This chapter develops new measures of American economic and security hierarchy using a Bayesian latent measurement model. It discusses the challenges in measuring hierarchy and the advantages of the latent variable approach. The chapter details the construction of the measures, incorporating various indicators such as trade dependence, foreign aid, alliances, and troop deployments. It validates the measures by examining their relationship with key outcomes and comparing them to existing data. The new measures provide a foundation for testing the book’s arguments.

This chapter develops the book’s main theoretical argument, positing that American economic hierarchy has generally enhanced property rights and state capacity in partner states over the past forty years. It traces the shift in United States’ economic priorities toward property rights promotion in the 1980s, driven by foreign direct investors and exporting firms. The chapter explores the mechanisms linking property rights to state capacity and discusses the contrasting effects of American security hierarchy. It also considers alternative explanations and potential scope conditions.

This chapter statistically tests the relationship between American hierarchy, property rights, and state capacity using mediation analysis. It finds that American economic hierarchy enhances property rights in partner states, indirectly strengthening state capacity. The analysis explores scope conditions and the interaction between security and economic hierarchy, highlighting the contrasting effects on state-building. The chapter discusses the implications of the quantitative results for cases like Afghanistan.