This course is about public policy and the financial crisis asking how and why did we get into this crisis and how do we get out of it? It is also a political science class, that seeks to analyze and provide theoretically-founded explanations for the policy phenomena discussed that go beyond newspaper commentary.
As a political economy survey course it addresses the relationship between the state and the market - do states rule or serve markets? Following a “great books” approach, this includes a survey of important works on the topic from economics, political science, sociology, and history. The conceptual frameworks explored in this course includes transaction costs, property rights, corporate governance systems, power relationships, social networks, and cultural norms.
Prerequisite:  200-level Political Science course – or instructor approval.

We will read Political Economy classics and ask what their authors would say about sources of and solutions to the crisis? What have states done, what can/should they do? Our reader contains very abridged versions – do read the original literature whenever relevant, interesting, and possible. The syllabus includes many great reads (personal favorites: Polanyi, Hirschman, Strange, …).
Additionally, we will rely on articles and excerpts from a number of books as reading materials for this course. Most of the readings will be posted online as PDF documents and readings will be added throughout the semester. You need the free Acrobat Reader to read these files. If you do not have this software yet, you can download it from: All readings are mandatory – none of the readings on this syllabus are optional.
You are also expected to follow current developments in the financial crisis. Given the lack of substantial reporting in most U.S. broadcast media you should regularly read an international newspaper. I recommend the International Herald Tribune and Financial Times as good sources of information. NPR’s “This American Life” and “Planet Money” are also excellent and accessible sources.

•    Informed class participation (attendance is necessary but not sufficient!) – 30%
•    Solution paper to the financial crisis – 40%
•    Reaction papers – 15%
•    Midterm exam – 15%

Class Participation
The Reed community is a community of scholars. We are all here, because we value the stimulating exchange of perspectives and ideas. This engagement is bi-directional: as much as we appreciate others’ perspectives, we also owe them our contributions – students and faculty alike. Meaningful exchange then requires not only mental and physical presence, but also thorough preparation, reflection, and engagement in conference discussions. This does not just mean “talking a great deal” – which in fact can distract from meaningful discussion – but rather the contribution of relevant insights, perspectives, and questions that can further our understanding of the concepts being discussed. It goes without saying, that such contributions are not possible without active participation in class discussions.

Solution Paper
Create own analysis of and solution to the financial crisis. Everyone will research one aspect, but these individual perspectives should add up to a group project. That means that you need to coordinate – domestic banking rules must dovetail with global initiatives, domestic securities regulations, etc.
Possible levels of analysis include
-    critical analysis of the basics of economic theory that produce the categories for analysis
-    normative analysis of the distribution of costs and benefits resulting from competing approaches
-    “mechanical” analysis of the adequacy of tools and procedures to achieve desired outcomes
Assessment will be determined primarily by the content of your paper; nevertheless you are expected to submit well-written work that has been thoroughly proof-read for grammar, punctuation, and style. Sloppy or poorly written work may result in a penalty. If you need assistance with the writing assignments, please contact the Writing Center ( If English is not your native language, find a native speaker to look over your assignments. Please follow the APSA style guide for political science (see for example: and or the more general Chicago “B” (author-date) style (see:

Reaction papers
In order to stimulate reflection on assigned readings prior to class you are expected to write very short (1-2 pages) weekly reaction papers on the assigned readings. These are due on Monday of each week. They are not meant to be summaries of the readings but rather reflections on or reactions to them. They could present a critique, link the text on outside reading you have done, put the reading into the context of particular events, policies, or theoretical perspectives, or detail a question/concern/difficulty that arose while reading the texts. The purpose is twofold: promote reflection on and active engagement with the texts and aid me in preparing conference. I will read all reflection papers and consider them important input to conference preparation. On occasion, I may comment and return them.


The exam will provide an opportunity for more substantial reflection on the basic concepts covered thus far and their relationships.

Office hours and location are as listed at the top of this syllabus. The best way to contact me is by email sent to schaper [AT]
Please make yourself familiar with Reed’s academic conduct policy ( There will be zero tolerance for plagiarism and cheating. Please note that the policy stipulates that you cannot submit work prepared for another course without prior approval from both instructors  – if you want to re-use research done in previous courses, discuss details with me before you start on the paper. If you are not sure about how to represent another person’s work in an assignment, contact me for advice before submitting.
Any student who feels s/he may need an accommodation based on the impact of a disability should contact me privately to discuss specific needs by the second week of the semester. Please contact Student Services to establish eligibility and to coordinate reasonable accommodations. For additional information please refer to:
If you are having any problems at anytime during the semester regarding this class or your ability to participate, please contact me as soon as possible.
This syllabus is subject to change. The most recent version can be found on Moodle.

Semeser Outline

Introduction to the course and its theme
Barma & Vogel: Introduction (1-18)
Special issue of Risk & Regulation on the current financial crisis
Eric Lipton and Raymond Hernandez (2008): A champion of Wall St. reaps the benefits, International Herald Tribune, December 13, 2008
Lairson, Thomas D. and David Skidmore (1997). International Political Economy: The Struggle for Power and Wealth. Fort Worth, Texas: Harcourt Brace Jovanovich College Publishers. Chapters 1-2.
Benjamin Cohen (2000). Money in a Globalized World. In Ngaire Woods (ed.). The Political Economy of Globalization. London: Macmillan.
Mark Landler  (2009). China responds tartly to U.S. on currency, International Herald Tribune, January 24, 2009.

