National governments pursue international monetary policies for domestic political reasons having to do with the policy preferences of important social groups and coalitions. The policies of major states, however, influence the international monetary system. The existence of such externalities – which may be positive as well as negative – suggests that a stable international monetary order need not require implicit or explicit agreement among member states about the characteristics and requirements of membership. Nor is it necessary that such an order be "hegemonic." While stability does seem to require the existence of the equilibrating functions identified by Kindleberger, member states can have different objectives and divergent policy preferences if the international externalities of their national policy choices are strongly positive. Historical evidence from the classical gold standard (and more briefly, fromthe Bretton Woods system and the European Monetary System) is evaluated.
Working Paper 95–06, Weatherhead Center for International Affairs, Harvard University, 1995.