Hegemonic stability theory

Hegemonic Stability Theory is a theory related to IPE, developed by many political scientists including George Modelski, Robert Gilpin, Robert Keohane and Stephen Krasner. A hegemon is a state that has the capacity and the will to lead and overpower other states in the international system. Krasner defines two states to be the hegemons, especially when looked from an international political economy perspective: the British Empire until the beginning of the 20th century, and the United States onwards. Krasner uses a systemic approach to this theory, and his main hypothesis is that the presence of a hegemonic power in the international system creates incentives for other states to accept the openness of trade; thus, the world becomes more open and globalized in the presence of a hegemonic power. He gives examples of various international systems, and decides that there are two cases in which free trade would be beneficial: many small states with similar power (which reminds us of the Benelux states pioneering European construction/monetary integration) and the existence of a hegemon overpowering other smaller states.

He then goes to analyze this; in his article on "State Power and the Structure of International Trade." In this case, his dependent variable is economic openness, and his independent variables are the distribution of potential economic power; national income, per capita income, military power and geopolitical position. Krasner then moves on to test his theory for different periods, and then we see that this theory "fails;" although the theory is valid for 1820-1880 (the begininng of the era of first globalization), 1900-1914 (British hegemonic power falling) and 1945-1960 (post WWII era), it is not for the other periods tested. Thus, Krasner goes to amend this theory, time lagging the dependent variable; defending that it might take a while for the hegemon to realize the benefits of globalization and open trade.