front cover of Birth of Hegemony
Birth of Hegemony
Crisis, Financial Revolution, and Emerging Global Networks
Andrew C. Sobel
University of Chicago Press, 2012
With American leadership facing increased competition from China and India, the question of how hegemons emerge—and are able to create conditions for lasting stability—is of utmost importance in international relations. The generally accepted wisdom is that liberal superpowers, with economies based on capitalist principles, are best able to develop systems conducive to the health of the global economy.
 
In Birth of Hegemony, Andrew C. Sobel draws attention to the critical role played by finance in the emergence of these liberal hegemons. He argues that a hegemon must have both the capacity and the willingness to bear a disproportionate share of the cost of providing key collective goods that are the basis of international cooperation and exchange. Through this, the hegemon helps maintain stability and limits the risk to productive international interactions. However, prudent planning can account for only part of a hegemon’s ability to provide public goods, while some of the necessary conditions must be developed simply through the processes of economic growth and political development. Sobel supports these claims by examining the economic trajectories that led to the successive leadership of the Netherlands, Britain, and the United States.
 
Stability in international affairs has long been a topic of great interest to our understanding of global politics, and Sobel’s nuanced and theoretically sophisticated account sets the stage for a consideration of recent developments affecting the United States.
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front cover of Domestic Choices, International Markets
Domestic Choices, International Markets
Dismantling National Barriers and Liberalizing Securities Markets
Andrew C. Sobel
University of Michigan Press, 1994
The internationalization of financial markets moved to center stage in the international political economy during the 1980s. These markets affect trade, investment, venture enterprises, growth, and competitiveness. Domestic Choices, International Markets uses the internationalization and liberalization of securities markets to examine interdependence, leadership, and the mechanisms of change in an increasingly global political economy.During the 1970s and 1980s, the United States began relaxing government oversight of the security markets, promoting price competition, lowering national barriers, dismantling barriers between individual sectors of the financial industry, encouraging innovation, and easing international capital flows. The United Kingdom and Japan soon adopted similar policies, thereby transforming markets in New York, London, and Tokyo. Yet during this time, the United States’ leadership in international finance was seen to be waning. Why did Japan and the United Kingdom follow the United States’ lead so completely and quickly?Most emphasize the interdependence of the world’s financial markets to explain this phenomenon. If this were the case, though, one would expect regulation and transaction costs to converge across markets by competitive deregulation. This has not happened. Significantly, the markets have remained overwhelmingly national with only a modest increase in international activity. In an alternate explanation, Andrew Sobel argues that opening up national doors was really a secondary consequence of policy competitions among sectors of the domestic financial services industry. Changes that occurred earlier in the United States served as examples and constrained the range of choices considered by policy makers in other nations. The author shows how information and reputation networks award disproportionate influence to U.S. actors and institutions. Thus U.S. leadership persists.
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