What are the levels of state power, and how are they differentiated?

The West's lasting advantage is financial. Deep US capital markets and the dollar's role as the world's liquidity backstop have no near-term substitute, and they pay for the military and institutional reach that sits on top of them. These foundations still keep the US at the top tier. But they depend on trust, and US policy unpredictability, unpaid UN dues and depleted military stocks are wearing them down. The result is a slow drift toward several centres of power, not a sudden fall.

• Military superiority is not an independent foundation: it depends on the economy and the dollar, so weakness in one spreads to the other.
• Rivals stated in a 2025 treaty that they aim for a multipolar order, but China has shown no willingness to take on the costs of leadership.

Countries outside the West have reasons to build their own capital markets. A dollar-centred system passes US policy shocks and inflation on to them, puts reserves at risk of being frozen, and leaves weaker currencies open to sudden capital flight. Deep markets come from trusted institutions, predictable law and openness to foreign capital, not from switching the currency trade is invoiced in. In practice this means building local-currency bond markets and linking regional payment systems, while keeping the dollar as a backstop rather than trying to replace it.

• The euro shows the route: a convertible currency backed by a legal union gained ground mainly through record debt issuance.
• A large economy alone is not enough. With capital controls in place, the renminbi holds about 2% of global reserves.
• The case is strongest for vulnerable economies: rand volatility hit a post-COVID high when the Middle East war began.

Crypto can help with the payments side but not with market depth. Regulated digital rails, such as linked fast-payment systems and possibly tokenised local bonds settled in central-bank digital money, can cut the cost of settling directly between currencies while the dollar stays the backstop. Private crypto, which today mostly means dollar stablecoins, tends to spread dollar use instead of building local markets, so the work that matters is still trusted institutions and law.

• The regional payment links working today run on conventional instant-payment systems, not blockchain.
• Washington may promote dollar stablecoins precisely because they reinforce the dollar.
• Linking CBDCs across BRICS has been proposed but is not in operation.

Four kinds of institution make local-currency bond markets trusted: (1) an independent central bank that keeps inflation predictable; (2) a credible debt office with transparent budgets and a regular schedule of bond sales; (3) independent courts and laws that enforce contracts, protect creditors and rule out arbitrary freezes or capital controls; (4) settlement and custody systems plus pension and insurance funds that create steady local demand. What these have in common is that they bind the government's own hands, and that is what makes lenders confident.

• AMRO says the dollar's standing weakens when US policies and institutions look unpredictable, so predictability is what local markets have to offer.
• Expert Opinions point to South Africa: an independent Reserve Bank held off collapse, but state capture still stalled growth, so a sound central bank alone is not enough.
• Legal protection against having reserves or holdings frozen is part of what makes a currency trusted, according to Expert Opinions.

The sources say capital concentrates mainly because of rules, not merit. Since the 1970s, tax, financial and labour policy has favoured returns to capital over wages, and public backstops leave losses with the public while gains stay private. In turn, concentration lets wealthy interests capture regulators and makes finance more prone to crises. It also pushes costs onto wage earners and, through the dollar, onto weaker economies.

• Bailouts that cover losses but not gains reward risk-taking by those already rich, which fed the build-up before 2008.
• Within the dollar system, US money creation spreads inflation abroad, so countries that hold dollars bear part of the cost.
• Concentration also has historical roots: in South Africa, the apartheid-era ownership pattern is still debated.

Neither voting nor paramilitary force is a separate tier of power. Where the army is united, elections usually confirm incumbents. Where armed forces split, the gun decides who holds the state, and an election later turns that outcome into legitimacy. Paramilitaries can rival a weak state, as the RSF does in Sudan, but they last only with outside patrons and resource money behind them. This places both below capital and foreign military reach.

• Mass protest won in Madagascar only when an armed unit sided with it, so popular participation needs a share of the force to prevail.
• Foreign forces such as Russia's Africa Corps now decide whether some governments survive, which hands power to their sponsors.
• Observers can record repression during elections but cannot reverse the result.