The Oxford Handbook of Geoeconomics and Economic Statecra

(In Progress)
Vinod K. Aggarwal (ed.), Tai Ming Cheung (ed.)

https://doi.org/10.1093/oxfordhb/9780197673546.001.0001
Published: 22 February 2024 Online ISBN: 9780197673577 Print ISBN: 9780197673546

Downloaded from https://academic.oup.com/edited-volume/56064/chapter/474740263 by North Carolina State University Libraries user on 18 March 2025
Search in this book

CHAPTER

Thinking about Geoeconomics and Economic Statecraft 

Vinod K. Aggarwal, Tai Ming Cheung

https://doi.org/10.1093/oxfordhb/9780197673546.013.1
Published: 18 July 2024

Abstract
In the twenty- rst century, world affairs have become increasingly marked by the convergence of
economics, politics, technology, and strategic concerns. Economic and technological rivalries and
competition for military and strategic dominance are intensifying at the international, regional, and
domestic levels. This handbook explores these linkages through the evolving eld of geoeconomics and
economic statecraft, offering a comprehensive analysis of their conceptual underpinnings, historical
evolution, and contemporary implications across global regions and critical issue areas. This volume is
divided into ve sections. Section 1 elaborates on historical and current conceptions of geoeconomics and
economic statecraft, while Section 2 explores methodological approaches, emphasizing the importance of
multilevel analysis and innovative data collection. Section 3 focuses on key issue areas that are widely
considered to be central to the discipline including industrial policy, trade policy, and investment as well
as the use of sanctions and foreign aid as tools of economic statecraft. Section 4 examines the intersection
of national security and geoeconomics, illustrating how economic concerns in uence grand strategy, war
nancing, and sanctions. Finally, Section 5 surveys regional and national perspectives on geoeconomics
and economic statecraft. Together, these analyses provide a nuanced understanding of the strategic use of
economic tools in advancing national interests and shaping global order in an era de ned by both
increasing interdependence and deepening competition.

Keywords: geoeconomics, economic statecra , security, economics, technology

Subject: Political Economy, International Relations, Politics
Series: Oxford Handbooks
Collection: Oxford Handbooks Online
Introduction

One of the distinguishing hallmarks of world affairs in the twenty- rst century is the convergence between
economics, politics, technology, and strategic affairs. The great power competition between the United States
and China is as much about economic and technological rivalry as it is about the race for military and strategic
dominance. Russia’s war against Ukraine is not just being fought between armies on battle elds but is also

Downloaded from https://academic.oup.com/edited-volume/56064/chapter/474740263 by North Carolina State University Libraries user on 18 March 2025
being waged in the economic, trade, resource, and industrial spheres through economic sanctions, supply chain
disruptions, and industrial mobilization.
This intensifying and complex linkage between economics and security at the international level is also
happening at the domestic level, evident in the widespread use of industrial policy in new sectors deemed to be
critical to national security such as semiconductors and green energy, and in countries such as the United
States that traditionally eschewed such intervention. These policies have been seen not just as a traditional
bolstering of domestic industries but also as broadly safeguarding national security. First, in the case of
semiconductors, the United States has introduced the 2022 CHIPS and Science Act, aiming to revitalize
domestic semiconductor production through substantial investments and tax incentives. Similarly, the
European Union’s Digital Compass plan sets ambitious targets in its aim to produce 20 percent of the world’s
semiconductors by 2030.
Second, the United States and its allies have also increasingly sought to intervene in trade and investment in
semiconductors, with measures that include domestic export controls toward China implemented by the Biden
administration. In addition, since 2022, the United States, Japan, South Korea, and Taiwan (CHIPS 4) have been
in discussion about joint semiconductor development and have made efforts to block Chinese advanced
semiconductor development. More generally the United States and European countries are increasingly
reviewing foreign investments in their markets and in many cases blocking what they view as investments in
strategic industries.1 With respect to the regulation of new technologies with potential dual-use implications,
the European Union’s proposed arti cial intelligence (AI) policy, particularly encapsulated in its Arti cial
Intelligence Act, re ects a comprehensive and proactive approach to govern the development and application of
AI technologies.
This handbook provides comprehensive, critical, and contemporary coverage of issues at the intersection of
political economy and security studies. Long considered separate branches of political science, it has become
increasingly clear that economics and security are intertwined, as evidenced by recent global events. To explore
this intersection, this volume examines the state of the eld, where it has been in the recent past, and where it
is likely to go in future. In addition to examining the conceptual edges of geoeconomics and economic
statecraft, the volume provides detailed empirical analyses of both issues and regions by leading experts in the
eld.
In this volume, we employ the term “geoeconomics” as a systemic characterization in the vein of Kenneth
Waltz.2 In his work, Waltz emphasized the need to look at the constraining effects of the international system
on states, focusing in his analysis on geopolitics. Along these lines, we believe that the term geoeconomics
should be seen as a systemic-level characteristic. With respect to foreign policy, drawing again on Waltz, the
idea here is that the strategies of tactics of states can similarly be seen in the economic realm as “economic
statecraft.”3
The handbook is organized into six sections. Following this introduction, Section 1 of the volume, edited by
Will Norris, elaborates on historical and current conceptual perspectives on geoeconomics and economic
statecraft. Section 2, edited by Kun-Chin Lin and Victor Shih, focuses on the methods in geoeconomics
scholarship—from case studies to behavioral research. Section 3, edited by Tim Marple and Seung-Youn Oh,
examines issue areas widely considered to be central to the discipline; these include industrial policy, trade
policy, and investment as well as the use of sanctions and foreign aid as tools of economic statecraft. Section 4,
edited by Thomas G. Mahnken and Andrew Reddie, examines the intersection of national security policy and
geoeconomics. Finally, Section 5, edited by James Lee, surveys regional perspectives. We begin our discussion
with insights on the evolution of thinking about geoeconomics and economic statecraft, drawing on insights
from the work of the authors in each section.4

