Interdependence and Economic Order

Thesis statement: Interdependence and economics play vital roles in creating or maintaining order in the world politics.

1) Interdependence Order

  • There is an agreement that interdependence creates international system that ensures absence of major political conflicts between countries.
  • It has the element of sensitivity that enables shifts to foreign policy in order to create and maintain new order for political stability.
  • International system is designed through interdependency relationship in order to counter global suspicion that could limit future power and influence of a given state or non-state organization.
  • It is also in agreement that states or non-states that are sensitive to external changes are vulnerable to such changes.
  • Significantly, it enhances the principle of economic interaction essential for creating a democratic society and market.

2) Economic Order

  • Liberals believe that economic interdependency lowers the probability of war due to the increased value of trading that is enhanced through interaction.
  • Realists argue that economic interdependency constitutes to the probability of having war.
  • Most states or non-states actors do not pursue economic principle of autarky.
  • Free markets continue to endeavor in practices that are beyond the absolute normal and recommended ones.
  • Protectionism affects economic interdependency of a state because it minimizes international trading.

3) Creating and Managing Interdependence and Economic Order

This can be achieved through:

  • Making foreign policy that is indivisible through the concept of a collective good.
  • Understand the propaganda slogan of the “new international economic order” designed for politico-economic interest.
  • Incorporate liberals view international economic interdependence.

World order has been a sensitive matter especially in maintaining it within the international system even in times of world political changes.  According to Russett, Starr and Kinsella (363), new states and other international actors in their attempts of overcoming the world political changes in order to maintain the world order have altered the new technologies and norms within their menus and practices in order to adapt to the changes. Even though within this international system, there has been a formal disorder that denotes absence of a central body that relinquishes coercive power, states have effectively cooperated, coordinated, and more so collaborated around the world.

As Russett, Starr and Kinsella (363) point out, an international system can be referred to as an anarchical society whereby the society can only exist when order is maintained within its structure. The three acknowledge that order normally exists either with the inclusion of primitive system of rules or even the non-existence of formal rules. However, societies that normally have central government authorities at times find it difficult to create and maintain order especially through the existence of world political environment which tends to create more problems. Russett, Starr, and Kinsella (363) note that the ability for any state or society to create order or continue with virulent of conflicts depends widely on its relationship with other international actors. In this respect, interdependence serves as one of the features within international systems that can enhance relationship among international players.

This paper argues that interdependency and economy can create conditions that establish order or contribute to problems associated with creating order. It therefore goes ahead to discuss   interdependence and its effects on order within the world politics.

The Impact of Interdependence on Global Politics

According to Niblett (1), an international order within an interdependent system normally implies the absence of major conflicts between related states. It therefore signifies the general acceptance of norms of international behavior by international bodies and other actors relinquished to preserve peace thereby enabling these actors to pursue their objectivities in a competitive manner (Niblett, p.1). In so doing, states would be seen pursuing their economic and political objectives without jeopardizing the peace and prosperity of other international states. However, Niblett points out that the growing economic and military strength especially in China has aroused suspicion among its neighbors. By this, China’s interdependence order could be affected as its neighbors could limit its future regional power and influence thereby creating a geopolitical risk. Additionally, Brazil has tried to manage its interdependence order within its region, but suspicion on its economic size has hindered its ability to push to regional economic integration (Niblett, p.1).  

The impact of interdependence on order in the world politics can best be understood through discussing the evolution of the liberal international economic order.  This entails describing the practices and institutions that are incorporated in order to sustain economic order that is associated with interdependence. As stated by Russett, Starr, and Kinsella (363), economic liberalism refers to the principles of economic interaction and organization within international set-up that normally emphasizes on the importance of having private ownership and free markets. It also includes the process of having unhampered flow of goods, capital, or labor both within and between national economies. This aspect is essential as it provides a compelling insight that denotes the functioning of the current political economy and behaviors that states or non-state actors normally relinquish within the economic order.

According to Russett, Starr and Kinsella (364), interdependence depends on the sensitivity of incorporated systems. This sensitivity is based on the fact that systems that denote interdependent relationship by linking actors are normally influenced by how quickly changes attributed by one actor in one setting have a ripple effect or changes on the other. It therefore means that the emergence of any change in the system that links international actors can amount to surprising consequences. For instance, the 1973 Yom Kippur War resulted into Arab oil embargo which amounted to global economic consequences thereby leading to conservation efforts that adversely changed the way people lived especially in advanced industrial countries (Russett, Starr and Kinsella, 364).

As Russett, Starr and Kinsella (364) point out; international independence has sensitivity and vulnerability dimensions related to creating and maintaining order. With sensitivity, it denotes how quickly an international actor can determine the behavior of other actors or even development in system parts that link actors. The degree at which sensitivity can be measured is determined by how quickly an actor is affected by changes attributed to another actor. The three associate the term, “changes” to a shift to foreign policy, transformation of actors by forming new governments, emergence of internal instability, or more so an economic collapse of any state. In most cases, states and other actors have sensitively initiated policy response where they observe and realize that changes being implemented or as experienced by others are inevitable and therefore should not be ignored. However, it is this sensitivity that has made these actors to become vulnerable to external effects which affect the creation of order.

