Stability in a Superpower-Dominated Global Economic System

Abstract

This paper provides an example of a system dynamics model that incorporates soft variables. The model examines the challenges that a superpower faces while maintaining its position in the global economic system. The effects on aggregate welfare of the population at home and abroad, as well as, issues of sustaining authority in the long run are explored through experimentation with a computer model. This theory is an extension of the framework developed by Saeed (1990), which was used to understand political instability and the failure of the government to stay committed to welfare agendas in the developing countries. The present model captures the interaction between several institutional actors involved with the economic and the governance systems. They include the public, the authoritarian regime, the reformist movements that seek change within the existing framework, and the dissident movements that turn to violent methods.

Keywords: Control, censure, violence, terrorism, insurgency, soft variables, system dynamics

JEL Classification: C61, D74, E61, O11