Sample International Relations Paper on Differences between the political economy of Africa and Europe

Political economy refers to the study of production and trade and their relations with law,
custom and government; and with the distribution of national income and wealth. The economic
state of a nation is highly influenced by the political environment surrounding it. Africa has
always been referred to as a third world continent because of the many undeveloped and
developing nations. Most of their resources are untapped or under-utilized. On the other hand,
Europe is full of nations that are considered the first world and second world. This is because of
their industrial growth and high levels of development. The governments play a major role in
making economic decisions for their countries by setting and implementing policies that are
principal for a capitalist economy. While the political economies of Africa and Europe have a
couple of similarities, they also have many differences. This paper covers research from papers,
journals, and books that are cited from different authors that will cover the contrasts in the
characteristics and nature of these economies.
Role of the government in an economy. One major difference between the African
economy and the European economy is the government presence. African countries are highly
statist as compared to Europe. Policies to make African nations more liberal and industrialized
have been put in place but governments still dominate the economy. Policies are placed to ensure
growth and development and stability in a country. It is not uncommon to find a parastatal or
monopoly supplying a highly sought commodity like electricity and water in Africa. This limits
the growth of private companies as competition is high. The poverty levels in African countries

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is inevitable as only a few individuals’ benefits. “The state establishes a business, hires wage-
labor and extracts surplus value from its subjects.” This is a form of exploitation as the state is
the sole beneficiary.
Trading Unions. Although both continents have trading blocs with a common mission,
they continue to differ tremendously. The European Union was founded in 1951 with very few
countries and has undergone a series of changes that promote economic integration and trade
growth amongst countries in Europe. EU follows its policies diligently and was awarded the
Nobel Peace Prize for promoting peace and international cooperation in 2012. Inter-
governmental agreements form policies that allow ease of trade of maximization of resources
which in turn promote economic growth. Although Kenya and Tanzania are both in the same
trading bloc, they have recently disagreed on some of the tariffs and this has sparked a trade war
between the two countries. “Nairobi has hit back at Dar es Salaam by imposing new tariffs on
Tanzania products like flour after the neighboring country ignored a deal that granted Kenyan-
made chocolate, ice cream, biscuits, and sweets unrestricted entry into its market. This came
after Tanzania and Kenya failed to resolve the trade war sparked by the use of imported materials
in goods made in the countries, setting the stage for a fresh round of the trade war. African
countries tend to disagree and take their wars on a whole new level that dents their economic and
social integration. EAC common market allows free flow of locally made goods amongst the
East African countries but these agreements are more often than not been defied and twisted in
an individual country’s favor.
Political instability and terrorism. The political stability of African nations has always
been on turbulence as compared to the European nations. African nations have received blows on
their political state since they began obtaining independence. Also, the terror attacks have been

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quite rampant causing major destruction and loss of lives. “This is because all kinds of markets
hate uncertainty, and terrorism creates a lot of it. The financial markets literally shut down after
Sept. 11, and did not really recover until months after the 2003 invasion of Iraq.” Despite being
young and trying to develop, Africa also is its greatest enemy. There have been more than 50
attempted coups since the nations begun getting their independence. This disrupts development
and economic growth. Corruption and greedy leaders also contribute to the downfall of Africa’s
economy. Africa heavily depends on their former colonialists for funding of their development
projects, unlike Europe. This increases their National Debt. Embezzlement of government funds
by African leaders in a common occurrence in almost all their nations. The ineffective judicial
system usually creates loopholes so that the corrupt leaders can get away.
Despite the many differences, there some similarities in the political economies. Both
continents have diversified and specialized their economic activities and as a result, the
productivity rises. This, in turn, has increased the GDP per capita of the nations over the years.
Europe has been famed for its industrialization and is now partnering with African nations to
bring the same changes. In addition, the two continents are regulated by a central monetary
system thus promoting more interrelations and mutual cohesion.
Africa and Europe are two different continents and might as well be two different worlds. Europe
has developed over the years and has set a stable political economy while Africa is still finding
itself. The government is the foundation of a growing economic nation and its decisions impact
greatly. African governments could borrow from their colonialists a thing or two on how to grow
their economies. The sources have outlined some of the major differences between Africa and
Europe like political instability, and trade unions as listed above.

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Works Cited

Kaya, Hassan. (2001). The salient features of the political economy of Africa and continental
challenges in the new millenium. Colección, ISSN 1850-003X, Nº. 2, 2001 (Ejemplar dedicado
a: África Subsahariana), pages. 301-330.
“Sean Ross”. Top 5 ways how terrorism impacts in an economy.” Investopedia. 21 August.2016,
“Omondi George.” Kenya escalates Tanzania trade war with new tariffs.” Business Daily. 26
with-new-tariffs/ Accessed 14 December, 2018
“Political Economy.” Wikipedia., 31 October.2017,, Accessed 14 December, 2018