This paper discusses the importance of the theory of hegemonic stability in understanding the stability and instability in the international political economy. According to the theory of hegemonic stability, the role played by a hegemonic power is very importance in creating stability in international politics and economy. Without strong hegemon, the creation of international stability is impossible. The secondary data since early twentieth century was used in analysing the relationship between role of the hegemonic power and international stability. The study concludes that the hegemonic power was very importance in creating stability in international political economy. The political instability and economic depression in the decades before Second World War closely related with the absence of strong hegemonic power in the international system. Great Britain was very weak (during the period 1919-1939) and the United States refused to take the role as a new hegemonic power. The League of Nationswas not well function in the 1930s because of the lack of hegemonic power. The better and stable situation in international politics and economy after 1945 was strong influenced by the role played by the United States as a new hegemonic power. The international institution is impossible to run smoothly without strong support by a hegemonic power.
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