Hege does not result in geopolitical favoritism or burden sharing – their evidence assumes bipolarity – trade agreements, regional economics, basing, and arms deals prove – that states’ immediate interests outweigh unipolarity
Drezner, 13 – Professor of International Politics at the Fletcher School of Law and Diplomacy at Tufts University (Daniel, “Military Primacy Doesn’t Pay (Nearly As Much As You Think),” International Security, Volume 38, Number 1, Summer 2013, pp. 52-79, MIT Press)//eek
There are some signiacant flaws to this supporting evidence, however. Most of the data that support a connection between security alliances and economic integration come from the Cold War era, not from the post–Cold War era of U.S. military predominance. Theoretically, a bipolar distribution of power is most likely to lead to coherent and segmented blocs of countries. Structural re- alists predict that under bipolarity, relative gains concerns between the two blocs should be relatively high, leading to a tighter integration between secu- rity and economic blocs.49 Statistical tests confirm that it was during the bipo- lar era of the Cold War that foreign economic policies seemed to most strictly follow the oag.50 Indeed, whereas the 1990–91 Gulf War happened during the waning days of bipolarity, the 2003 Iraq War occurred during a period of un- contested military primacy—and yet the United States secured far less burden- sharing during Operation Iraqi Freedom than during Operation Desert Storm. A glance at the global political economy of the pre-1914 period or post-1990 era suggests that the linkage between security and economic ties has been much weaker during these eras. In the nineteenth-century era of globalization, trade agreements, trade flows, migration flows, and capital flows bore little relationship to emerging alliance structures.51 Indeed, economic interdepen- dence was so strong among non-allies that it triggered security concerns among the great powers at the turn of the century.52 Most famously, Germany and the United Kingdom were each other’s largest trading partner imme- diately prior to the start of the World War I. The same pattern emerges in the post–Cold War global economy. During a period when the direct economic benefits from U.S. military primacy should have been at their greatest, China became the epicenter of the global supply chain and the largest foreign market for stalwart U.S. allies such as Japan, South Korea, and Taiwan. Furthermore, U.S. military primacy has not deterred China from dramatically expanding its commercial interests across the developing world over the past decade—nor has it deterred countries in the Paciac Rim, Latin America, Africa, or the Middle East from welcoming Chinese trade and investment.53 The assertions by U.S. policymakers that American military power has translated into tangible policy concessions on economic negotiations do not hold up to empirical scrutiny. If geopolitical favoritism mattered, then the free trade agreement between the United States and South Korea should contain terms that are appreciably more favorable to Washington than those contained in the South Korea–European Union free trade agreement, which was negoti- ated at the same time. Analyses of the two trade deals, however, do not reveal that result. Both agreements are comprehensive and contain roughly similar terms across a wide variety of sectors. While the United States did earn better terms in areas such as vegetable products and transportation, the European Union received better terms on automotive safety protocols, chemi- cals, machinery, and electronics.54 These differences are primarily a function of European and American priorities, not U.S. military leverage.55 Similarly, the claim that the United States has leveraged its security alliances into managing regional economic governance is unsubstantiated. Regional analysts agree that APEC has been the least important regional forum over the past fifteen years. During that time period, despite U.S. military primacy, most of the forward momentum in regional integration did not include the United States.56 The current state of U.S. basing fees and arms sales also clashes with the geopolitical favoritism hypothesis. If this argument holds, then Washington should earn a signiacant return on its overseas military bases. Furthermore, from its position of primacy, the United States should dominate the global arms trade. Neither assertion is empirically valid. Most assessments of U.S. basing expenditures conclude that the United States expends, at a minimum, tens of billions more than it receives annually from its forward military preence.57 As Kent Calder concludes in his review of U.S. overseas bases, al- though some countries do subsidize the presence of the U.S. military, “far more common are the cases where the United States pays nations to host bases, rather than getting paid to do so.”58 The post–Cold War trend in arms sales is just as telling. In the aftermath of the Soviet breakup, the United States con- trolled 60 percent of the global arms market. If geopolitical favoritism mat- tered, then U.S. arms producers should have maintained or increased that market share. Jonathan Caverley and Ethan Kapstein’s research reveals, how- ever, that the United States is now responsible for less than 30 percent of the global arms market—a 50 percent decline in U.S. market share. Furthermore, Caverley and Kapstein demonstrate that the United States government incor- porates geopolitical factors into its pricing of arms sales.59 During the era of military primacy, the United States has sacriaced economic rents for stronger political ties. This is an inversion of the geopolitical favoritism hypothesis. History also suggests the absence of a correlation between realpolitik con- cerns and the degree of cooperation among monetary authorities. In the years prior to World War I, for example, central banking authorities cooperated across Europe to avert systemic crises even as foreign ministers engaged in balancing behavior on the continent.60 As Barry Eichengreen observes, “In 1898 the Reichsbank and German commercial banks obtained assistance from the Bank of England and the Bank of France. In 1906 and 1907 the Bank of England, faced with another financial crisis, again obtained support from the Bank of France and the German Reichsbank. The Russian State Bank in turn shipped gold to Berlin to replenish the Reichsbank’s reserves.”61 All of this oc- curred despite the absence of a military hegemon on the European continent. Even with heightened concerns about geopolitical rivalries, central bankers continued to act to preserve the status quo in international monetary relations. Not until the 1911 Agadir crisis did this pattern of international monetary co- operation begin to break down; the Reichsbank, in particular, began to hoard specie in preparation for armed conoict.62 The same pattern emerges for monetary cooperation after the end of the Cold War. Cooperation among global central bankers during the acute phase of the financial crisis was strong.63 And although U.S. allies have helped to prop up the dollar as the world’s reserve currency, China has also played a pivotal role, albeit for self-interested reasons. After the 1998 Asian financial cri- sis, it began to buy dollars as a form of self-insurance against a financial panic. It subsequently purchased dollar-denominated debt as a means of keeping its export-led growth model aooat.64 Regardless of its reasons, China was not shy in purchasing dollars, helping to keep U.S. interest rates low despite rising budget deacits over the past decade.65 China also rejected summer 2008 over- tures from Moscow to exploit problems at Fannie Mae and Freddie Mac as a means to force U.S. action.66 If the United States’ biggest potential rival was en- gaged in the same kind of dollar-supporting role as close allies, then it sug- gests that U.S. bilateral security relationships did not play a causal role in preserving the dollar’s standing as the world reserve currency. Geopolitical favoritism has existed in world politics, but its effects have been more truncated than commonly posited. Geopolitical favoritism matters more during periods of bipolarity than it does under unipolarity. Military primacy does not in and of itself affect direct economic transfers to the hegemonic power. During periods of unipolarity, allies do not appear to have bestowed economic benefits on the militarily predominant actor any more than they have on its potential rivals.