Essay --

Interactions in the global political economy always result in outcomes such that winners and losers are produced in each political activity. These outcomes vary from country to country depending on factors governing the country’s economic and political environment. Outcomes here range from monetary and trade policy outcomes to outcomes from crises. It is a widely accepted view that outcomes in the global political economy are, most of the time, a result of economic as well as political factors. One of the influential political factors is concerned with institutions. According to North (1991), institutions act as constraints that shape interactions between politics, economics, and society. Furthermore, political institutions are important in initiating rules about policymaking process, weighing preferences of different interest groups, and determining the extent to which interest groups affect policies (Hiscox, 2008). In terms of trade, demands for trade policies from special i nterest groups are converted into policy consequences that affect how people behave, which in turn determines the winners and losers. In view of regime formation, domestic institutions such as electoral and political systems and the distribution of governmental powers are said to have an influence on multilateral regimes through credibility (Cowhey, 1993). Apart from this, whether a country is likely to implement free trade policies or not also largely depends on the type of political systems that country has; democracy, autocracy, or monarchy. In this essay, I would like to focus on the importance of domestic institutions especially electoral systems, political systems, and veto players in producing the trade policy and crises outcomes in the global politica... ...ther the Democrat party can accumulate enough support to replace the government. If not, in order to end this cycle, there might be a need to reconsider the compatibility of democracy with Thailand’s political structure. As seen, institutions such as electoral systems and veto players are an important factor in determining outcomes in the global political economy both in terms of trade policies and crises. Regarding trade policies, having a democratic regime is likely to bring about economic growth through trade liberalisation. In reference to tackling crises, democracies and autocracies have equal chance of experiencing a crisis; however, a democratic country tends to recover faster because it is relatively easy for the population to replace the unsuccessful leader. Ultimately, strong and stable domestic institutions are the foundation of a country’s development.