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CHA PTER F OUR
Robert Keohane has been the most influential scholar in the devel-
opment of regime theory. In his book, After Hegemony (1984), Keo-
hane set forth the definitive exposition and classic defense of regime
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theory. He argues that international regimes are a necessary feature
of the world economy and are required to facilitate efficient operation
of the international economy. Among the tasks performed by regimes
are reduction of uncertainty, minimization of transaction costs, and
prevention of market failures. International regimes are created by
self-centered states in order to further both individual and collective
interests. Even though a particular regime might be created because
of the pressures of a dominant power (or hegemon), Keohane argues
that an effective international regime takes on a life of its own over
time. Moreover, when states experience the success of an interna-
tional regime, they “learn” to change their own behavior and even to
redefine their national interests. Thus, according to Keohane’s analy-
sis, international regimes are necessary to preserve and stabilize the
international economy.
From its beginning, regime theory has been surrounded by intense
controversy. One major reason for the intensity of this debate is that
regime theory arose as a response to what Keohane labeled “the the-
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ory of hegemonic stability.” Proponents of the latter theory had ar-
gued that the postwar liberal international economy was based on the
economic and political leadership of the United States. Some theorists
had argued that the hegemonic stability theory also suggested that the
relative decline of American power due to the rise of new economic
powers and the slowing of American productivity growth in the early
1970s placed the continued existence of a liberal world economy in
jeopardy. As Steven Weber has pointed out, regime theory was largely
a response to the perceived decline of American power, the 1973 en-
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ergy price shock, and the global “stagflation” of the 1970s. Keohane
and others argued that international regimes and cooperation among
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Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Po-
litical Economy (Princeton: Princeton University Press, 1984).
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Robert O. Keohane, “The Theory of Hegemonic Stability and Changes in Interna-
tional Economic Regimes, 1967–1977,” in Ole Holsti et al., Change in the Interna-
tional System (Boulder, Colo.: Westview Press, 1980): 131–62.
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Steven Weber, “Institutions and Change” in Michael Doyle and John Ikenberry,
eds., New Thinking in International Relations (Boulder, Colo.: Westview Press, 1997).
The emphasis on regimes also grew out of the realization in the 1970s that interna-
tional governance was not codeterminous with international organizations. Consult
Friedrich Kratochwil and John Gerard Ruggie, “International Organization: A State of
the Art on an Art of the State,” International Organization 40, no. 4 (autumn 1986):
753–75.
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