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This chapter covers the period of accelerating growth experienced the UK in the late 1980s, particularly the years 1985–8, which was followed by a protracted decline into deep recession; other industrial countries went through something like the same phases, though with many differences in degree and timing, and these developments were everywhere unexpected––each stage came as a surprise, and forecasts were repeatedly wrong. In hindsight, the recession is widely seen to have resulted from the boom, a view with which this survey agrees. Once more, this recession was very different from its predecessors––each of the two 1970s recessions seemed due in large part to external shocks, but on this latest occasion, it now seems clear that the causes of the recession grew out of previous developments in the domestic economy, which at the time lay undetected. The explanation proposed agrees with the common view that the recession was not due to exogenous shocks of the normal sort, but attributes the boom to over‐optimism rather than (as often argued) to financial deregulation. Section 9.1 sets out this thesis more fully before going on to describe the evidence that bears on it; Sect. 9.2 summarizes the parallel fluctuations in other industrial countries, since they are an important part of the background; Sect. 9.3 then gives an analysis of boom and recession in the UK; Sect. 9.4 considers what the experience of this decade contributes to our understanding of recessions; and Sect. 9.5 discusses the resumption of growth after the recession.

The Hong Kong dollar was fixed against the pound sterling until June 1972. Since 1983, it has been fixed against the US dollar. The linked exchange rate connects Hong Kong with the international economy, and provides an anchor which maintains the community's faith in the currency and people's confidence in the government's management of monetary policy. However, the linked exchange rate also narrows the policy options available to the authorities to withstand external shocks. The opening of China, the Asian financial crisis and the global financial tsunami placed conflicting requirements on the direction of price adjustments. The public and quasi-public sector have not adjusted well in response to these events, and the property wealth has become more unevenly distributed. The domestic economy and its numerous sectors therefore have to possess a higher degree of flexibility and agility in an attempt to accommodate and absorb the external impacts.

This chapter focuses on 1917, which is often identified as the year in which the British Expeditionary Force (BEF) perfected the set-piece operation: the Somme fighting taught the British many lessons that were applied the following year. The Buffs fought in the four British battles of 1917 — Arras, Messines, Third Ypres (‘Passchendaele’), and Cambrai — and will thus help to test this particular thesis. New developments forged both by experiences on the battlefield and improved efficiency in the domestic war economy were breaking through by the winter of 1916-17. The Royal Artillery was the vital force, and the Somme had transformed its equipment and personnel into a far more effective weapon.

This chapter discusses how domestic, regional, and global concerns intersect in Chinese thinking and mutually affect the policy choices leaders make. It starts with an examination of Chinese domestic political economy and then moves outward through the Asian region to the global economy. This offers a distinctive perspective not only on China but also on Europe—a region of comparable size and diversity to the single country China. It also provides for an unconventional assessment of such factors as income disparities. National diversity and competition fueled an engine of growth in Europe despite the daunting challenges of unification. On both sides, the comparison sheds light on China as it achieves some of the world's highest growth rates and indeed works to sustain political unity. Thus, it should be no surprise that China's leaders work to reduce income diversity and increase political cohesion, even while their capacities for growth are constrained by collapsed global demand.

This chapter argues that austere times presented opportunities to reassess strategic concepts, think rigorously about goals, recalibrate priorities, and link means and ends. Constraints on defense spending forced policymakers to think more creatively about diplomatic solutions. This sometimes catalyzed bold initiatives to reassure friends and engage adversaries. In the past, budgetary austerity also forced officials to wrestle more forthrightly with the trade-offs between priorities at home and commitments abroad. It was an exercise that invariably reminded all Americans that the real sources of U.S. strength in the world were the health of its domestic economy, the vitality of its people, and the resilience of its political institutions.

Comparison of the four countries shows that internationalized statism has developed in the UK, France, and Germany in ways that appear surprising given both popular and academic writings, although there are important cross-national differences in its forms. The US has seen the lowest level of internationalized statism, whereas the UK has pursued extensive and undirected internationalized statism. France and Germany occupy intermediate and more directed forms of internationalized statism. The findings cannot be fully explained by the Sovereign Wealth Funds’ (SWFs’) countries of origin and their choice of investments and also run counter to several expectations about the role of the state and general economic openness. Instead, the chapter offers a political and statist analysis of the growth of internationalized statism by looking within the state, notably at its structure, and the political strategies of policy makers. It also develops wider implications for political economy debates. The findings add to new statist arguments that the state is an active participant in internationalized and liberalized financial markets. Policy makers can use overseas state investors to pursue their domestic political strategies and adapt traditional forms of ‘industrial policies’. Internationalized statism shows that states can use developments in financial markets to find new resources and allies from overseas states to govern their domestic economies. By bringing in the state as an international investor, it shows how liberalization and internationalization can offer novel opportunities for states.

This chapter shows how the administration's handling of foreign policy was certain to be a central campaign issue as long as fifty-two U.S. embassy personnel remained hostages in Iran. President Carter had a second Achilles heel, however: the domestic economy. In announcing that he would mount a challenge for the Democratic nomination, Senator Edward Kennedy asked the faithful party why anyone would support the reelection of a Democrat who had brought the nation “three more years of Republican inflation, three more years of Republican interest rates, and three more years of Republican economics.” Over the next six months, the Massachusetts senator captured much of Carter's base, scooping up a third of the party's delegates in the primaries and, at the very end of his challenge, flatly ignoring the nominee, an incumbent president, standing inches away on the podium at their convention's closing ceremony.

