The relationship between the international and domestic structures of the political economy of Britain, France, and Japan; and relative changes in their international trade

Curtis Edwin Peet, Purdue University

Abstract

Many scholars have claimed that the overwhelming relative economic and military power of the United States from 1945 to the early 1970s distinguished it as a hegemon, and was directly responsible for the growth of world trade. The relative decline in U.S. hegemony since the early 1970s led some scholars to predict a reduction in world trade. However, empirical tests of this theory have produced mixed results, leading to the conclusion that although U.S. hegemony is an important factor affecting world trade, there must be other equally or more important factors. This study improves on the emphasis of U.S. hegemony by integrating this systems level approach with factors relative to the international and domestic political economy of particular states. Three factors are examined affecting relative changes in the international trade of Britain, France, and Japan, from 1950 to 1989. These three factors are: U.S. economic hegemony; Britain, France, and Japan's relative international economic power; and Britain, France and Japan's, domestic regulatory capacity. These three factors are operationalized and employed as independent variables in an econometric time-series regression in which the relative trade of each country functions as the dependent variable. The results show that when the three countries are pooled, all three factors are highly significant. However, when each country is examined separately, different combinations of these three factors are significant. For Britain, U.S. economic hegemony and Britain's relative international economic power were the most important factors. For France, domestic regulatory capacity was most important. While Japan revealed that its relative international economic power and domestic regulatory capacity were the only significant factors accounting for changes in Japan's relative trade. These results show that the three factors used in this study supply a much fuller accounting for changes in the relative trade of Britain, France, and Japan than measures of U.S. hegemony alone. Furthermore, the results reveal a diversity among these three states concerning the most significant factors affecting changes in their relative trade. This study extends existing research on international trade by integrating international and domestic political factors at both the international and state levels in order to account for changes in international trade.

Degree

Ph.D.

Advisors

Shimko, Purdue University.

Subject Area

International law|International relations|Economics|Economic theory

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