This essay will critique Jeffry Frieden's chapter, "Capital Politics: Creditors and the International Political Economy," in the book, International Political Economy. The first part of the essay will outline the main arguments of the chapter. The second part of the essay look at the examples used by the author. The third part of the essay will briefly critique the manner in which these arguments were presented.
Frieden attempts to create an analytical structure for evaluating the behavior of creditor countries in the international political economy. He divides this structure into two parts. The first part examines the nation-states as actors, holding that the international investment position of a country tends to affect its policy preferences. The second part of the analytical structure examines the domestic situation of a country, since the interests of domestic groups vary with their respective international investment positions and different groups have different levels of influence over national politics (p. 282).
The first part of the structure looks solely at the international investment position of a country. Frieden divides creditor countries into two categories: new lenders and mature creditors. Both types of countries share an interest in protecting the security of property outside their borders and the stability of international finance. New lenders, those countries which have just begun to export capital, have a stronger interest in securing export markets and a lesser interest in opening their own markets. Mature creditors, on the other hand, are more interested in liberalizing their own markets, since they consume the returns of already accumulated assets (pp. 287-88).
The second part of the analytical structure examines the role of domestic groups. Frieden does not fall into the trap of denying the importance of domestic politics within the realm of international relatio
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