15 Pages


The hallmark of economic statecraft appears to be its inconsistent results, as high-profile applications have yielded varying degrees of success. Consider the following cases. In December 2003, Libya, having for years endured an extended international economic sanctions regime, shocked the international community by agreeing to terminate its weapons of mass destruction programs and allow International Atomic Energy Agency inspectors into the country. Thirteen years earlier, Soviet leader Mikhail Gorbachev surprised many by acquiescing in German reunification, withdrawing Soviet troops from East Germany, and allowing a united Germany to join NATO, ostensibly in return for more than 15 billion deutsche marks in German aid and credits. In contrast, North Korean leaders have proven immune to the lure of massive foreign economic benefits. Despite ten years of incentive opportunities, the “hermit kingdom” has shown no meaningful inclination to give up its weapons of mass destruction, reduce its conventional forces, or make peace with the US.1 Similarly, 50 years of intense US sanctions did not have the slightest effect on Fidel Castro’s hold on power in Cuba or his willingness to compensate American companies that had their property nationalized after the 1959 revolution.2