chapter  7
16 Pages

Economic statecraft

Economic statecraft is the attempt to influence foreign states and other agents in world politics by ‘relying primarily on resources which have a reasonable semblance of a market price in terms of money’.1 These resources may be used as rewards (promised or delivered) or punishments (threatened or car­ ried out); in short, they may be given, denied or taken away (see Box 7.1). When rewards are given openly and on a politically significant scale, we tend to speak of ‘foreign aid’. When punishments are meted out in the same way, whether by states in pursuit of their own interests or by international organ­ isations in defence of international norms, we now tend to speak of ‘economic sanctions’. (There is a view that the term ‘sanctions’ should still be reserved solely for punishments administered in the interests of defending interna­ tional standards, which certainly was its original connotation.)2 This chapter will consider the requirements of successful economic statecraft (‘the bases of economic power’) and the utility of its most controversial components: for­ eign aid and economic sanctions.