Geopolitics, National Sovereignty and Trade Policy in Historical Perspective

Elise Brezis

MPRA Paper from University Library of Munich, Germany

Abstract: The historical record of the past 350 years reveals recurrent cycles in the international distribution of power: periods of hegemonic leadership, in which a dominant state shapes the international order, alternate with periods of balance-of-power rivalry, when no single state is preeminent and major powers compete on more equal terms. Trade policy also follows a cyclical pattern, with phases of liberalization giving way to periods of protectionism. This paper examines the relationship between these two cycles, and analyzes how the international power structure changes the optimal trade regime.. It argues that hegemonic periods, such as 1870–1910 and 1945–2015, are more conducive to free trade, because the hegemon provides security guarantees, access to markets, and institutional linkages that reduce the risks of liberalization and increase the benefits of openness. By contrast, during balance-of-power periods, such as 1910–1945 and the period since 2015, intensified rivalry among great powers strengthens nationalism, heightens concerns over sovereignty, and encourages protectionist policies. The paper proposes an explanation for this correlation grounded in theories of national identity and sovereignty. More broadly, it shows that shifts in the structure of the international system affect not only interstate relations but also domestic policy choices. The empirical analysis supports this argument: hegemonic eras are associated with waves of trade liberalization, whereas balance-of-power eras are linked to higher tariffs and a stronger turn toward protectionism.

Keywords: Balance of Power; Geopolitics; Hegemony; National Sovereignty; Trade Policy; Free Trade; Protectionism; Social Identity. (search for similar items in EconPapers)
JEL-codes: F40 F42 F52 N4 Z13 (search for similar items in EconPapers)
Date: 2026-04-28
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