Russett, Starr, and Kinsella (364) note that normally, actors who are sensitive to external changes are always vulnerable to their effect. The degree of vulnerability as they assert, is based on the measured costs imposed either on state or non-state actor of which is contributed by external events. In short, it is the cost that a state or non-state is deemed to absorb due to its inability to pursue alternative policies that if incorporated can minimize the associated costs.  Presently, international economic order has been in direct conflict with the contemporary developments associated with international political and economic relations (Johnson, p.1). Since 1970, the world economy, especially that of the developing countries, has experienced grave crises which have resulted into severe repercussions. This is based on the fact that developing countries or actors within the states have greater vulnerability to external economic impulse due to their sensitivity to external changes.

According to Spero (29), developing countries have become a powerful tool that influences international activities. This contradicts the earlier years when the gap between developed and developing countries continued to widen in system which was established at a time when most developing countries did not exist as independent states. Spero alludes this irreversible changes in the relationship of forces as envisaged by developing countries as have been contributed by their necessity to actively and fully participate in formulation of policies and application of all decisions related to international community.

But as Russett, Starr, and Kinsella (365) argue, liberals and realists view economic interdependency differently. Liberals view economic interdependence as an act of lowering the likelihood of war through increasing the value of trading that outwits other alternative aggressions. In this perspective, independent states would prefer trading without invading as they are optimistic of more cooperation that will enhance their interaction. Realists on the other hand, are of the view that high interdependence increases the probability of war. This means that anarchical states must constantly worry about their security. But mutually, interdependence enriched states with incentives to initiate war in case it ensures their continued access to valuable materials and goods.

Russett, Starr, and Kinsella talk of comparative advantage of international trade in ensuring the ability of any country to produce goods or services at lower opportunity cost. However, the existence of interdependent free market has hindered most countries in achieving this interdependent economic order. They acknowledge that dismal amount of states within the international system are unable to produce all goods or services that are required by their population for survival and prosperity.  While this has continuously affected these countries, they still tend not to pursue economic policy of autarky based on the principles of comparative advantage. Russett, Starr, and Kinsella (366) point out that the comparative advantage is neither free trade nor autarky as being absolute. In this case, free trade and autarky are opposite ends of spectrum of practices associated with trade.

The impact of interdependence on economic order that affects international free market can well be illustrated through the concept of protectionism.  Russett, Starr, and Kinsella (368) note that the concept of protectionism has seen states incorporating economic policies that are developed in minimizing international trade in favor of domestic production of goods and services required by the society. The varying degree of protectionism is restrictive in that they do not eliminate import in order to maintain the economic viability of domestic industries. This as it stands affects the interdependency of economic order.

As pointed out by Russett, Starr, and Kinsella (369), in most independent states, domestic industries have been protected through economic policies for both political and economic reasons. This has seen newly established industries denied their economic interdependency as they are protected from the impact of cheap foreign imports until the time they would have developed effectively enough in competing at the international market. In most developed countries, protectionism has been incorporated to overcome foreign competitors that undermine the well-being of domestic industries seen as essential for political influence (Russett, Starr and Kinsella, 369).

Through protectionism, states can deploy various techniques in controlling import of foreign goods and services. In so doing, the interdependence and economic order that links state and non-state actors would be breached. The imposing of tariffs on imported products has been effectively used by various states as a protection tool. According to Russett, Starr, and Kinsella (369), tariffs such as taxes or levied duties have not only been devised by various states in raising revenues out of the imported products, but they have been used to regulate the flow of particular foreign goods and services in the country. This is due to the fact that imposing a tariff on a particular imported product raises its cost thereby becoming more expensive to purchase. By this, only fewer products would be sold as compared to the domestically produced ones.

Similar to interdependence sensitivity, protectionism can also make protected domestic industries to manipulate other trading partners. As Russett, Starr, and Kinsella (369) assert, imposing tariffs on domestic industries can protect them from foreign competition, but more significantly, the industries can be manipulated in order to influence other trading partners. For instance, incase imposed tariffs on imported goods are not higher than the once imposed on the same domestically produced product, then the  first state is refereed to have the most-favorable-nation status (MFN) (Russett, Starr and Kinsella (369). This term, MFN, can mislead the manner in which states cooperate, relate, and collaborate since it makes such countries depicted as having MFN to be treated the same as other trading partners.

Additionally, nontariff barriers to trade (NTBs) have been used by various countries in protecting domestic industries. Russett, Starr, and Kinsella (369) point out that quotas control of imports in determining amount of goods that are permitted to sail into the country from a specific source at specified period of time have been used as protectionism tool. This has seen countries such as United States using quotas in restricting the number of automobiles that are imported from Japan. Additionally, states or non-states actors have given out subsidies and loans to domestic industries in order to reduce the cost of domestic production thereby making their products cheaper as compared to the same in the international market. This aspect of protectionism establishes interdependence that results into conditions which undermine the creation of economic order necessary in free market.

