulties, insists on making the regime more strict through the repeal of quantitative restrictions and the prohibition of export subsidies. The U. S. still wants to expand agricultural exports to decrease overproduction of agricultural products. The U. S. administration, however, has to reduce its large export subsidies, expended to compete with the international market, because of its budget deficit. That is why the U. S. insists on reforming the agricultural trade regime. The European Community, which gradually increased its market share of the agricultural trade on account of export subsidies, has not agreed with the U. S. In the final part the paper argues why Japan has liberalized agricultural imports under this “weak” regime.

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Japan's ODA (Official Development Assistance) has increased rapidly over the past ten years, yet political analysis of the impact of Japan's ODA on the international system has not kept pace. Nonetheless, we are beginning to see various arguments emerge concerning Japan's ODA, and this article will explore some of the recent arguments on the role and influence of Japan's ODA to clarify the parameters of the current debate. There are roughly two theoretical perspectives from which to analyze the influence of economic assistance; (1) the “liberal” perspective which regards ODA as an international public good, (2) the “realist” perspective which regards ODA as a means to pursue national interest. Furthermore, we can characterize the objectives of economic assistance into two general categories; (1) political motivations and (2) economic motivations.
According to this categorization, this article will analyze how the Japanese government has rationalized its aid policy by surveying both the “Diplomatic Blue Book, ” (published by the Ministry of Foreign Affairs) and the “White Paper on Economic Cooperation, ” (published by MITI) over the thirty years since 1958. A categorization of the changes in aid rationales is presented in Table 1 and 2 and Chart 1. In general, over the past three decades, we find that Japan's aid rationales shift from a national interest orientation to an emphasis on Japan's international responsibility, and shift from being motivated by promarily economic interests to wider political interests.
In fact, the increase in Japan's overseas aid has not only made an international contribution, but has also increased Japan's economic and political influence over the recipients. If we look at the Japan's decision-making on ODA, however, we find that there are few cases in which the Japanese government has employed ODA as a tool for political leverage or as a positive sanction. Japan gains what Klaus Knorr defines as “non-power influence” (Knorr, Power of Nations), by fostering a more interdependent relationship with the developing countries through its ODA. Instead, the Japanese government has promoted the untying of its aid and co-financing with international organization such as the World Bank in order to contribute more to the international common interests.
What then motivates Japanese ODA policy? In analyzing Japan's aid to the Phillipines, which has increased markedly since 1986, some policy makers (e. g. the Ministry of Foreign Affairs) have give weight to political cooperation with the United States in their support for increasing aid to that country. Other policy makers, however, (e. g. MITI and business circle) have stressed Japan's own economic interests in the Philippines. Many analysts of the Philippine case stress the importance of “external pressure” on Japan's ODA policy-making. But the influence of “external pressre” in Japan's aid decision-making may not be a major factor because Japan's iterests frequently overlap with the interests of the Western allies (especially the United States).
To date, the debate on both the implications of and the motivations for Japan's ODA policy has, for the most part, been shaped by the “liberal” and “realist” conceptions of state behavior. Concrete case studies now need to be done to test these general assumptions made in these arguments.

