Influence Of Structural Power And Its Development On IPE

Structural power is a critical variable that merits more extensive and more clear attention in Latin American political economy and in comparative politics more broadly. According to Strange (1987) structural power can also be defined as the power to decide how things should be done, the power to relate to each other, relate to people or to corporate enterprises. It is vested in four structures namely: production structure which concerns who produces what, where, under which conditions and how it is sold to whom and on what terms. The finance structure concerns the international monetary system, international finance and debt. The knowledge structure is about who has access to knowledge and technology and on what terms. Finally, the security structure is the framework of power created by the provision of security by some human for others.

Balaam (2015) asserts that International Political Economy (IPE) is the rapidly developing social science field of study that tries to understand international and global problems using varied interdisciplinary collection of analytical tools and theoretical perspectives. IPE flourishes on the process that Joseph Schumpeter called “creative destruction”. IPE can also be defined as a new branch of International Relations (IR), it first and foremost focuses on the basic frictions between states and markets in an international context. These frictions are dynamic. Vulnerable nation states are countries with a less developed industrial base and low Human Development Index relative to other countries. The essay below seeks to assess the view that structural power can make IPE more complex and development more difficult for vulnerable nation states.

Structural power can be a dangerous tool in a sense that it can be used as a revenge tool by governments against others. This as a result can make IPE more complex and development more difficult, it is vested in four structures as aforementioned. Production is the act of creating value and wealth- is always linked to power the issue of who produces what for whom on what terms therefore, lies at the heart of IPE. Recent decades have seen intense changes in the production structure, with production of certain high value items such as automobiles shifting from the US to Japan and now other countries such as Korea, Mexico, Brazil and China. These structural changes affect the distribution of wealth and power around the world and therefore, impact on other structures of IPE.

In addition, while vulnerable nation states are dependent on primary products and the increasing globalization of the world economy can explain much of the general trend in deteriorating worth of the Less Developed Countries (LDCs), other factors have intensified the process, either by hindering or by failing to facilitate the desired development. First, the existing structure of their exports does not allow these sates to take full advantage of growth in world trade, it is important that they expand away from primary production to industrial activities. However, variation of exports has proved to be difficult option as policy for trade liberalization and improvement in many of these countries has only revived the static comparative advantage of primary produces. Therefore, the development of the LDCs is affected, they are demoralized in that their primary products are bought with cheap prices and sold back to them as useful merchandises with expensive prices.

Moreover, according to Bora et al (2004) the disapproving physical location of many LDCs also increases the cost of trading and thus undermines the competitiveness of domestic production for export. In addition, reduced entries of official development assistance (ODA) and financial flows to LDCs have also made it difficult for them to make the resources available for the development of the physical infrastructure and human capital that are vital in manufacturing production. The global trade regime under the World Trade Organization may have more costs for the exports and trade of the LDCs. Not only has the favored trade margin diminished as a result of world-wide trade liberalization but the WTO regime also make better schemes that benefit small states in compatible and the required reforms threaten to erode special treatment altogether.

Internal factors such as civil unrest and corrupt or incompetent bureaucratic systems in many LDCs constrain production and exporting activities and thereby, contributing to their marginalization. When a particular social group loses relative power, changes are likely to follow in who produces what and how such processes are planned. Additionally, when methods of production change there will probably follow a shift in the distribution of social and political power. The production structure impacts on the state through the relative power of the classes who are involved in the production. Therefore, structural power over production concerns the way that productive relations are arranged, the choices of what is produced, for what purpose and importantly what is not produced take place within the production structure. Through decision over what is produced in any particular location cash crops, high technology, cars, or textiles power in the production structure has a far reaching impact on the IPE and its uneven development.

Furthermore, knowledge is power for those who can use it well. It is therefore, a key factor in IPE. Nations with poor access to knowledge find themselves at a handicapped relative to others, increasingly in the world today the giveaways made in the security, production and finance structure depend on access to knowledge in its several forms. The joining between technology and terrorism tightens day by day, in recent decades technological change combined with market oriented policy changes have exposed more and more of us to what Joseph Schumpeter calls a process of “creative destruction” as mentioned earlier. As people are drawn more tightly together through trade, capital flows and Information Technology (IT) a growing sense of unease is wrecked out as consumers, this integrative process give us access to a larger quantity of new and better products.

