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When market fundamentalism and industrial policy collide: the Tea Party and the US Export–Import Bank

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  • Kristen Hopewell

Abstract

For most major economies, state-backed export credit is a core element of industrial policy and their strategies to boost exports and economic growth. Surprisingly, however, at a time when its competitors are increasing their use of this policy tool, state-backed export credit has become the subject of a hotly contested political battle in the US. As a result of opposition from the Tea Party, the US Export–Import Bank was forced to halt its lending operations for five months in 2015 and subsequently limited to financing only the smallest transactions. In this article, I show that the disruption of export credit is undermining the competitiveness of key US industrial sectors and encouraging the movement of advanced, high-value-added manufacturing overseas. The case of export credit therefore presents an important puzzle: Why is the US moving in the opposite direction of other states and taking steps that undermine its economic interests? I argue that the internal US attack on export credit is fueled by the prevailing market fundamentalist ideology that has obscured the role of an active state in fostering the US's economic success. This article demonstrates how the rise of a powerful anti-state movement is hindering the ability of the US to conduct effective industrial policy and maintain its economic primacy in the face of growing global competitive pressures.

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  • Kristen Hopewell, 2017. "When market fundamentalism and industrial policy collide: the Tea Party and the US Export–Import Bank," Review of International Political Economy, Taylor & Francis Journals, vol. 24(4), pages 569-598, July.
  • Handle: RePEc:taf:rripxx:v:24:y:2017:i:4:p:569-598
    DOI: 10.1080/09692290.2017.1316297
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    References listed on IDEAS

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    1. Peter Nolan, 2012. "Is China Buying the World?," Challenge, Taylor & Francis Journals, vol. 55(2), pages 108-118.
    2. Joseph E. Stiglitz & Justin Yifu Lin (ed.), 2013. "The Industrial Policy Revolution I," International Economic Association Series, Palgrave Macmillan, number 978-1-137-33517-3, December.
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    Cited by:

    1. Natalya Naqvi & Anne Henow & Ha-Joon Chang, 2018. "Kicking away the financial ladder? German development banking under economic globalisation," Review of International Political Economy, Taylor & Francis Journals, vol. 25(5), pages 672-698, September.
    2. Muyang Chen, 2021. "China–Japan development finance competition and the revival of mercantilism," Development Policy Review, Overseas Development Institute, vol. 39(5), pages 811-828, September.

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