Policy coordination in the international political economy: The politics of recycling petrodollars

Thesis/Dissertation · Sun Jan 01 00:00:00 EST 1989

OSTI ID:7014171

Spiro, D E

The thesis of this study is that as the relative power of a hegemonic state declines, the hegemon becomes more unilateral and exploitative of its dominant position in the international hierarchy of wealth and power. For policy coordination among a small group of advanced industrialized nations, hegemonic enforcement of cooperation is largely based on legitimate authority. As the hegemon declines, it becomes less legitimate. This makes post-hegemonic cooperation unlikely. This thesis was tested by examining how petrodollars were recycled. Data on credit, capital flows, investment, and trade show that market forces had little to do with recycling petrodollars. The primary mechanism was through US government obligations. Soon after the first oil shock, the US government convinced Saudi Arabia to invest much of its surplus capital in Treasury obligations that were held by the New York Federal Reserve Bank. In addition, US policy makers were able to convince the Saudis to keep oil priced in dollars. These and other policies gave the U.S. an economic advantage and violated the multilateralist norms of legitimate policy coordination.

• Research Organization: Princeton Univ., NJ (USA)
• OSTI ID: 7014171
• Resource Relation: Other Information: Thesis (Ph. D.)
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
29 ENERGY PLANNING
POLICY AND ECONOMY
ECONOMIC POLICY
OPEC
EMBARGOES
PROFITS
INVESTMENT
SAUDI ARABIA
INTERNATIONAL COOPERATION
OIL-IMPORTING COUNTRIES
ASIA
COOPERATION
GOVERNMENT POLICIES
INTERNATIONAL ORGANIZATIONS
OIL-EXPORTING COUNTRIES
020700* - Petroleum- Economics
Industrial
& Business Aspects
294002 - Energy Planning & Policy- Petroleum
290200 - Energy Planning & Policy- Economics & Sociology