After Hegemony: Cooperation and Discord in the World Political Economy

Keohane refutes hegemonic stability theory, which held that international cooperation requires a single dominant power to enforce rules and provide public goods. He argues that states with complementary interests can sustain cooperation even after the hegemon declines, because international regimes—institutions, norms, and rules—reduce transaction costs and facilitate decentralized coordination . The empirical puzzle is the 1970s: American hegemony had eroded, yet cooperation in trade and monetary affairs persisted. Keohane's answer is that regimes create information, expectations, and stability that allow egoistic states to overcome collective action problems without a central enforcer.

Keohane defines international regimes as explicit or implicit norms, rules, and decision-making procedures around which actors' expectations converge in a given issue area . Crucially, regimes are not weak substitutes for world government. They do not enforce rules through coercion. Instead, they facilitate decentralized cooperation among egoistic actors by reducing uncertainty, creating information, and establishing patterns of reciprocity . The GATT and IMF are paradigmatic cases. Regimes persist because they lower the transaction costs of cooperation and create reputational stakes, not because a hegemon imposes them.

Keohane argues this distinction is foundational. Harmony is a situation where actors' policies automatically facilitate each other's goals without any adjustment—Adam Smith's invisible hand. In world politics, harmony is rare. Cooperation, by contrast, requires active policy coordination: actors adjust their behavior through negotiation and mutual adjustment to overcome actual or potential discord . Cooperation therefore presupposes conflict, not its absence. This definition allows Keohane to treat cooperation as a political achievement rather than a natural condition, and to analyze the institutional mechanisms that make it possible under anarchy.

Hegemonic stability theory, associated with Charles Kindleberger and Robert Gilpin, holds that open international economic orders require a single dominant power to provide public goods—stable money, open markets, lender-of-last-resort functions . Keohane accepts the theory's starting puzzle but rejects its conclusion. He shows empirically that cooperation persisted after American hegemony declined in the 1960s and 1970s . Theoretically, he argues that regimes can perform many of the functions hegemons once did, at lower cost. The hegemon may create regimes, but regimes can outlive the hegemon's dominance.

After Hegemony was published by Princeton University Press in 1984 . It became the founding text of neoliberal institutionalism, a research program that accepted realist assumptions—anarchy, state egoism, rational choice—but argued that institutions mitigate anarchy's effects . Keohane showed that rational self-interest could lead states to create and comply with institutions even without enforcement power. The book generated a sustained research agenda on regime theory, institutional design, and compliance, and it made Keohane one of the most cited scholars in international relations .

Realists argue that Keohane underestimates power and relative gains concerns. States may fear that cooperation benefits rivals more than themselves, making institutions fragile when power shifts. Critics also note that Keohane's case studies focus on advanced capitalist democracies, limiting generalizability to security or North-South relations. Some argue regimes reflect underlying power distributions rather than constrain them independently . Keohane's later work acknowledged these concerns but maintained that institutions have autonomous effects on state behavior, even if power remains a fundamental constraint on when cooperation is possible.