Economic Interests in International Regimes

Both Robert Keohane and Robert Gilpin acknowledged the significance of economic interests in the creation and functioning of international regimes, as well as employ aspects of economic theory in the analysis of regimes. Gilpin, however, generally addressed the question of regimes in broader terms than did Keohane. In this context, Keohane stated that "the liberal international arrangements for trade and international finance" could be interpreted "as responses to the need for policy coordination created by the fact of interdependence. These arrangements, which we will call 'international regimes,' contained rules, norms, principles and decision making procedures.1

Keohane's analysis was concerned primarily with the period stretching from the end of the Second World War to the mid1980s. Although he recognized the broad character of international relations during this period, he attributes the motivations of the central international actors during this period primarily to their competing economic interests. In this context, he stated that one "can view international political economy as the intersection of the substantive area studied by economics . . . with the process by which power is exercised that is central to politics. Whenever, in the economy, actors exert power over one another, the economy is political. This area of intersection can

1Robert O. Keohane, After Hegemony: Coo

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ement of 1944 created the IMF towards the end of the war. The institution became a reality in December 1945, when the thirtieth nation signed the Agreement. Actual financial operations were commenced by the IMF in early1947. The Bretton Woods Agreement charged the IMF with responsibilities to (1) encourage international monetary cooperation, (2) encourage the removal of foreign exchange restrictions, (3) stabilize of currency exchange rates, and (4) facilitate multilateral payments between member nations. Initially, member nations were required to adhere to an agreed exchange rate regime, in which fluctuations in foreign exchange values were to be confined within a range of + 1.0 percent of the par value of the currencies. The par values of currencies were stated in terms of the United States (US) dollar, which, in turn, was linked to a specified gold value. Thus, the mutually shared interests of the Western Allied Nations provided the basis for the creation of an international regime in the form of the IMF. This basis for the creation of the IMF is consistent with Keohane's contentions. Keohane himself, however, stated that through such a regime "U.S. leaders hoped t
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Approximate Word count = 3664
Approximate Pages = 15 (250 words per page)

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