Globalisation and Interdependence 

Introduction to Political Science

Globalisation
Sensitivity to events in different parts of the world reaching distant parts of the world. 
It has increased due to easy communication and transportation. The role of market has also increased in response to the
information and technological advancements. Many multi-national companies lead the market place and where to locate
production effects the domestic economies and politics. 
Some theorists see ‘geo-economics’ as an emerging threat to the role of the state. It is important to keep these changes in
mind, alongside the importance of security. The economic interdependence came into existence after the world war,
however, the oil crisis of 1973 brought economic crisis to center stage. 
The concept of Interdependence
As an analytical word, interdependence refers to a situation in which actors or events in different parts of the system affect
each other. Simply put it means “Mutual dependence”. 
Interdependence brings conflict and friction as well as good and bad times. 
Four distinctions illuminate interdependence:
1. Sources 
2. Benefits
3. Relative costs 
4. Symmetry  
Sources of Interdependence
Interdependence can result in physical and social phenomenons. Both are usually present at the same time. 
Military Interdependence: This is the interdependence that happens due to mutual dependence that arises from military
competition. The physical aspect of this is weaponry, more dramatic because of the nuclear weaponry. 
However, the change in perception and policy can reduce the intensity of military interdependence. Example: America has
no perception about the nuclear weapons of Britain because they know that these weapons would never land on American
soil. 
Economic Interdependence: It is somewhat similar to military interdependence except that it is a result of more traditional
global politics and has a more perception value than a physical value. It involves policy changes of value and cost. Social
choices and physical shortages also effect the economic interdependence. 
Benefits of Interdependence
They are sometimes expressed as zero sums and non zero sums. In zero sum situation, your loss is my gain. And in positive
sun situation, we both gain, while in negative sum situation, we both lose. Both these sums are present in a mutual dependent
relationship. 
Liberal Economists look at mutual dependence as a positive sum situation. Failure to pay attention to the inequality of the
situation and the benefits, they tend to completely ignore the political side of a mutual dependent relationship. Because of
this inequality of benefits there is always some sort of political conflict between economic interdependence. 
Liberal analysts also think that as the world would grow more interdependent, cooperation would replace competition. Their
reason is that interdependence creates joint benefits, and these joint benefits encourage cooperation. However , there is still a
conflict onto who would get more of a joint gain. And also that this economic interdependence can be used as a weapon.
Economic interdependence can be used more efficiently than a force. Even Ecological interdependence can be used as a
weapon. There can be issues onto global ecological issues like global warming etc. 
In the politics of interdependence the disctinction about what is native and what is foreign becomes blurred. Interdependence
also effects domestic politics in an entirely different way, like in the case of Germany and France and that they share the
same currency. 
Costs of Interdependence 
Sensitivity: Refers to the amount and rapidity of the effects of dependence, which is how quickly change in part of the
system bring about a change in some other part of the system. 
Vulnerability: Refers to the relative costs of changing the structure of the system of interdependence. The less vulnerable of
the two countries is not the less sensitive one always. Vulnerability involves degree and depends or more than aggregate
measures. It also depends on whether a society is capable of responding to the change, quickly. It depends on whether the
substitutes are available. 
Symmetry of Interdependence
Symmetry refers to the situation of relatively balanced vs. unbalanced relation of interdependence. If two parties are in a
relationship of interdependence, then the party which is less dependent on the other would be in the state of dominance and
power till the value of 
 the relationship continues. Manipulating these asymmetries of interdependence can be a source of power in world politics. 

 
Where there is asymmetry in the relationship a state may try to link or unlink issues. Hence, the politics of interdependence
demands a prevention of linkages in all issues.
International institutions are used to set rules of interdependence relationship. Ironically, international institutions can also
benefit from weaker players of the interdependence relationship. 
It is not that the larger state always manipulates the asymmetry. At times it is the concern of the issue that helps the weaker
state to perform pretty well. A natural outgrowth of interdependence is a proliferation of trade pacts. 
Leadership in the world economy
The rules of international economy are set by the largest states. These rules come in the shape of transnational state actors
and trade agreements etc. 
Realism and Complex interdependence
The three main aspect of realism are 
1. State are the only significant actors 
2. Military is the dominant instrument 
3. Security is the dominant goal 
Reversing these basic assumption, ensures the emergence of anti-realism/complex interdependent world politics. The
assumption for complex interdependence are 
1. Transnational states are also significant actors 
2. Economic interdependence can be a more dominant instrument 
3. Welfare is the dominant goal. 