Creating and Managing Interdependence and Economic Order

Creating and managing interdependence and economic order requires the concept of collective goods. As pointed out by Russett, Starr, and Kinsella (374), achieving interdependency within the contemporary world system requires collective achievements of goals set out by each state and other international actors. The idea of order within international system can thus be mirrored as a collective good. The concept of a collective good refers to each state as being a member of a group that collectively includes the entire world. Through this, foreign policies deployed by states for economic order should not be seen as divisible. For instance, in case a government provides a common defense; it should be translated as jointly protecting all the residents. By this, it means that even in times when there is an increase in population, deterrence provided to all should not be reduced to cater for specific people.

On the other hand, a collective good has non-exclusive characteristics essential for maintaining interdependence and economic order. In this aspect, any government, through foreign policy, should incorporate international protection laws that ensure exclusive protection of all citizens within the country. For instance, U.S foreign policy in deterring nuclear attack within its territory should not exclude illegal immigrants, foreign diplomats, or other citizens because they don’t pay taxes (Russett, Starr and Kinsella, 373). Through collective responsibility, all people within the United States territory form part of the group being protected by nuclear deterrence and therefore not a single person should be denied benefits of such protection.

In the present contemporary world, international economic order has been used as a propaganda slogan devised by states or non-states actors in order to influence their politics enchantment. According to Johnson (1), the perceived “new international economic order” has only been designed by states or non-states international actors as a propaganda slogan that enriches their political interest. In so doing, the term has been generalized into three connotations that best suit their political interest.

 First, the term has brought out the aspect of the existence of some fundamental wrongs associated with the existing systems of international economic relation. Therefore, a change of system should be incorporated to correct the ineffective existing system of international economy. Second, the associated wrong with the existing system of economic relation is attributed to the past and present policies of the advanced western countries. According to Johnson (1), the past and present advanced western policies through the notion of “new international economic order” are blatantly immoral. Therefore, the new international economic order should be accepted as an obligation that outwits the perceived guilt created by western countries. More significant is the notion that countering changes in international economic order requires states or non-state actors to relinquish massive political power especially by developed countries. This is evident where major countries vote in the assembly of the United Nations in determining the political and economic stability of certain countries.

But as Russett, Starr, and Kinsella (379) point out, most of the developed countries in western powers have incorporated the liberalist view of international economy in order to create and maintain interdependence and economic order. These Western powers have viciously incorporated an economic system within their policy framework that has no associated economic barriers. To achieve this, they have devised an economic system based on private property and free market that ensures minimal barriers to international trade. As the three writes point out, this approach of creating economic system was translated as a major step in creating peace and order in the world especially within the OECD states (p.379). They note that achieving free trade and effective movement of capital requires a world which is not only stable, but predictable as well. Therefore, political-military stability is effectively connected with economic stability.

For instance, the United States have continuously provided order in their international economic system due to their strong military base, economic predominance, and more significantly leadership policies. According to Russett, Starr, and Kinsella (379), the hegemonic state of U.S international system has established itself as one nation that is not only able but willing as well to determine and maintain international rules essential for state-to-state interaction. It is this predominance of U.S hegemonial system that can allow it either to abrogate existing rules or prevent the implementation of such rules among other states.  Even more significant is its ability to dominate the decision making processes that can result into constructing of new rules. But the inability of hegemonial states to effectively exercise their powers may make them come up with rules that enhance interdependence, while on the other hand, prevents free exercise of international economic order.

For instance, integrated program for commodities is one of the foreign policies which have been proposed by United Nations that would see developed countries subscribing common funds for financing some experiments through individual agreement in developing countries. While this has always been incorporated throughout the enhancing of international economic order, some pertinent issues regarding states’ sovereignty on natural resources seem not to be discussed by the developed countries. Johnson (10) points out that developed countries have not yet fully discussed on the issue of permanent sovereignty of nations over natural resources and their economic activities because of their economic impact. By giving full rights to states, it is meant that any state or organization may decide the price of anything they wish to sell and that no one has right to protest over them. This obligation of the rule of law seems to assert the law of the jungle. Therefore, the General Council of the World Trade Organization (WTO) is an essential body that not only helps in decision-making in renewing trade policies, but helps in settling economic inequities associated with trade disputes between member states.

Moreover, developed countries such as the United States should continue with their leadership policy on world economic affair in order to ensure and endure interdependent and economic order. Russett, Starr and Kinsella (392) note that through new structuring of international economic order, domestic industries would have much advantage in competing in global international market. This would be enhanced by developing free-market capitalism that boosts the confidence of all associated partners.


In conclusion, interdependence and economy contribute to conditions that either affect or influence the creation and maintaining of political global order. Moreover, international economic order has only been used by developed countries for their own economic and political interests. It is therefore imperative for states and non-state international actors to develop proper policies that not only insist on freedom of trade, but also act as a solution to the domestic politico-economic problems.

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