The current financial crisis

Robert J. Shiller (2008). The subprime solution: how today's global financial crisis happened and what to do about it. Princeton, N. J.: Princeton University Press.
The Giant Pool of Money. This American Life podcast, May 9, 2008.
Another Frightening Show About the Economy. This American Life podcast, October 3, 2008
Paul J.J. Welfens (2008) The International Banking Crisis: Lessons and EU Reforms. Paper presented at the Global Jean Monnet Conference/ECSA-World Conference 2008 “A Europe of Achievements in a Changing World”, Brussels, November 24-25, 2008.

Task: Brainstorm on aspects of reform to pursue in your papers – individually and as a group. Prepare individual proposals and group suggestions for group discussion by next Thursday.

Library session
Paul Steinberg. Lecture on research and literature (on Moodle).
Marcus Schaper. Powerpoint on research strategies (on Moodle).
Janet Buttolph Johnson and H. T. Reynolds (2004): Political Science Research Methods, 5th Edition, CQ Press. Chapter 5. Conducting a Literature Review (on Moodle).
Lisa A. Baglione (2006). Writing a Research Paper in Political Science: A Practical Guide to Inquiry, Structure, and Methods. Belmont, CA: Thomson Higher Education, ch. 3: Adressing the Scholarly Debate: The Literature Review, p.31-58 (on Moodle).
John W. Cresswell (2003): Research Design - Qualitative, Quantitative, and Mixed Methods Approaches, Second Edition. Chapter 2: Review of the Literature, p. 27-48 (on Moodle).

Task: Outline group project; define your own contribution, conduct literature research, and prepare an annotated bibliography (due 2/18).

The other market - money and finance
Lawrence H. White (1999). The Theory of Monetary Institutions. Oxford: Blackwell. Chapters 1, 4-6

Looking at the crisis through multiple lenses

The Classics and the Liberal Paradigm

Reading: Barma & Vogel, chapters I.1-I.2
The Wealth of Nations Adam Smith
The Communist Manifesto Karl Marx and Friedrich Engels
The National System of Political Economy Friedrich List
The Road to Serfdom Friedrich Hayek
Capitalism and Freedom Milton Friedman

Economic Sociology and The New Institutional Economics
Barma & Vogel, chapters I.3-I.4.
The Great Transformation Karl Polanyi
The Architecture of Markets Neil Fligstein
Structure and Change in Economic History Douglass North
The Economic Institutions of Capitalism Oliver Williamson

Historical Perspectives
Barma & Vogel, chapter I.5.
The Stages of Economic Growth W.W. Rostow
Economic Backwardness in Historical Perspective Alexander Gerschenkron
The Wealth and Poverty of Nations David Landes.
From Exchange, Authority and Persuasion to the Privileged Position of Business
Albert O. Hirschman (1970). Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States. Cambridge, MA: Harvard University Press.
Fuchs, Doris, and Markus ML Lederer. 2007. The Power of Business. Business and Politics 9 (3):Article 1.
Barma & Vogel, chapter I.6.
The Market System Charles Lindblom

Comparative Politics and Political Economy
Reading: Barma & Vogel, chapter I.6.
MITI and the Japanese Miracle Chalmers Johnson.
Varieties of Capitalism Peter Hall and David Soskice.

Market Reform
Reading: Barma & Vogel, chapter II.1-II.2
The Virtues of Capitalism Arthur Seldon
Why Freer Markets Need More Rules Steven Vogel.
The End of Poverty Jeffrey Sachs
Globalization and its Discontents Joseph Stiglitz
China and Globalization Doug Guthrie.

Fuchs, Doris. 2005. Commanding Heights? The Strength and Fragility of Business Power in Global Politics. Millenium 33 (3):771-803.
Barma & Vogel, chapter II.4
The Lexus and the Olive Tree Thomas Friedman
How Revolutionary Was the Digital Revolution? Abraham Newman and John Zysman
The Retreat of the State Susan Strange
Global Political Economy Robert Gilpin

The financial crisis and its solutions

Banking crises
Andreas Busch (2009). Banking Regulation and Globalization. Oxford: Oxford University Press, chapters 1, 2, 7, 8. (on Moodle)
Rochet, Jean-Charles (2008). Why are there so many banking crises? The politics and policy of bank regulation. Princeton: Princeton University Press, chapter 1. (on Moodle)
Mark Landler (2008). China and U.S. bound themselves with linked addictions. International Herald Tribune, December 26, 2008.

Emerging market financial crises
Martin Wolf (2008). Fixing Global Finance. Baltimore: The Johns Hopkins University Press.
Leslie Elliott Armijo (2002). "The Terms of the Debate: What's Democracy Got to Do with It?," in Armijo, ed. Debating the Global Financial Architecture, Albany, NY: SUNY Press.

International Financial Standards
David Andrew Singer (2007). Regulating Capital: Setting Standards for the International Financial System. Cornell University Press.
Rainer Grote and Thilo Marauhn (eds.) (2006). The Regulation of International Financial Markets. Cambridge: Cambridge University Press