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HomeGeopolitical CompassThe AmericasIs COVID-19 the end of US hegemony? Public bads, leadership failures and...

Is COVID-19 the end of US hegemony? Public bads, leadership failures and monetary hegemony

Author: Carla Norrlöf

Affiliation: University of Toronto

Organization/Publisher: Oxford University Press

Date/Place: September 1, 2020/UK

Type of Literature: Journal Article

Number of Pages: 23 

Link: https://academic.oup.com/ia/article/96/5/1281/5901398

Keywords: COVID19, US Hegemony, International Governance, International Relations Theory, Liberal International Order

Brief:

COVID-19 appears to be a ‘liberal curse.’ The author graphed the case fatality rate against the Freedom House grouping of countries by free, partly free, and unfree. It appears that ‘free’ countries have on average higher case fatality rates than others. The author warns that the reason could be that liberal countries have better statistics, and therefore the data is skewed to punish more honest nations. This interpretation is odd given that it would also nullify all other human indicators where free countries perform better than unfree countries. Given the way the virus has affected liberal democracies, the author asks how the virus has impacted the liberal international order in terms of US leadership. The author argues that a key component of US global hegemony stems from its ability to be ‘lender of last resort’ or the world banker. US monetary policy and currency leadership places the US in a unique position to bail out foreign central banks and stabilize overseas asset markets. In the author’s opinion the US has ‘very clearly exercised effective monetary leadership’ during the pandemic. The Federal Reserve cut interest rates and handed out unprecedented currency swap agreements with allies. Currency swaps literally send dollars abroad while sending other currencies to the US. This allows foreign central banks to have direct access to dollars during a time when most people need dollars as a safe haven. The author concludes that as long as America remains in control of the world economy and keeps its place as world banker, any call for decline in US global hegemony remains premature. While the US has managed to hold on to its position globally, it did not fare well on all fronts. COVID-19 is unique in that it has diminished the US’s ability to secure domestic foundations for global hegemony. US global hegemony is secured at home by ensuring a pax-Americana whereby its citizens are free of existential threats and economically prosperous. The COVID-19 pandemic has proved to be a public bad that has challenged the American ability to secure its legitimacy by responding slowly to the crisis and then engaging in science denial instead of solving the problem. The author concludes that while the US has failed to show leadership during the crises, it is unlikely that others will replace its position in the short-term because possible candidates, such as China and Russia are also struggling with the crises at home. 


By: M. Üveys Han, CIGA Senior Research Associate

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