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firms in terms of leading sector technology is also critical to the vitality of the hegemon (Thompson
1988). Long Cycle Theory postulates that the economic growth and stability of the hegemon, particularly
in terms of its possession of leading sector industries, is the most stable form of international system.
The industrial dimension estimates the hegemon’s control over the production of goods and
services as a measure of its dominance in leading sector industries, its consumption of energy, and gross
domestic product (GDP). Maddison’s Monitoring the World Economy (1995) and the Penn World Tables
5.6 (1995) GDP data provide estimates for aggregate measures of economic performance for different time
spans in constant year dollars, in 1990 Gheary Khamis dollars, and in the 1985 Chain Index comparison,
respectively. Constant year dollars affords inter-temporal comparisons for states. The Penn World Tables
data lend an extra measure of validity to Maddison’s data. The NMC data provide economic data and
industrial energy consumption, converted into coal-ton equivalents.
Leading economic sectors are measured according to the Modelski and Thompson (1995)
designation: miles of railroad track from 1816 to 1850, sulphuric acid production from 1850 to 1914 and
motor vehicle production from 1914 to 1992 (Mitchell 1998a, 1998b, and 1998c). Indicators for leading-
sector industries not available in Mitchell are taken from the sources listed in Modelski and Thompson
(1995). Semiconductor production is measured from 1960 to1992 as the amount of sales (Malerba 1985;
Tyson and Yoffie 1993). Civilian jet airliner production is measured from 1960 to 1992 as the number of
new seats produced (Tyson 1992). Microprocessor production is measured from 1990 to 1992 as the
relative value of the markets (Modelski and Thompson 1995). Because the series designation ends in 1992,
Sacko (2003) supplements the list with high-technology patents. The U.S. Department of Commerce
(1998) has a specific report on the activity of patent grants in five designated innovative technology sectors.
((Leading Sector Mean Score + GDP Mean Score+ Energy Mean Score)/3)
Hegemon(t)
Finance Dimension
The finance dimension indicates a form of economic dominance that is less obvious than the
hegemonic advantage in economic production. Wallerstein (1981), Strange (1987), and Stephen Gill
(1989) propose that a third critical element to hegemony is the accumulation of financial power.
Dominance over finance and credit indicates an ability to acquire purchasing power without having to earn
it through trade or services. When the hegemon’s banks are responsible for a high proportion of total assets
in the industrial world, it has a decided advantage.
The financial dimension, Strange’s control over finance and credit, is a proxy for the hegemon’s
monetary influence and is a function of the hegemon’s level of domestic capital formation and banking
deposits. Gross domestic capital formation is the portion of GDP saved by firms for the purpose of
reinvestment, the estimated amount firms reinvest to build new plants and equipment for future production.
A basic requirement for the growth of output is the provision of plant and machinery, buildings and
infrastructure. This measure is an aggregate estimate. Obstfeld and Jones (1997) collect data for gross
capital formation, 1850-1945, while Mitchell (1998a, 1998b, 1998c) and International Financial Statistics
(1998) update the series through 1992.
Banking activity is divided into three categories and is obtained from the Mitchell series. Savings,
commercial, and post office banks are all recorded in millions of local currency. Banking deposits are the
total level of commercial and private assets deposited in banks.
(Banking Deposits Mean Score + Capital Formation Mean Score)/2)
Hegemon(t)
Knowledge Dimension
The knowledge dimension directly ties in the cultural attributes of hegemony. As discussed
previously, cultural factors constitute the most prominent dimension that until now has been omitted from
conceptions of hegemony (Russett 1985). Russett claims that United States control over outcomes has
transcended purely material forms of power. This lack of a material base, however, makes the task of
Convention