Page 98 - Global Political Economy_Understanding The International Economic Order

INT ERNAT IONAL POLIT ICAL E CONOM Y
the major economic powers would replace declining American leader-
ship as the basis of the liberal international economic order. Thus,
the political purpose of regime theory was, at least in part, to reassure
Americans and others that a liberal international order would survive
America’s economic decline and the severe economic problems of the
1970s.
British scholar Susan Strange was the most outspoken critic of re-
18
gime theory. According to Strange, regime theory was at best a pass-
ing fad, and at worst a polemical device designed to legitimate Ameri-
ca’s continuing domination of the world economy. Strange and other
critics alleged that such international regimes as those governing trade
and monetary affairs had been economically, politically, and ideologi-
cally biased in America’s favor, and that these regimes were put in
place by American power, reflected American interests, and were not
(as American regime theorists have argued)politically and economi-
cally neutral. Strange charged that many of the fundamental problems
afflicting the world economy actually resulted from ill-conceived and
predatory American economic policies rather than simply being
symptoms of American economic decline.
Strange’s foremost example of American culpability was the huge
American demand in the 1980s and 1990s for international capital
to finance America’s federal budget and trade/payments deficit. 19
Through use of what she referred to as “structural power” (such as
America’s military, financial, and technological power), she alleged
that the United States continued to run the world economy during
that period and made a mess of it. Strange and other critics also al-
leged that the role of the dollar as the key international currency had
permitted the United States to behave irresponsibly. More generally,
Strange and other foreign critics charged that the American discipline
of international political economy, and regime theory in particular,
have been little more than efforts to defend America’s continuing de-
sire to reign economically and politically over the rest of the world.
Whether or not we accept these criticisms, they should remind us that
regimes and other social institutions are sometimes created to pre-
serve inequalities as well as to improve coordination and overcome

18
Susan Strange, “Cave! hic Dragones: A Critique of Regime Analysis,” in Stephen
D. Krasner, ed., International Regimes, 337–54. It is noteworthy that very few non-
American scholars have been positively inclined toward regime theory or involved in
its development. A major exception is Volker Rittberger, ed., Regime Theory and Inter-
national Relations (New York: Oxford University Press, 1993).
19
Susan Strange, Casino Capitalism (New York: Basil Blackwell, 1986); and Susan
Strange, Mad Money (Manchester, U.K.: Manchester University Press, 1998).
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