Introduction
According to the Hegemonic Stability Theory, a sovereign Hegemonic state is essential to form and uphold an international economic and monetary system. The main concern of HST is international trade policies. The single powerful state or the hegemon creates its system for its state’s favor and benefit. In other words, a stable international system requires a single leading hegemonic state to implement the guidelines of collaboration with other important fellows of the system. This hegemon will lead the international arena. However, other states have to accept the system because Hegemon provides public goods. In response to the acceptance, the hegemon provides incentives and beneficiary goods to cooperate. If the country reject or challenge their hegemon, its economy stops to grow and it suffer prohibitive loss. This discussion essay tends to analyze the Hegemonic Stability Theory (HST) concerning the Liberal and Realist perspective and its relevance to the international political economy.
Liberal Perspective
According to the liberal perspective of Hegemon Stability Theory, the international hegemonic state through its political power can overcome the issue of collective action costs. Furthermore, this hegemonic state can provide economic stability and international public goods in the form of open capital flows, free trade and provision of liquidity during vulnerable situations faced by other states. If the hegemonic states provide such public goods, they can achieve economic and political stability globally. The hegemonic state is viewed as a political actor which is influenced by various factors where the conflicting situation is solved with cooperation. The hegemon jeopardizes the international economy and blocks the challenging state to intervene in the economy. The global market should have open flows, and free trade to provide free interactions for other states to increase economic stability. The liberal perspective is immensely important for propagating the modern premises of Hegemon Stability Theory. The liberal perspective supports free trade and simplified capital flows. According to this perspective, the states can practice cooperation in international relations without hegemony. In the contemporary scenario, the concept of hegemony is declining but the states are functioning through cooperation without a hegemon.
Realist Perspective
The Hegemonic Stability theory revolves around the premise of realism. According to the realist perspective, the state is at the highest rank. The four basic interests of a state are to achieve social stability, political power, increased national income and economic prosperity. In the absence of a hegemonic state, the big states will always contest for increasing their economic growth. The large states intend to block access to the international market. This competition will instigate social instability for under-developed states and worsen their conditions. However, if the hegemonic state is present in the international arena, it will make sure that small under-developed states will have access to international export market. The hegemonic state will assure the availability of export opportunities for such unstable states. This will provide vast opportunities for such states to increase their national income, economic growth, and social stability.
HST and International Political Economy: Contemporary Issues
In modern society, a unipolar hegemonic state cannot function in the current circumstances of modernism. According to Kindle Berger’s view, a unipolar system cannot govern the international arena of political economy. The HST lies on the basic premises of realism approaches. However, the liberal perspective of the HST focuses on cooperation and improving the theory. A single hegemonic state cannot function properly to provide economic stability for all the states. Therefore, cooperation with other states is the key to success. Therefore, in the contemporary world, liberal perspective is the suitable foundation for a stable international political economy.
References
Kindleberger, C. P. (1986). International public goods without international government. The american economic review, 76(1), 1-13.
Krasner, S. D. (1976). State power and the structure of international trade. World politics: A quarterly journal of international relations, 317-347.
Lake, D. A. (1993). Leadership, hegemony, and the international economy: Naked emperor or tattered monarch with potential?. International Studies Quarterly, 37(4), 459-489.
Schilde, K. (2017). The political economy of European security. Cambridge University Press.
