POLITICAL ECONOMY

Legitimate Power in Political Leadership

Legitimate Power in Political Leadership

Legitimacy

The concept of "legitimacy" means recognizing the undeniable community foundation from officials limes (rulers) to exercise power functions. It is opposed to the illegal seizure of power, its usurpation. Implies confidence in the legitimacy of the authorities and the support of the rulers, ie, loyalty of the majority of members of the community, as in any society, there are always people who are in opposition to the rulers.

Central to the concept of "legitimacy" is a character key to the power relations of the dominion of the population (the people). If the population (people) accepts and appreciates the power, recognizes its right to govern, and agrees to submit to it, then such a power - legitimate. If it is not, and the people power is not "love" and the government does not trust, though it is subject from time to time as part of self-preservation (mainly because of the fear of mass repressions), this power is presented as illegitimate.

The assimilation of the question of legitimacy of state power requires knowledge of the content and sources not only the legitimacy of the three classical types - traditional, charismatic and rational-legal (Democratic) - and its types such as the ideological, technocratic, and others required to answer the question of whether the relation between legitimacy and efficiency (efficiency).

Emergence of IPE

The International Political Economy emerged of two events; the fall of Bretton Woods system and surge in oil prices and oil embargo by OPEC (Oil Producing and Exporting Countries). Post World War II USA is dominating majority of the countries in terms of development and trade policies. The introduction of Marshall Plan in Europe and Bretton Woods system for fixed exchange rates against the dollar. Fixed exchange rate policy lead to escalating inflation in USA after which President Nixon dissolved the fixed exchange by devaluing the dollar. In this way, the most important pillar of Bretton Woods System has fallen due to which US dominance over the world got shattered. In 1973 OPEC introduced and oil embargo by reducing the production of the oil each year by 5% in t order to attain the economic and political objectives. Oil prices soared to a record level (Ravenhill, pp. 18-22).

OPEC embargo clarified 3 dimensions before any policy making:

1. International policy will be bilateral considering the opinion of international countries.

2. Eastern and Western countries need to make harmony in order ensure smooth functioning of the economies by making favorable state policies.

3. Multi National Corporations should act as a separate entity and should not pursue the motives of the home governments. (Veseth, 2012, pp. 2).

These two events were the start were US lost control over the world and the transfer of power started between countries which resulted in Global Political economy. Decisions are based on mutual interests, and financial regulations are made on the basis of long term sustainability.

Financial Crisis and China's performance

The current economic meltdown has affected the whole world causing changes in authority in different financial markets all across ...