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State Power and the Structure of International Trade

Published online by Cambridge University Press:  18 July 2011

Stephen D. Krasner
Affiliation:
University of California

Abstract

The structure of international trade, identified by the degree of openness for the movement of goods, can best be explained by a state-power theory of international political economy. This theory begins with the assumption that the nature of international economic movements is determined by states acting to maximize national goals. Four goals—aggregate national income, political power, social stability, and economic growth—can be systematically related to the degree of openness in the international trading system for states of different relative sizes and levels of development. This analysis leads to the conclusion that openness is most likely to exist when there is a hegemonic distribution of potential economic power. Time-series data on tariff levels, trade proportions, regional concentration, per capita income, national income, share of world trade, and share of world investment are then presented. The first three are used to describe the degree of openness in the trading system; the last four, the distribution of state power. The data suggest that the state-power theory should be amended to take into consideration domestic political constraints on state action.

Type
Research Article
Copyright
Copyright © Trustees of Princeton University 1976

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References

* I would like to thank Robert Art, Peter Gourevitch, Samuel Huntington, Robert Keohane, Rachel McCulloch, Joseph Nye, Ronald Rogowski, and Robert W. Tucker for their comments. My greatest intellectual debt, and one not adequately reflected in the footnotes, is to Robert Gilpin. Completion of this paper was made possible by support from the Washington Center of Foreign Policy Research of the Johns Hopkins School of Advanced International Studies and the Center for International Affairs at Harvard University.

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3 This notion is reflected in Hirschman, Albert O., National Power and the Structure of Foreign Trade (Berkeley: University of California Press 1945)Google Scholar; Tucker, Robert W., The New Isolationism: Threat or Promise? (Washington: Potomac Associates 1972)Google Scholar; and Waltz, Kenneth, “The Myth of Interdependence,” in Kindleberger, Charles P., ed., The International Corporation (Cambridge: MIT Press 1970), 205–23Google Scholar.

4 Hirschman (fn.3), 13–34.

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11 Kindelberger, Charles P., The World in Depression (Berkeley: University of California Press 1973), 171Google Scholar; Condliffe (fn. 9), 478–81.

12 Condlifle (fn. 9), 498; Gilpin, Robert, “The Politics of Transnational Economic Relations,” International Organization, xxv (Summer 1971), 407Google Scholar; Kindelberger (fn. 11), 132, 171.

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14 Figures are available in United Nations, Yearbook, of National Account Statistics, various years.

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18 Kindleberger (fn. 9), 41.

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20 Aron, Raymond, The Imperial Republic (Englewood Cliffs, N.J.: Prentice-Hall 1973), 191Google Scholar; Gilpin (fn. 12), 409–12; Calleo and Rowland (fn. 6), chap. 3.

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22 Triffin (fn. 19), 22–28; Rolfe and Burtle (fn. 19), 13–55; Yeager (fn. 19), 278–317; Kindleberger (fn. n), 270–71.

23 Kindleberger (fn. 11), 199–224; Yeager (fn. 19), 314; Condliffe (fn. 9), 499.

24 Triffin (fn. 19), 22.

25 Kindleberger (fn. 11), 296.

26 Condliffe (fn. 9), 494–97.

27 Evans (fn. 13), 7.

28 Gilpin, Robert, American Power and the Multinationals: The Political Economy of Foreign Investment (New York: Basic Books 1975), chap. 3Google Scholar; Kindleberger (fn. 11), 294.

29 Yeager (fn. 19), 279.

30 Condliffe (fn. 9), 347.

31 This draws from arguments made by Lowi, Theodore, particularly his “Four Systems of Policy, Politics and Choice,” Public Administration Review, XXXII (07-08 1972), 298310CrossRefGoogle Scholar. See also Schattschneider, E. E., Politics, Pressures and the Tariff: A Study of Free Enterprise in Pressure Politics as Shown in the 7929–7930 Revision of the Tariff (New York: Prentice-Hall 1935)Google Scholar.

32 See Kelly, Janet, “American Banks in London,” Ph.D. diss. (Johns Hopkins University 1975)Google Scholar, for a study of the overseas expansion of American banks in the postwar period.

33 Schattschneider (fn. 31), 288.

34 See Katzenstein, Peter J., “Transnational Relations and Domestic Structures: Foreign Economic Policies of Advanced Industrial States,” International Organization, XXX (Winter 1976)Google Scholar, for a suggestive discussion of the impact of the relative power of state and society on foreign economic policy. See also Huntington, Samuel P., “Paradigms of American Politics: Beyond the One, the Two, and the Many,” Political Science Quarterly, Vol. 89 (03 1974), 1617CrossRefGoogle Scholar, as we as Huntington, Political Order in Changing Societies (New Haven: Yale University Press 1968), chap. 2Google Scholar.

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