19 April 2026, NIICE Commentary 12453
Susmita Aryal
For a hegemonic stability theory concept, it requires a stable and liberal international economic order, particularly a hegemon that provides a space for leadership and facilitates international cooperation. This being the core element of hegemonic ability for the hegemon, it exists in both theories of realism and liberalism that maintain open trade and stable monetary relations are possible.
Beyond just the concept of hegemon, it has also faced different criticisms on grounds of theory, history, and politics. Theoretical critics argue that cooperation among non-hegemonic states could also sustain a liberal international economy. But its history exists without proof and showcases that a liberal order is stable in the presence of a hegemon. Some of the scholars in the past tested this fact and tapped into the weaknesses, while others retaliated with the Soviet Union as an example that did not create a liberal international economic order. Many of them defended the hegemonic stability theory of justifying U.S. policies and predicting the inevitable decline of its power. Hegemonic theory supporters criticized the U.S. for selfish and irresponsible policies starting in the 1960s, rejecting claims that the theory defends U.S. actions.
A major source of misunderstanding comes from the fact that hegemonic theory was never fully developed as a scientific theory because it started as an idea from history i.e., that it applies to only hegemons and not to powers like the Soviet Union or Nazi Germany. In fact, the truth is that a hegemon is necessary but not enough alone to create a liberal international economy. Therefore, this theory is fully compatible with the theory of complex interdependence that rests on cooperation, not coercion. Where countries grow into more complex relationships, with no hierarchy of issues, economic issues are as important as military security.
Many economists trusted that hegemony meant coercion more than cooperation. They believed in market regulation. However, their beliefs have been falsified because Barry Eichengreen studied British (19th century) and U.S. (post-WWII) leadership, found out that both hegemons strongly influenced trade and monetary cooperation. Moreover, Barry found an optimistic connection between hegemony and trade liberalization. Multilateralization worked at its best outcomes when there was one hegemon ruling out the other, while the U.S. decline led to GATT problems and more bilateral or regional agreements. Reflecting from a Cartel theory, he explained that large cooperative systems need a dominant enforcer, and without a hegemon, cooperation is limited.
A series of economists supported hegemonic theory. Mundell said international monetary stability needs a dominant power, while Baldwin argued that U.S. hegemony boosted non-Communist countries’ welfare. While Frey noted public goods can’t be provided without a hegemon, Olson added the idea that domestic politics make trade liberalization hard, so a hegemon provides international public goods for its own interest. As U.S. power declined, protectionism rose, foreign aid fell, and regionalism grew.
Therefore, even though the theory of hegemonic stability invites clarity for its proof, historical evidence is strongly inclined to it. The theory may not be the best fit to understanding today’s complexity, however, it strongly provides a framework for power asymmetries that the world presently is in between China and the US. For instance, the present global order, particularly between USA and China’s rivalry growth illustrates the fact that in the absence of a clear, uncontested hegemon has contributed to increasing fragmentation trade and global governance reinforcing the continued concept of hegemonic relevance.
Another example is of the Middle East region, which in the absence of regional hegemon and enduring rivalries such as Iran and Israel contributes to persistent limitations to integrate the idea that stability and cooperation are harder to sustain without dominant leadership. This is evident in the increasing competitions in economic areas, technology and weakening of multilateral cooperation, all of which re-addresses the hegemonic theory and the need for leadership in maintaining an open plus stable way through in the international economic system.
Therefore, in understanding today’s world order, it’s imperative that we understand hegemonic theory as a broader set of frameworks and not just as a part of consequences that has its own limitations. Rather than being an obsolete model, it instead accounts for both power asymmetries and cooperative dynamics frameworks that shape today’s fragmented global world.
Susmita Aryal is an independent journalist and a published Author, currently pursuing a Master's in International Relations and Diplomacy at Tribhuvan University, Nepal.
