The Monetary and Financial Powers of States: Theory, Dataset, and Observations on the Trajectory of American Dominance

This project transforms international financial statistics into a form useful for global political analysis. The authors first theorise four distinct faces of a sovereign state's monetary and financial power resources: its international Creditor, Network, Currency, and Governance Capabilities. Each of these capabilities implies resources that incumbent political leaders potentially may employ to persuade, induce, or coerce others in pursuit of their larger foreign policy goals. They thus provide the means of international financial statecraft. The paper next summarises a new dataset, the Global Monetary and Financial Profiles of States (GMFPS), which creates measures for each of these concepts. Covering 180 countries from 1995–2013, the GMFPS dataset reports each state's annual shares of global totals for 25 indicators and 5 composites, each corresponding to a national financial characteristic that leaders may choose to manipulate politically – albeit not without paying some costs, economic and/or political. The paper concludes with an initial analysis of global trends, which tend to confirm the slow relative decline of the reigning financial hegemon, the United States. The data also provide suggestive evidence of a typical financial life-cycle for major states, although one that is voluntaristic, not inevitable.