1.0 INTRODUCTION.

International of Political Economy is a field of study that combines both in which

between political and economy themselves in global affairs. It shows interplay between
states and markets that explain the occurrence of events in international level. However,
to understand world politics and economy cannot be applied only by one approach.
Differing approaches explains how people perceive the world. Furthermore, the process
of globalization takes place and this has continued from domestic level to international
level and cooperations among states and other international institutions.

International politics and economy had experienced a lot of transformations in

back then. Globalization played its role very well and therefore, it had brought the
existence of technology devices that lessen difficulties in dealing with other states in
order to undergo and fulfill demands and supplies across the borders. Technology
revolution gave so much impacts together with its causes and effects on states.1
Technology itself had caused wars and struggled for powers between states to pursue
the hagemony title. Before the period of World War II, Great Britain had the chance to
become the hagemony power. According to Thomas Oatley (2012:17) Britain was the
first hagemony that contributed much for the global economy. Britain was only the only
state that titled as the dominant economic power compared to other states at the
nineteenth century.2 During that particular time, Britain was moved further in
manufacturing sector that in return, helped them to sustain its power to regulate
activities of other states globally. Unfortunately, Britain could not sustain its power due
to the emergence of two nations which were Germany and United States.3 Britain failed
to rise back and uphold the hagemony because during the war with the European
nations, Britain had to get funded by an enormous source and that the United States
was the one which funded Britain’s war expenditures. At the same time, United States
took that advantage as a big opportunity to build up its capacity in the middle

1
Baylis, J, Smith, S. Owens, P. International Political Economy In An Age of Globalization in The
Globalization of World Politics. An Introduction To International Relations: 4 th Edition. 2008. United
States: Oxford University Press Inc., pg 244
2
Oatley, T. The Global Economy in Historical Context in International Political Economy Fifth Edition.
2012.Pearson Education, Inc. pg 17.
3
ibid., Germany and United States challenged the dominance of Britain due to struggle for power
through war between European nations.
 occurrence of war between European nations. European nations had experienced
massive damage and global economy at that moment was collapsed and Great
Depression occurred.
Great Depression existed was due to failure of reconstruction global economy
after the First World War. Therefore, the World War II resulted the existence of the
Bretton Woods system.4 The Bretton Woods system was introduced and to provide help
for global economy. In addition, another aids were also established to play its own role
in the global economy in international level in which WTO, the IMF and the World Bank.5
Same goes to Marshall Plan with the same objective in rebuild the global economy.6

4
Bretton Woods system was established in the year of 1944 after the great damaged due to the war
between European nations.
5
ibid., International Organisation were introduced to help to reconstruct the global economy in
international level to avoid the Great Depression from happening again.
6
Marshall Plan was considered as established initiative to also help the resurgence of Europe.
CONCLUSIONS

Global economy experienced a massive damage in result to World War II. With that,
United States became the major creditor to European nations to undergo reconstruction after
the fall. As we can see, the failure of international trade activities in the year of 1930 was a
lesson learnt to American and its allies to create an organization that operate in international
economy to encourage activity of trade. Therefore, it eventually resulted the Bretton Woods,
News Hampshire, before the war ended. At last, the Bretton Woods system became the final
word of agreement.

The Bretton Woods system dealt with the existence of International Monetary Fund
(IMF) to ensure the stability of the exchange rate and to strenghten the use of dollar and the
gold market. In addition, the role of World Bank solely to help in terms of both economic and
development.7 What is more, the United States with the hagemony power influenced the
existence of General Agreement on Tariff and Trade (GATT).8 This explains that United States
had major influence and to regulate all activities in international level by the hagemon power it
possessed.

United Nations as the main control of International Organisation is the result due to the
World War II. It has the role to ensure that no more war would occur. The emergence of
central planned economic institutions which comprise IMF, World Bank, and WTO are the
universal organization under United Nations; ensure the stability of global economy.
Intervention of all these international organisations explains that world really does need a
regulator in order to keep the global economy safe and to avoid the same crisis like Great
Depression and World War II that bring harm to the development economy in international
level. American involvement was the one that determined the global economy to operate
smoothly. In a nutshell, a world needs an entity to lead and control all the international activites
that must have a strong power in aspects of economy, military, and strong monetary system.
Therefore, America had to take the responsibility to become a hagemony power to replace the
hagemony of Great Britain; to avoid the mistake made by Great Britain.

7
The role of World Bank to help the reconstruction of global economy caused by the crisis of World War
II.
8
Agreement that included the negotiation to lessen the impose of tariff but only lasted until 1995. The
IMF takes place until today representing organisation of international trade.
REFERENCES

Oatley, T. 2012. International Political Economy. In The Global Economy in Historical Context in
Fifth Edition. Pearson Education, Inc.

Woods, N. 2008. The Globalization of World Politics An Introduction To International Relations

in Baylis, J. Smith, S. and Owens, P. (eds). International Political Economy In An Age of
Globalization. United States: Oxford University Press.