Theory Of Hegemonic Stability

In 2013, the total production of goods and services globally was worth more than $74 trillion at current prices. Among these products, more than 30 per cent was sold across national borders through exporting and importing. This is the volume of the contemporary global economy. The study of international political economy has never been as important as it is now. In the past several years, nations are more closely linked than ever before through trade in goods and services, flow of money, distribution of wealth, and investment in each other's economies. The contemporary global economy was created by these linkages.

The economic crisis that began in 2007 threw up new challenges for the global economy. Therefore, both policy makers and business

The theory of hegemonic stability was started in the 1970s with the works of Charles Kindleberger. He focused on the reasons for Great Depression, a severe worldwide economic recession that took place during 1930s. He argued that the root cause of economic problems, which caused great trouble to Europe and many parts of the world in the 1920s and 1930s, was the absence of a benevolent hegemon.

The term ‘hegemon’ refers to a dominant state, which is willing and has the ability to take responsibility for smooth functioning of international economic system. It can be defined as, “A state that has the capacity and the will to lead and overpower other states in the international system.” For example, the USA has acted as a hegemon after the Second World War. By 1980s, its hegemonic power has declined.

Stephen Krasner defined two states to be the hegemons, especially when looked from the perspective of international political economy:

• The British Empire until the beginning of 20th

This problem, of course, is endemic in many areas of the social sciences. Some critics of the theory have tested it against late-nineteenth-century experience and found weaknesses in the theory.

There were political criticisms on the theory as a defence of or rationale for American policies to the opposite idea. No proponent of the theory has been motivated to justify American behaviour. On the contrary, most proponents were very critical of the self-centred and irresponsible behaviour of the USA that began in the 1960s. A major reason for the criticisms on the theory is that it was never adequately formulated. Since the theory was not developed properly, it was open to both warranted and unnecessary