fundamental to understanding not only the way these institutions work, but also why they
sometimes do not work so well.
Hegemonic Stability Theory
Derived from Realist theories of international relations, hegemonic stability theory posits
that: "only a hegemon has both the interests and the resources necessary to provide the collective
good of world economic stability." (Gowa 1984, 680). Hegemonic stability theory (HST),
however, can hardly be characterized as a uniform analytical approach. Theorists such as
Krasner, Gilpin, and Kindleberger hold different views as to the systemic primacy of hegemons'
analysis in international relations. They also hold different views as to the level of involvement
needed from a hegemon to maintain stability. However, as Gowa (1984) observes, "Despite their
differences, then, Kindleberger, Krasner, and Gilpin concur that world economic stability is
likely to deteriorate in the absence of a hegemonic power." (Ibid).
At one end, HST concurs that hegemons maintain economic stability (Kindleberger). On
the other extreme, theorists try to explain the relation between hegemons and the liberal
economic order (Krasner and Gilpin). Multinational financial institutions are a case of the latter.
Exploring the questions of whether there was/is a hegemon involved, whether it is needed, and
what is its function is essential for the analysis of the RDBs policies.
For example, table 4 presents the percentage of votes of the biggest shareholders in the
RDBs. It is clear that in most banks the US plays a substantial role. But despite some countries’
position of holding many shares, no one country in any of the RDBs holds a majority. One can
observe that the AfDB stands out as the only RDB in which regional countries are the largest
shareholders. However, the AfDB suffers from the most severe structural and functional
problems, almost to the point of its dissolution.
In sum, although it is clear that the RDBs were all created with the necessary support of
wealthy donors (hegemons), it is not entirely clear how central players continue to be involved in
the banks’ operations as emerging markets change alongside vast global political changes. Thus,
although a hegemon might be needed for the institution to exist and to survive, the daily
decisions and operations of international financial institutions are not necessarily determined by
the hegemon.
2
“For example, whereas Kindleberger tends to view the hegemon as motivated by cosmopolitan economic goals, I
believe that the United States has been motivated more by enlightened self-interest and security objectives.” (Gilpin
1987, p. 88).
4
Convention