Hegemonic stability theory
Hegemonic stability theory draws its ideas from the realist, liberal and historical, together with the structuralists views. It is often regarded as a hybrid theory. It emphasizes that for an open and balanced international system to be met there should be a sole dominating or hegemonic nation, which has enough resources and can provide sufficient ruling over all other nations. It should also be enthusiastic t hunt policies that are required to create and uphold a laissez-faire financial order in the world.
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The hegemony state must stick to guidelines that are other major players consider to be beneficial. When establishing hegemony states there are various motives that the hegemony state is interested in pursuing. The hegemony state is concerned with promoting generalized benefits than self-gains.
They are mainly depending on rewards other than coercion to ensure cooperation from other states. The hegemony focuses on both general and personal repayment and may turn to the use of coercive ways to achieve its targets. Various realists support the existence of a hegemony state in the world. According to them, the existence of a hegemony state is key in the establishment of an open and balanced worldwide economy (Eichengreen 87).
The existence of a hegemony state started after the Second World War. The hegemony, America, has been putting great efforts f the preservation of the current global regimes. It cannot think that without their leadership international regimes are doomed. Robert Keohane analyses the importance of setting up an international regime or hegemony. He has written various books that address Hegemony. He appreciates the role that hegemony has played in the establishment of a regime. Despite their efforts, Keohane claims that a regime can be formed without the presence of hegemony. He claims that the assumption of hegemonic stability has two key propositions.
First, the order in world politics is established by one dominant power that means that the establishment of global regimes depends on the powerful nation. To uphold the international order requires the continued support of the hegemony and cooperation relies on the keeping of hegemony. According to Keohane’s thoughts, hegemony doesn’t need to exist to ensure the existence of the cooperation of states.
Implications for the international economy
The loss of hegemonic power does not necessarily imply a decline in international regimes. A Global regime becomes the main part of a power structure or has power structures that enable it to exist even when the hegemony is nonexistent. Through Keohane’s analysis of United States hegemony and worldwide regimes, this fact is confirmed. He emphasizes the need to set up international financial institutions that are keen on ensuring that there is the maintenance of the international economy. He puts it that even though hegemony plays a critical role in the establishment of these institutions there is no much contribution that it has in its survival.
Examining the role of hegemony in the stability of world economies is like analyzing the effect of United States control over the world’s political and economic controls. During the periods between the First and Second World Wars, the world was operating without hegemony. It is feared that the loss of hegemony might take the world to the state that it was before the Second World War period. It is, therefore, true that a decline in hegemony poses serious threats to the economy, security, and other structures that it controls.
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Eichengreen, Barry J. Hegemonic stability theory and economic analysis: reflections on financial instability and the need for an international lender of last resort. Berkeley, Calif.: University of California at Berkeley, Dept. of Economics, 1996. Print.