A Modern Economic Statecraft Framework

Abstract

Amid developments in the practice of statecraft – fewer wars and more sanctions per capita since World War II – new technologies and more complex international economic connections have expanded the range economic statecraft tools and made evaluation more difficult. This paper contributes a modern economic statecraft framework to respond to the scarcity of approaches that balance the political focus of economic statecraft with its inner economic logic. Beginning with economic statecraft itself, I define it as states’ use of economic incentives to shape decisions that help advance its geopolitical interests. Where success is improving the perceived odds of moving towards desired geopolitical outcomes. I develop the concepts of resource flows and economic statecraft techniques to describe the means of economic statecraft: the carrots (sticks) that create or expand (destroy or reduce) flows of resources – goods, services, people, money, information, and ideas – between states. I draw these new concepts together with insights from economics and political science, which explain how economic incentives shape decisions, to form a modern economic statecraft framework relevant to scholars and policymakers.

Keywords: economic statecraft, economic security, geoeconomics, international political economy

JEL Classification: F50, F51, F60