Columbia International Affairs Online: Working Papers

CIAO DATE: 03/2009

Globalization and Global Governance in the 21st Century

Jeffrey Hart, Joan Edelman Spero

January 2008

Centre for International Peace and Security Studies

Abstract

An examination of international economic relations in the six decades since World War II reveals many ways in which political factors have shaped economic outcomes. The postwar security system significantly affected the postwar economic system. The creation of a bipolar security system following the outbreak of the Cold War led to the separation of the Eastern and Western economic systems and provided a basis for the dominant role of the United States in the Western system and of the Soviet Union in the Eastern system. The end of the Cold War led in turn to the end of the East-West economic divide and to the integration of the formerly Communist countries and China into the global capitalist economy.

Domestic policymaking had a major impact on the course of international economic relations. Political concerns often outweighed economic considerations in economic policymaking. The Marshall Plan, for example, was a security policy more than it was an economic recovery program. Aid to the developing world was motivated primarily by Cold War concerns. Similarly, aid by the West to the formerly Communist countries after the end of the Cold War was motivated primarily by security concerns, such as the desire to prevent nuclear proliferation and to make a return to communism as unattractive as possible.