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The purpose of this paper is to examine why the United States has finally chosen to agree to increase IMF quotas in the Sixth, Seventh, and Eighth General Review despite its increasing reluctant attitude towards IMF quota increases since the 1970s.
For this purpose it is necessary to understand how the U. S. policy towards IMF quota increases is formulated and on what reason the U. S. government decided to agree with quota increases in cooperative way. The hegemonic stability theory attributes the reluctant attitude of hegemonic state towards international regime to the decline of hegemonic power, but fails to demonstrate a close association between power and the particular outcome of the hegemonic state. The regime-oriented theory, which deals with international regime as an independent variable, emphasizes the influence of the international regime on state behavior, but few empirical studies have been done on demonstrating the relation between international regime and state policy formulation. Different from systemic analysis, this paper seeks to understand how the hegemonic state perceives the international organization on particular issues by focusing on the domestic factors of the formulation of U. S. policy towards IMF quota increases.
The IMF has played a more important role in extending balance of payments assistance to member countries since the Oil Shock. The resources which the IMF uses for this purpose consist mainly of members' quotas. Since 1945 a general review of members' quotas has been conducted six times among member countries to adjust IMF resources to the growing world economy. However since the 1970s it has become more difficult to come to an agreement of the size of total increases and of a member's quota.
One of the causes of this difficulty in making an agreement can be attributed to the U. S.'s reluctant attitude towards quota increases. The size of a member's quota is calculated so as to reflect its relative economic size in the world economy. A member's quota, also, determines the voting power of each country. So, through three general reviews of quota increases since 1974, the United States has faced the dilemma between maintaining leadership in the IMF and attempting to reduce its financial burden in its declining relative economic strength in the world economy.
This paper shows that the U. S.'s reluctant attitude was based on the increase of congressional interest in formulating U. S. policy towards the IMF. That is, the Congress located the problem of IMF quota increase in the context of domestic politics. Also IMF quota increase came to be considered as a way of foreign aid to the developing countries instead of as a way of stabilizing the world economy.
This paper finally shows that the reason why the U. S. chose to agree with quota increase is that the U. S. decision-makers, after they could hold the veto power in the second amendment of the Article, admitted the role of IMF such as gathering information on international financial and monetary situation, offering a forum for discussion among member countries, and conducting surveillance of other member countries. In this respect, the IMF affects the U. S. policy formulation towards the international financial situation, especially the debt problem.

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Sufficient attention has not paid to the reproduction of labor in the literature of the capitalist world-system. But recently we can see a growing recognition of the fact that the availability of appropriate labor power is of primary importance for the accumulation of capital in a particular region. For example, international labor migration as one of the various forms of ‘the global labor supply system’ has attracted the increasing interest of international economics students.
This paper, inspired by this trend, attempts to analyze what I call ‘the mechanisms of externalizing the cost of labor reproduction’ in the capitalist world-system. The relative cheapness of available labor, in addition to its quantity and quality, constitutes one of the essential requirements of an appropriate labor supply. Labor has been made cheap by imposing part of the reproduction cost upon the so-called ‘non-capitalist’ spheres.
On such mechanism is the ‘functional dualism’ between the capitalist sector and the rural subsistence economy in peripheral economies. The process of disintegration in the rural subsistence sector has been constrained, since this sector assumes the costs reproducing new generations of workers and absorbs those that have become redundant in the capitalist sector. This ‘subsidy’ paid by the subsistence sector is translated into the extremely low wages which characterize the peripheral economies.
Marxist feminism has emphasized the similar mechanism between the market and the home in center economies. Wage is only a monetary cost of reproduction and requires a lot of unpaid domestic work to accomplish a reproduction of labor meeting the hard demand of center economies. This non-monetary ‘subsidy’ overwhelmingly assumed by women helps lower the wage level relatively.
The present restructuring of the world economy called ‘the new international division of labor’ can be seen also as a restructuring of ‘the mechanisms of externalizing the cost of labor reproduction.’ The rural subsistence enclaves in the Third World are diminishing and the expanding informal sector in ‘hyper-urbanized’ cities functions as a substitute for the rural sectors. The penetration of transnational corporations caused and/or facilitated this transformation, indirectly through the cultural change of Third World societies, and directly through the employment of rural young women into TNCs' ‘world market factories.’
Most women in these factories are fired around the age of 24. After that they tend to emigrate to developed countries where more and more cheap labor is needed because of the ‘informalization’ now under way in the process of industrial restructuring, or disappear into the informal sector of Third World cities.
Women have always disproportionately assumed the burden of externalized reproduction costs and the restructurings of these mechanisms have historically pivoted on women. This is true in the latest global restructuring which is at the same time a restructuring of the international political economy. Marxist feminism has much to offer concerning this.

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