The Evolution of Thinking about Geopolitics and Economic Statecra

Downloaded from https://academic.oup.com/edited-volume/56064/chapter/474740263 by North Carolina State University Libraries user on 18 March 2025
The division of elds into economics and political science goes back more than a century. In an effort to create
tractable models of economics, economists chose, for the most part, to omit political variables in their analysis,
at both the domestic and international levels. At the global level, this led to a focus by political scientists on
international security, with little attention to international economics issues. Some scholars did focus on topics
such as the evolution of international organizations, and a well-developed eld that drew on the scholarly
study of international law was created by scholars such as David Mitrany,5 the father of functionalism. Further
evolution of thinking on this score came about with the work of Ernst Haas and Karl Deutsch,6 who sought to
explain regional integration, particularly in Europe. However, it was not until the 1970s, with the breakdown of
the Bretton Woods system and increasing trade con ict that the elds of international economics and politics
led to creation of the sub eld of international political economy.7
In particular, a well-developed analysis of international regimes came to the fore in the 1970s and 1980s. This
literature went beyond classical analyses of international organizations to look at more informal accords. The
classical de nition of international regimes, summarized by Stephen Krasner, is “sets of implicit or explicit
principles, norms, rules, and decision-making procedures around which actors’ expectations converge in a
given area of international relations.”8
In many ways international regimes provided a focal point where scholars from different traditions in
international relations (realists, neofunctionalists, and constructivists) could converge in analyzing
international relations from their respective traditions. This de nition, however, was not without its issues: as
a very broad de nition it allowed a variety of scholars to analyze a similar dependent variable, but its breadth
itself proved to be a source of confusion and debate. In Vinod Aggarwal’s work,9 international regimes were
more precisely de ned: meta-regimes were the principles and norms; and principles and rules were the
international regime.
Analysis of international regimes in international political economy became a key part of the literature in
international political economy. Over time, even security specialists became interested in international
institutions and analysis of international arms control regimes related to nuclear, chemical, and biological
weapons, landmines, and the like.10 But while international regimes provided a focal point, the elds of
international security and international political economy still remained largely separate.
In the early twenty- rst century, the rise of China and the subsequent response of the Trump administration to
engage with China through the manipulation of economic interdependence harks back to the literature on
asymmetrical interdependence as a source of power that had been developed by international political
economic scholars in the 1970s.11 We now see a growing effort to link economics and security in a more
systematic fashion from an analytical standpoint. Concepts such as geoeconomics, economic statecraft, and
other terms such as economic security have come to the fore.12 But clarity on these concepts remains
somewhat elusive with different scholars employing these terms in different ways.
To address this shortcoming, we brought together an international and diverse group of scholars to re ect on
the existing literature that underpins the eld as well as to look forward as to how best to study and understand
the geoeconomic challenges of the coming century as well as how economic statecraft is being used
instrumentally by governments to better serve their interests.
Moving the Field Forward

Section 1 of this volume, edited by Norris, clari es and ampli es the meaning of terms related to the
intersection of economics and security. Speci cally, this section lays out the intellectual foundations, historical,
and theoretical context for contemporary scholarship at the intersection of economics and security. By
examining the evolution of ideas, these chapters offer important insight into how the eld has arrived at

