Politics of Economy
Kemal Gumus
6IPE.pptThe Process
- Selection of the research question
- Identification of the methodology to answer that question
- Research
- Definition, Description and Analysis
- Explanation and Prediction
Good questions
- Answer a puzzle
- Take part in a debate
- Add to the “tree of knowledge”
- For this class, they need to focus on a question related to the field of political economy
- Because this is a “research paper” focus on “Is” versus “ought” questions
Finding patterns or connections
- Dependent variable Outcome
- Independent variable Potential
(hint: consider economic and political factors) Cause
Q. Why did the US impose sanctions on Chinese tires?
Q. Why did Saudi Arabia join the WTO?
Q. Do sovereign wealth funds present a threat to national security?
Correlations
- Correlations are associations or a relationship between variables
- Positive
- Negative
- Plotting the correlation shows a relationship exists but it does not necessarily explain the cause. (The “why” question)
Correlation and causation
- To show “causation” we first need to show that a correlation exists
- Correlations are necessary but not sufficient to prove causation
- Problems with spurious correlations
Hierarchy of Understanding
- World views/Frameworks
- Theories
- Generalizations, explanations and predictions
- Concepts
- Facts/Raw data
Hypothesis
- Assumptions to be tested against the evidence
- It’s your answer to the research question(s) you posed.
- Descriptive hypothesis (propose a “fact”, test to see if it exists. Need evidence to confirm)
- NAFTA creates jobs/destroys jobs in the US
- Explanatory hypothesis (seek to explain the fact)
- Saudi Arabia joined the WTO because of “X”—e.g., global economic pressures, political leadership, or domestic economic problems
Hypotheses have to be testable
- A nonfalsifiable hypothesis
- We won because God is on our side
- Fallacy of composition
- All Americans are wealthy
- Tautology
- Armed conflict caused the civil war
- Reductivism
- One cause can explain everything
- False Inference
- Infering too much from the data you have
Sources for finding hypotheses
or where do I get my argument?
- Deduction (literature, logic)
- Induction (observations, facts)
- Grounded theory generalize from cases
Both need to be tested
Methodology
- Quantitative
- Qualitative
Steps in hypothesis testing
- 1. Define key terms (dumping, elite)
- 2. Identify the Variables (independent/dependent)
- 3. Specify the expectations of the hypothesis. (if….then)
- 4. Collect and examine the evidence
- 5. Draw conclusions from the evidence
Example
- Puzzle: Do Sovereign wealth funds threaten national sovereignty? What should be done?
OR are Why has OPEC’s power to control the price of oil weakened?
- Descriptive hypothesis…
- Explanatory hypothesis …
- Identify variables (I and D)
- Specify expectations
- Collect and examine evidence
- Analyze evidence and present findings
Findings
- Consistent
- Inconsistent
- Counterintuitive
- All are interesting….
Paper Topic Ideas
- Pick a financial crisis/government regulation
- Pick a trade debate
- Regional economic organizations
- Sanctions/Aid (sticks/carrots)
- Compare/contrast the role of the state in...reducing poverty, the IPE of hunger, combating the negative impacts of interdependence
- Explain/Evaluate/compare a policy choice
- Role and power of MNCs
Paper Topics continued
- Issues: Environment, Labor, Intellectual Property,
- Illicit economic activities—drugs, money laundering, trafficking
- Economic liberalization/reform
- From centrally planned economies to free market economies (e.g., Eastern Europe, Cuba, Vietnam)
- Shift to liberalization—Chile, Peru, Mexico
Country Analysis Option
- The key is to pick an “interesting” (problematic) case. I have to approve the country selection. Example: Zimbabwe – from breadbasket to basket case..why and how?
- Case study in economic development (Success or failure or crisis)
- Corruption
- Highly Indebted countries
