Founder of Co-IRIS (International Relations and Islamic Studies Research Cohort) and PHISO (Philippine International Studies Organization). Editor of two international journals and three international book series. 2018-19 Chevening Oxford Centre for Islamic Studies fellow. Assistant Professor at the University of the Philippines Diliman.
Master in International Studies' Comprehensive Examinations
University of the Philippines-Diliman
August 10, 2009
Question number FIVE:
What is the Hegemonic Stability theory of International Political Economy? Discuss the contending views of the theory of Realism and Liberalism in regard to the role of the Hegemon in constructing international regimes toward its preferred kind of international cooperation? Illustrate the role of the hegemon in the formation of the present international monetary and trade regimes.
The Hegemonic Stability theory originated from the works of Charles Kendleberger, which stipulated that a hegemon will provide for the stability and order in the international system. Robert Gilpin insulated the significance and importance of the United States in leading for the creation of the Bretton Woods System that paved the way for International Bank for Reconstruction and Development (IBRD) which is now the World Bank (WB), the International Monetary Fund (IMF), and the General Agreement on Tariffs and Trade (GATT). He argued that when a hegemon is weak, its leadership in the regime will decline and will affect a change in the regime. That’s what happened with the disintegration of the Bretton Woods System when the influence and leadership of the U.S. declined because of its commitment in other world affairs or regimes.
Realists contend that international institutions, organizations, and regimes are just extension of state’s power and the reason why states cooperate in an arrangement is because it has interest on it. However, Neorealists argued that regimes can change and alter the behavior of states particularly maintaining the status-quo and the distribution of power in the regimes based on incentives and opportunities. If there was an alteration from the distribution of power based on state’s interest back up by incentives and opportunities, then in retrospect, a change in regime will occur.
Liberals contention on the role of international institutions, organizations, and regimes on states is a necessary one so as to validate the universality of ethical morality and rule of law in an international system. Woodrow Wilson’s 14 points have inspired for the creation of collective security through the League of Nations. Power struggle is evil and bad characterization of a state in international system which is especially based on rational principles of law, morality, and reason.
Robert Keohane and Joseph Nye (Power and Interdependence: World Politics in Transition) have clearly stated the role of a hegemon in the formation of the international monetary and trade regimes. With the floating liquidity in the balance-of-payments, the decline of standard rate of Gold, the unstable foreign exchange rates have led the U.S. to step-up to resolved the problems by leading the establishment of the Bretton Woods System in early 1940s which will regulate foreign exchange rates as the US Dollar, the sole prime indicator of all exchange rates in the world.
From the Bretton Woods System regime, emergence and establishment of IBRD, WB, IMF, GATT were transpired. WB giving loans to poor nations, IMF maintaining a stable foreign exchange rate system, and GATT to monitor (protectionist) policies of states in their economic activity and by reducing trade barriers among states.
The 1952 Geneva Convention on High Seas have restricted states to own the international waters, thereby, granting high seas as international waters (no states can subject it to its jurisdiction) through scientific and navigational purposes. It’s important to know the complex interdependence thesis which gave three significant types in the conduct and process of a regime: 1) multiple channels which connect societies (transnational actors like non-governmental organizations and Multinational Corporations were given importance in International Politics); 2) absence of hierarchy among issues (economics, culture, environmental issues constitute low politics is considered significant, if not, equal to high politics of military, diplomacy, and foreign policy); and 3) the minor role of military (it is not necessary to respond militarily or by force to issues like economics, cultural, environmental or religious crises/conflicts).