Hegemonic stability theory: an empirical assessment

to test alternative theoretical explanations. The basic contention of the hegemonic stability thesis is that the distribution of power among states is the primary determinant of the character of the international economic system. A hegemonic distribution of power, defined as one in which a single state has a predominance of power, is most conducive to the establishment of a stable, open international economic system.1 In the mid-1970s Charles Kindleberger, Robert Gilpin and Stephen Krasner presented similar descriptions and explanations for patterns of international economic relations since the nineteenth century.2 All viewed Britain in the late nineteenth century as a hegemon that provided stability and encouraged liberaliza tion in the international economy, and saw the United States as holding a similar status and performing similar functions in the first decades after the Second World War. All interpreted the instability and closure in international economic relations in the inter-war period as a result of the absence of a hegemon; Britain had lost the ability and willingness to act as a hegemon, while the United States was unwilling to assume the role of hegemonic leader. Finally, all three warned that the United States had lost its hegemonic status by the mid-1970s, and predicted the erosion of inter national economic liberalization and the emergence of greater instability. This paper is an attempt to assess the empirical validity of the hegemonic stability thesis as an explanation for trends in the international political economy since 1945. A decade and a half have passed since the initial statements of this thesis were first published. Many studies of the international political economy informed by (or written in reaction against) the hegemonic stability thesis have been published in the interim. We will draw on some of these, but this is not a literature review. It is a study of trends in the international political economy at a high level of aggregation. We examine first the power capabilities of the United States, and then look in some detail at developments in the areas of international trade and finance. With regard to the independent variable, power capabilities, the position of the United States weakened from 1945 until about 1970, but has stabilized since. In aggregate terms the capabilities of the United States remain formidable compared to any other state in the international system, and compared with Britain in the nine teenth century, although in some specific issue areas its position has clearly deteriorated.