Complex interdependence is an ‘ideal type’ interdependence. It is an imaginary concept and does not exist in the real world.
Both realism and complex interdependence are thought experiments, the real world lies somewhere in between these. 

The Transnational Politics of Oil

Oil is an issue that involves the aspects of both realism and complex interdependence. interdependence in a given area are
often done within some rules, norms and laws which are called regime. The international oil regime has changed
dramatically over the last 40 yeas. 
1960 - Oil was a private oligopoly with seven major oil companies that sold oil with private interests having a close
relationship with the governments of major oil consuming countries. The price of oil depended nohow much these large oil
companies produced and how much there was a consumption of oil. It was basically a demand and supply relationship that
decided the price of oil. 
1973- The producing countries took ownership of their oil and decided to fix the price of oil. Hence, it was not just the
demand of oil that played a role in its price but it was rather the choice of the producing countries to set the oil prices. This
meant that there was an extreme shift of power and wealth from the rich countries to the poor oil producing countries. 
Explanations to this shift
There are three ways to explain this change other than the formation of OPEC:  
1. Overall Balance of Power: Realists believe that the balance of power lies
on the military force. Two primal things caused this change in the balance
of power 1) Nationalism 2) Decolonisation. Along with the rise of
nationalism, there was an outcry threat of military intervention. Oil
producing countries could not be colonised because it was costly to rule
nationally awakened people. This change effected the balance of power in
the Persian gulf. 
2. Balance of power in the oil issue: A more modified and modern way of
realism explains that the change in the distribution of power within the
issue of oil itself was the cause rather than the military structure. Before
1973, America was the largest oil producer and hence in the wars of 1956
an 1967, the arab countries could not take hold as they had imposed
embargo on while America met the demands. In 1971, American
production reached its peak and hence America was no more the largest
producer of oil. It now needed to import oil in order to fulfil its demand.
This meant that now the Persian gulf had the leadership of oil production
as it produced surplus oil. 
3. International Institutions: The last way to explain it is independent of
realism. It talks about the changing role of international institutions namely
the OPEC and the transnational institutions. The seven sisters lost power
gradually because of their obsolescing bargains with the producer
countries. When a multinational company goes into a poor state the state is
at the weaker side as it requires the multinational company and even if it
gets small share of the complete revenue generated it still means progress
to the state. But gradually the people of the country  learn the service and
the skill and the infrastructure is built. Now the multinational company can
not bargain. Over time this power to bargain decrease. Other oil companies
stepped in and if the country wanted to get rid of the seven sisters it could
get a deal with relatively smaller companies.  The role of OPEC as a cartel
slowly became more efficient.  It was a governmental cartel and hence its
efficiency could not be effected by private market. In its earlier years
because of the plenty of oil produced it was difficult for the OPEC to
establish power and authority, but after oil got in shortage there was no
way but to surrender to the authority of OPEC. 
Oil as a power resource 
Arab states were able to bring their issues on the forefront of the US agenda. In order to ensure oil supplies these countries
were facilitated and their issues were resolved. But the idea that is oil still an efficient power resource. The answer is
reciprocative interdependence, which is that if Saudia effects the US economy, it will also cause damage to its own economy

which is why it must be understood that oil might not be an as effective power resource as it seems
Transnational Actors
It can be said that states are the most important actors in interdependence, however, we must
understand that within the state not all communities and societies are affected similarly. Hence it
must be understood that apart froth state, societies might also act in a transnational manner and
may also, work to service the interdependence.
Power and Interdependence in Information Age
Information Revolution: It refers to the rapid technological advancements in computer,
communication and softwares. It has lead to a dramatic increase in the rate of information
processing and transmitting information. The key characteristic of information revolution is the
enormous reduction in the cost of transmitting information.
This has caused the establishment of transnational actors at a very low cost. Firms
are able to implement production on large scales and easily. It is easy to cut across
territorial jurisdictions using internet. The Westphalian system of independent
states is strongly e. jurisdictions using internet.  The Westphalian system of independent states is strongly effected.
Despite all the effects of information, it has not yet changed world politics in complex interdependence primarily because
information odes not flow in a vacuum, but in a political state that is already occupied. The growth of informational
exchange causes affects on the state power.
The theoretical schools of world wide politics are:
1. Idealism: It sees the international politics from the perspective of moral and legal values. It is concerned less with
empirical analysis. Focuses on normative judgement. It  is referred to as utopianism. It primarily says that all of the
international principles must be organised through international principles and not on national principles. Human
affairs are above domestic interests. (Neo-Idealism:  Is a perspective on international politics that emphasises the
practical value of morality and in particular respect for human right and national independence.)
Nuclear power is a challenge to idealism. 
1. R