Social Sciences in China (Chinese Edition)

No. 9, 2022

The Roots of Great Power Competition: An Analysis Based on the Increasing Returns Mechanism

(Abstract)

Tian Ye

Geography, technology and the international system are the three important areas of great power competition. In the analysis of great power relations, both the theory of balance of power and the theory of hegemony rely on the assumption of diminishing returns, ignoring the possibility of increasing returns. Increasing returns play a wide range of roles in geographic patterns, technological evolution and institutional change, and the means of increasing returns in great power relations is accordingly reflected in competition among great powers in the areas of geopolitics, technology and international institutions. The rational expectation that an initial advantage will be transformed into a long-term one by increased returns drives the competition among the great powers, whether they are rivals or allies. As a specific means for increasing returns, coordination effects act on competition in geopolitics, technology and international institutions; in learning effects in technological and international institutional competition; and in adaptive expectations in competition in international institutions. Examples going from the British-Dutch competition for maritime hegemony in the 17th century to the current US-European competition in international investment arbitration demonstrate the logic of great power competition stemming from increasing returns.