hegemonic stability theory

Syllable breakdown

Dictionary meaning

a theory in international political economy arguing that a stable, open, liberal international economic order requires a single dominant state — a hegemon — willing and able to supply the public goods necessary for international economic cooperation, including a reserve currency, a lender of last resort, open markets, and enforcement of the rules of trade; Robert Gilpin and Charles Kindleberger developed the theory partly to explain the breakdown of the interwar international economy when Britain could no longer sustain hegemonic leadership and the United States refused to assume it; hegemonic stability theory implies that American hegemony after 1945 was the foundation of the liberal international economic order — the Bretton Woods institutions, the GATT, and the dollar-based monetary system — and that relative American decline would threaten that order; critics argue that the theory overestimates the necessity of a hegemon by underestimating the ability of states to cooperate through institutions even without hegemonic leadership, as Keohane argued in After Hegemony (1984)

Examples

• Hegemonic stability theory suggests that China's rise will destabilise the international economic order if it cannot or will not assume hegemonic responsibilities.
• Kindleberger applied hegemonic stability theory retrospectively to explain the Great Depression as a consequence of hegemonic transition.