16. Dawes

Notes

16. Dawes Plan (1924) Part A – DefinitionThe Dawes Plan was an economic agreement introduced in 1924 to address the crisis of German reparations after World War I. It restructured Germany’s payments under the Treaty of Versailles by reducing annual sums and linking them to Germany’s economic capacity. The plan also arranged large loans from American banks to stabilize the German economy and restore currency stability. Part B – IR and Theoretical ImplicationsThe Dawes Plan highlights the interdependence of economics and international politics. Realists would stress that while it temporarily stabilized Europe, it was ultimately fragile because it left Germany dependent on U.S. loans, showing that power politics and national interest prevailed over genuine cooperation. Liberals, however, see it as an early example of economic cooperation fostering peace, since it integrated Germany back into the international system and reduced tensions with France and Britain. From a historical IR perspective, the Dawes Plan demonstrates both the promise and the limits of international economic governance in the 1920s: it bought short-term stability but revealed how global finance tied European secu...