On Economic Power in the 21st Century

In this paper, Daniel W. Drezner looks at changes in the distribution of economic power under the current world scenario. After analyzing the concept of economic power, its various facets and political consequences, he makes a clear distinction between structural power; relational power; the power to dissuade or avert pressure from others; and the power to compel others using instruments of economic diplomacy. These distinctions form the basis of an interesting analytical model, in which Drezner classifies economic power as autonomous, autocratic, hegemonic or market-based —four categories that are useful when attempting to gauge the magnitude of shifts in the distribution of global economic power and single out the actors that have the ability to either champion or obstruct world economic governance. In this context, perception as to who holds power and how it is distributed takes on even greater importance for, as Drezner points out, a misguided interpretation of reality grounded on false views could cause difficulties in the running of the global economy and paralyze the implementation of macroeconomic policies. If changes in the distribution of economic power are truly structural, he concludes, rising powers will have more leeway to act autonomously.