Hegemonic Globalization” joint with Fernando Broner, Josefin Meyer y Christoph Trebesch

Abstract:

What is the relationship between hegemonic power and globalization? We develop a theoretical framework in which countries have heterogeneous preferences over political “actions”, such as the type of government (democracy vs. autocracy), industry standards, or regulation. Trade between any two countries increases in the similarity of their actions. The presence of a “hegemon,” i.e., a large economy, prompts alignment in actions and facilitates the transition to a globalized world. In contrast, the shift to a multipolar world may cause an unraveling of globalization, which may benefit some countries and harm others. We test the theory’s main prediction on a novel dataset on the near-universe of international treaties, 1800-2020. Our “Global Treaties Database” contains 6,000 multilateral and 68,000 bilateral agreements – a unique new resource for studying international coopera- tion. In line with the theory, we find that hegemons drive a disproportionate share of treaty-signing, that treaty-signing is significantly correlated with international trade, and that countries that sign treaties with a hegemon trade more, not just with the hegemon, but also with other countries that are aligned with the hegemon.