ABSTRACT
The conventional theory of international politics compares the rivalry among states to the competition of firms in an industry. The two disciplines of microeconomics and international politics are seen as operating according to similar principles. The theory of international trade offers reasons for nation-states to specialize in the production of goods and services internationally according to their respective comparative advantages. The conventional view holds that the theory of the firm is the theoretical starting point for the theory of the state acting in international politics. Mobile factors of production can leave an economy as well as enter it if the environment is not a hospitable one. If flows are as or more important than stocks, therefore, it is often unclear which nations are winning and which losing. Jan Tinbergen stressed that policy instruments have to be sufficiently numerous and varied to attain requisite policy goals.
