Monetary Blocs on the Periphery: Small State Choice or Great Power Hegemony?

Abstract

Over the past 40 years, enduring regional monetary institutions have been created in West and Central Africa, Southern Africa, the East Caribbean, and Western Europe. Short-lived or failed regional currencies can be found in East Africa, the post-Soviet successor states, Central America, and the Persian Gulf. Using the role of France in the franc zone as evidence, one common argument is that most regional efforts are merely by-products of hegemonic powers' ambitions and interests – imposed from above by great powers rather than chosen from below by newly independent states. By examining the overall pattern of regional currency institution-building during the Cold War and after, I show that the hegemonic argument is misleading. I also use archival evidence for an in-depth examination of Britain's influence on Southeast Asian cooperation during and after decolonisation. I find that extra-regional hegemons have played only a slight role outside the franc zone, and, even in the franc zone, French influence had its limits. Broadly comparing across all world regions – francophone Africa, anglophone Africa, Central America, the rouble zone, Southeast Asia, etc. – the common denominator is not hegemonic imposition, but small power choices.