This chapter by René Reeves focuses on aguardiente in nineteenth-century Guatemala to uncover the crucial, albeit hidden, role that women played in the economy and politics of the era. Aguardiente not only generated a large proportion of the revenues collected by the national treasury, but it also was critical to sugar growers and the domestic economy of innumerable Guatemalan households. Based on archival sources from western Quezaltenango, this chapter demonstrates that women were overwhelmingly present in the illegal facets of the aguardiente industry given their traditional importance as domestic petty commodity producers and vendors. With so many women depending on contraband aguardiente—they were referred to as clandestinistas—it was but a short step for them to intervene collectively in the local- and national-level conflicts that marked state efforts to formulate and enforce alcohol restrictions. Rural women struggled to use aguardiente to sustain themselves and their families, and in the process they connected their households to the nation by creating an exceptionally dynamic sector of the Guatemalan economy and contributing to the watershed political events of the nineteenth century.

This chapter discusses various events that happened in Louisiana from 1815 to 1820. At the same time, the White men in Louisiana were building a raucous state political system with an elaborate set of national political connections, and were also attempting to realize their goals in public policy. Some of their concerns were to connect the local to the national, to create rational systems of power, and to solidify the prerogatives of the local elite. Politics and administration had proceeded on overlapping trajectories. The chapter also discusses the Monroe administration in Washington and the Villeré administration in Louisiana that oversaw the final stages of administrative incorporation, a process which emerged through the relationship between federal and state governments.

Free zones have been common initiatives by many countries aiming at enhancing exports and economic growth. Dubai adopted a policy of encouraging the establishment of free zones on its territory to benefit from technology and managerial skills transfer, job creation, exports promotion, and foreign exchange earnings, and through the free zones forward and backward linkages with the domestic economy. Given the current economic significance of Dubai’s free zones in the emirate’s economy and their phenomenal expansion, assessing their linkages to the rest of the economy outside the free zone is an important policy issue. This chapter examines the evolution of free zones in Dubai and assesses their impacts through the backward linkages they create with the local economy. Based on evidence gleaned from the analysis the chapter draws some policy recommendations for further enhancing the economic linkages and the contribution of free zones to the overall economy of Dubai.

This introductory chapter discusses the topic of war finance and the significance of its study, arguing that military power stems from an economic base. Without wealth, soldiers cannot be paid, weapons cannot be procured, and food cannot be bought. States, however, do not act in a vacuum. They are constrained by domestic and international politics. Understanding how states finance war is essential to understanding the extent to which state capacity and leaders' preferences affect a state's ability to meet its foreign policy goals via military and economic power as well as its pursuit of domestic macroeconomic stability. In doing so the chapter lays out the groundwork for a discussion into the variations of war finance policies.

This chapter provides a comparative analysis of Chinese and Russian economic interests in Central Asia. Russian economic interests in Central Asia mainly work under the assumption that strengthening economic ties with Central Asia will lead to Eurasian economic integration or Eurasian Alliance with the region, and promote the development of the Russian economy. In contrast, China's economic interests in Central Asia are aimed at facilitating economic development of both sides through bilateral trade and investment with the region. Moreover, Central Asia's prosperity and stability can not only maintain the safety of Xinjiang Province and even the western region of China, but also provide a secure external barrier for China to resist traditional security threats.

This epilogue presents a discussion of the concept of home cooking. “Home cooking” is a comprehensive knowledge of what people eat. The techniques of preservation are rooted in home cooking, having originated in a domestic economy that was intended to provide a reassuring and durable larder for the needs of the family during the hard times. Home cooking is also defined by its connection to feelings. Foods of the domestic tradition have a taste, and an aftertaste, that can revive scents and dissents associated with personal relations, private occasions, collective holidays, and common rituals. Without this, people can have home recipes, but not home cooking.

This chapter looks at the responses of three countries to the encouragement of health systems to engage in global markets, and moves beyond how competition is embedded in the welfare state to consider how the welfare state is embedded in competition. The three countries — the UK, Turkey, and South Korea — face similar healthcare pressures but have different private/public healthcare mixes and have developed distinct responses to the increasing private treatment of patients and the wider export of health services. In implementing health export programmes, all three countries have sought to emphasise specific system characteristics and strategies that reflect their particular historical and institutional differences. Indeed, trade in health services is considered a highly desirable export allowing countries to promote the virtues of their health systems — technology, quality, and reputation. The perceived benefits for domestic economies are the ability to generate revenue and secure wider trickle-down effects, as well as the growing influence that a nation derives from exporting such services.

Drawing this book to a close, this concluding chapter returns to the core theoretical and empirical claims made in the opening chapter and throughout the book. It summarises those policies that Gordon Brown transposed from New Labour’s domestic political economy to meet his undoubted concern for international development, and the analysis offered in respect of each of these policies. The significance of this policy transmission from the domestic to the international spheres is explored, and the critical tensions inherent in such a strategy, are teased out. Gordon Brown was clearly passionate about matters of global poverty (and indeed, even out of office, remains so). Yet in his zeal to deliver lasting change in some of the world’s poorest areas, Brown attempted to address global poverty by explicitly working with and indeed enhancing the self-same structures of market capitalism that had reinforced and reproduced the levels of inequality and underdevelopment experienced across the global South. Gordon Brown’s development strategy therefore did not simply assimilate ‘market’ actors in the development process but more often than not, ended up prioritising the expectations of these actors over the delivery of a more socially just and equitable set of outcomes.

This chapter finds that Japan has been unable to emerge as a global leader despite being backed by significant economic prosperity and military strength, but has been able to use its external environment to highlight its national interests. Japan has successfully accessed foreign raw materials and supplied its products in international markets despite being unable to influence international global institutions and systems, and has also attracted investments into the domestic economy, and maintains cordial relationships with other countries, including the United States. It has satisfied its own needs by following the policy of limited international agenda and non-interference in the matters of others.