In 1987, Paul Kennedy predicted in his best-selling book, The Rise and Fall of the Great Powers, that the Pacific region, especially Japan and China, would rise in power, while the then Soviet Union, the United States and Europe would decline in power. Except for Russia, his predictions have not fared well. Why? His realist model of international politics ignored the role of national identities. National identities involve domestic institutions and policies that motivate citizens to create and use wealth and power. Nations compete through domestic reforms as well as international military and economic rivalries. Domestic changes in the United States and Europe revitalized American and European power, while delays in domestic reforms doomed Soviet/Russian power and dramatically slowed Japanese and Asian growth.