However, workers and producers, globalization brings a greater competition and less job security. An export of technology that has critical military or economic applications tends to weaken national security, not strengthen it. Consequently, third world states tend to lack national power because they are unable to employ their economic and military resources and internally they have underdeveloped political and social systems. According to Button (2016) the knowledge structure was introduced by Susan Strange into her work to capture the power which resulting from the control of knowledge. Though structural power itself is dependent on the utilization of knowledge for Strange all four structures (security, production, finance and knowledge) effect on each other with no single one being of automatic systematic importance. The knowledge structure is therefore entered by the structural power resulting from material resources in the other structures and does not represent something above the material world of political economy relations.

Strange proposes three essential changes possible within the knowledge structure itself: changes in the facility and control of information or communication systems; changes in the use of language and non-verbal channels of communication and the changes in the belief systems which impact value judgments and thus political and economic decisions. The knowledge structure is projected to cover a field widening from control of data resources impact on political economic relations. Thus, power in this structure may be based on socialized belief systems or status coffered by the ownership of treasured knowledge giving power over access and communication of knowledge resources. As knowledge becomes increasingly known as a prized economic resource, its role becomes a important aspect of any analysis seeking to understand and explain power in the IPE.

The knowledge structure governs what knowledge is exposed, how it is kept and who communicates it by what means to who on what terms. Consequently, power and authority are conferred on those occupying key decision-making positions in the knowledge structure. This holds those who are trusted by society with the storage of knowledge and the generation of more knowledge and those who control in any way the channels by which knowledge or information is communicated. Strange notes that the technological changes have influenced the knowledge structure and in turn the production structure, resulting in centralization of power with the big transnational corporations (TNCs). Thus structural power is used transnationally over the global economy.

Additionally, Barker et al (2005) states that, it is well recognized in the critical IPE literature that international monetary relations are described by the exercise of structural power, whereby actors influence the choice of others without appearing to put pressure on them through possession of key strategic resources that shape the wider structures within which states and corporate enterprises relate to one another. One such example of structural power is the impact of US rate decision or movements in the value of the dollar on the world economy more generally, allowing the US greater degree of autonomy in its macroeconomic policy and allowing it to rebound economic change costs onto other states. Other example include the decision by US authorities to let the dollar float to liberalize their capital account and free financial markets in the 1970s that changed the international financial system.

Security from natural forces or the threats and actions of others is perhaps the most basic human need. When one person or a group offers security, a security structure is formed; the nature of security structure was a contributing factor in the debate over China’s MFN status in 1994. Sometimes China has been thought of a threat to US security interests, at other times it has been a part of a trilateral balance of power along with the US and the Soviet Union.

Islam (2013) also asserts that it has always been important when opening or adjusting any industrial policy to have a thorough understanding of how target industry function as well as the motivations of those involved in it. This applies as much to security policy as it does to anti-trust or mergers policy, for example in the latter case there has been a physical lag in correcting the governance structure with regard to the service sector and network industries. The struggle is that as industry has changed so the internal structure and organization of business have often become more difficult. This has not been helped in the transportation context by the increasing complexities of financial markets and the internationalization of obtaining, production and marketing that heavily influences it.

Teasing out exactly what the underlying industrial structure is therefore, has become more difficult and with it the identification of vulnerable points and appropriate security measures in the chain. But it is not just assessing the need for the direct security intervention that is important to appreciate market structures. At the same time as industries have become international, it has become more costly for the authorities to regulate them, in the case of shipping security for example, the sheer size of the sector, the number of containers and tons of bulk moved, the technology deployed and the geographical scope of transaction make it prohibitely costly for any country, even one as wealthy as the US. Security can be threatened by nature or by human beings, and the threat to security can be local or global, selective or general. Thus, in any political economy environment there is a significant need for security for things to be done properly and thus to ensure the survival of that social system. According to Strange, “The security structure is the framework of power created by the provision of security by some human beings for others and those who provide the security acquire a certain kind of power which lets them determine, and perhaps limit, the range of options available to others. Accordingly, whoever or whatever is in a position to exercise control over (i. e. to threaten or to preserve) people’s security, especially from violence, possesses structural power. According to Strange, whoever or whatever offers protection against the possibility of violent conflict that threatens security is able to exercise power in other non-security domains as well.

In line with Barker et al (2005) structural power comes from the control of certain material, informational and procedural resources and is not reliant on the consent of other actors and can be used accidentally and deliberately. For example, since the economically strong nations such as the United States of America and China possess informational resources in terms of technology which the economically weaker countries do not have, they enforce whatever they want on the LDCs. This as a result, affect the development of developing nations in a sense that the economic giants may execute western practices that are not applicable in their context. To conclude, structural power can make IPE more complex in a sense that the impact it makes on one structure affects all the structures of IPE and thereby, making the development of economically weak states.