De Chavez, Arlene M.

International Political Economy (IPE)

BA Political Science 4A Prof. Ramse Osano Jr.

A. Reconcile the major difference between the classical mercantilist ideology and the principle/
theory of hegemonic stability.

1. Classical mercantilist promotes the government intervention and seeks to regulate the economy
and trade in order to promote domestic economies while hegemonic stability or neo-
mercantilism encourages exports and centralizes currency decisions in the hands of a central
government. Reconciliation of the difference between classical mercantilist and hegemonic
stability would be the creation and institutionalization of a world authority of global economies.

a.) A clear and good example of institutionalization was the creation and institutionalization of
the World Trade Organization (WTO) which focuses and ensured that trade flows are easily,
surely and free as possible.

b.) Another example was the creation of International Monetary Fund (IMF) in 1945, which
promotes the exchange stability and orderly exchange relations among its member states or
countries. They assists their members both industrial and developing countries to find
themselves in temporary balance of payment difficulties by providing short to medium term
credits.

2. Classical mercantilist believes that free trade is not necessary and trade must base on
protectionism or protectionist underpinnings, while hegemonic stability believes that free trade
is essential and must be controlled and centralizes by the government. Reconciliation with this
difference can follow through protectionism that the states need to specialized their goods.

a.) The World Trade Organization (WTO) main purpose and concern was to improve the welfare
of the citizens of the member countries.
b.) It will give more opportunity for the state to manage its essential resources without
scarcities and develop these to produce or create secondary products which other states
needed it to be able for them to develop themselves.

3. Classical mercantilist also believes that the proclamation of free trade can create conflict and
war while hegemonic stability believes that the proclamation was only for the dominant states
power would avoid conflict and war. This can be reconciled through international legal order on
economic aspects and phases.

a.) International organizations like for example WTO, they will issue and imposed trade
sanctions against violating states or countries.
 b.) The only solution and remedy of the conflicts and wars is through economic concerns, they
will focus on the needs of the states rather than engaging into war which is more expensive.

B. Is hegemonic stability the same as Imperialism?

1. Yes, hegemonic stability is the same as imperialism because they both use or posits
enforcement. Imperialism posits enforcement to other states by using power like military power
or military force while hegemonic stability use international order through enforcement of
balance stability on economic and political affairs.

a.) Military force can lead to abusive strategies from dominant states to control weaker
economies.
b.) Legal orders and principles of democracy are openly used by dominant states to hold
weaker states.

2. Imperialism provides a more manipulative and abusive system to a weaker states by using
military strategies while hegemonic stability provides commitment which is seemingly beneficial
to the other subordinate state.

a.) International organizations served as a provider of overall rules wherein it simplify the
expansion of hegemonic world.
b.)

3. Hegemonic Stability uses the capitalist approach to provide international orders to influence and
control the weaker states as clearly manifested in imperialism.

a.) Dominant states would not allow other states to gain with no benefit; therefore, they abuse
weak states with more natural resources to be able for them to gain more benefits.

b.) Dominant states which hold the world authority will be going to advocate an economic
system that will be give more opportunity for them to easily affect the states affairs.

C. Between the four principles (mercantilism, economic liberalism, neo-mercantilism and hegemonic
stability, and neoliberalism and international cooperation) which work best for the Philippines?

a.) I think the best approach or principles which work best for the Philippines would be
mercantilism principle because Philippines is abundant in natural resources and raw materials.
Philippines also have a large population that can provide a supply of labour and a market.