Chapter 8 Economic statecraft (Week 9)

8.1 Discussion questions

  • Pape (1997): What is the main argument of the paper? Is it convincing? Why?

  • Farrell & Newman (2019): What is the main argument of the paper? Is it convincing? Why?

  • Are economic tools (foreign aid, sanctions, preferential trade and investment deals) effective in promoting development and respect for human rights? (*)

Sanctions having ‘devastating impact,’ says former Russian minister

International sanctions take toll on Russian economy | DW News

How the West Is Fueling Russia’s War on Ukraine | System Error

8.2 Are sanctions effective?

HSE (1985) notes that sanctions success rate is 36% (39 out 103 cases). In later editions of the book, the rate drops to 34%.

Pape (1997) argues this rate is still overestimated. Pape (1997, 93) argues that out of the 115 cases in HSE (1990), only 5 can be considered successes. That is, the success rate is only 4.3%. He further argues that the primary causal mechanism, i.e. the expectation that states can reshape others’ commitment by imposing economic costs, is also flawed. This is because:

  • Nationalism provides states/leaders with the willingness to endures costs
  • Alternative markets and substitution can help alleviate costs
  • Even if the two options are missing, states can still shift economic burden to opponents or disenfranchised groups

8.3 Weaponized interdependence

Let us begin with the main concept of interest.

  • “Asymmetric network structures create the potential for “weaponized interdependence,” in which some states are able to leverage interdependent relations to coerce others." (p. 45)

There are a couple of ideas to tease out. First, they argue that social networks tend to be asymmetric and highly unequal (at least over the short to medium term). This is the case because (1) preferential attachment (new nodes tend to attach to nodes that already have many ties); (2) network/efficiency effects (value of service increase with more users); (3) learning by doing effects (central nodes have access to more information and relationships).

Second, once a network becomes established, the structure of networks determines that it will be resistant to change (by individual actors) and be self-reinforcing (new nodes reinforce rather than undermine the existing inequality).

Third, these networks generate a unique source of power that travel beyond market power and bilateral dependence. Specifically, the distinct power consists of “panopticon” and “chokepoint” effects. The former effect gives the respective states informational advantage in understanding adversaries’ intentions and tactics, while the latter gives them coercive power.