Downloaded from https://academic.oup.com/edited-volume/56064/chapter/474740263 by North Carolina State University Libraries user on 18 March 2025
contemporary understanding and intellectual approaches. Such perspectives also help shed light on current
gaps in the literature and point toward productive directions for future scholarship on these important topics.
Norris begins the section with an account of the intellectual evolution of economic statecraft, dividing the
interplay of the intellectual traditions in the literature in economics and security into seven related bodies of
scholarship. The resulting synthesis not only contextualizes the study of economic statecraft, but also
illuminates how various literatures connecting economics and security t together intellectually. Today’s work
on geoeconomics and economic statecraft stands on the shoulders of many earlier scholars (whose work has
often been siloed). Bringing those literatures together in a synthetic review highlights how these various
intellectual strands are connected and have developed over time.
Building on Norris’s historical analysis of key concepts at the intersection of security and economics, Lee
provides further clari cation and helpful distinctions between economic statecraft, geoeconomics, and the
political economy of defense. As he notes, the concept of geoeconomics has gained wide currency in the policy
community, but existing de nitions overlap considerably with the established scholarly elds of economic
statecraft and the political economy of national security. To show how geoeconomics can be distinguished
from existing terms in a way that is grounded in international relations theory, Lee argues that geoeconomics
should be a systemic concept along the lines of Waltz’s work.13 He then notes that economic statecraft as a
concept is akin to the study of foreign policy and goes on to specify the political economy of national security
as a concept based in the study of domestic institutions and resources. These distinctions draw on Waltz’s
levels of analysis and his distinction between systemic and unit-level theories, as well as Robert Putnam’s
concept of two-level games.14 They create a conceptual division of labor for the broad range of issues at the
intersection of international political economy and international security.
Matt Ferchen’s chapter asks how the recent renewed interest in economic statecraft might leverage some of the
insights from the proli c creativity of the 1970s international political economy scholars. By placing current
debates on geoeconomics and economic statecraft in historical context, he emphasizes the need to
acknowledge and bridge gaps in the study of international economics and politics. Ferchen also emphasizes the
continued, if changing, relevance of economic interdependence on international security and power relations
and concludes with an emphasis on the importance of state- rm relations for understanding the nexus of
international economics and state power.
Finally, Audrye Wong makes a compelling case in her chapter for focusing on domestic-level considerations of
both senders and target states when engaging more deeply on questions of economic statecraft. As she notes,
while economic statecraft is often conceived of as an element of grand strategy and a tool of geopolitical
competition, its implementation and outcomes are very much intertwined with and complicated by domestic
politics. To this end, she highlights the value of diverse intellectual sub elds that go below the level of the state,
including domestic and comparative political economy, in explaining how national governments approach
questions of economic statecraft and how economic statecraft may be used effectively (or not). Just as
bureaucracies and interest groups often play a role in trade policy or broader foreign policy, different patterns
of domestic coalitions and actors matter for how a sender state might think about using economic statecraft
and available tools and also for how a target country perceives and responds to such uses of economic
statecraft.
The works in this section of the handbook collectively provide a theoretical contextualization and frame of
reference for the contributions that follow in the rest of the volume. Several of these chapters also frame
theoretical approaches to economic statecraft and help delineate the contours of geoeconomics. Such efforts
are essential for establishing common understandings and laying the foundations for scholars to build
cumulative knowledge over time.

Downloaded from https://academic.oup.com/edited-volume/56064/chapter/474740263 by North Carolina State University Libraries user on 18 March 2025
Methods to Analyze Geoeconomics and Economic Statecra

Conceptualizing geoeconomics and economic statecraft and understanding the evolution of these concepts is
critical. But it is also important to examine the different approaches that scholars have employed to understand
these phenomena from an empirical standpoint. To that end, Section 2 of the volume, edited by Lin and Shih,
examines the range of approaches that have been used to study economic statecraft, from case studies to
behavioral research.
Researchers who are interested in geoeconomics and economic statecraft have generally approached their
analyses through interdisciplinary research and sought innovative ways to combine qualitative and
quantitative analyses. In examining empirical cases of speci c mechanisms, policy, and country and regional
studies of economic statecraft from different methodological perspectives, the contributors in Section 2
emphasize the need to theorize and empirically test the various mechanisms at work and seek to understand
the impact on the distribution of power and in uence at national, market, multilateral, and transnational
levels.
Four clear themes emerge from their collective analysis, pointing to the need to (1) engage multiple levels of
analysis and include actors besides national foreign and economic policymakers, enabling examination of
more complex structures and agency interactions; (2) analyze market dynamics more carefully, not only as an
aggregate and external reality, but also as speci c experiences that in uence strategic actors; (3) pay attention
to the discursive level, both as a rich data source revealing intentions and behaviors and as a formative process
for the projection of power; and (4) make creative use of varied data, not just to prove an argument, but also to
reveal the most relevant variables for a more sophisticated analysis of complex spatial relations. By contrast,
the traditional geoeconomics and geopolitics literature assumes xed boundaries contested by nation-states
seeking to expand territory or control the ow of individuals and resources across borders.
With respect to themes 1 and 2, this section challenges the state-centric approach of this convention by
expanding on different levels of analysis and the number of relevant strategic actors and the importance of
market actors. Shih and Geoffrey Hoffman concentrate on the actions, policies, and dynamics at the level of
nation-states. This level of analysis focuses on national-level capacities such as government scal resources,
military capabilities, and national demographic and economic trends. In addition, their chapter also calls for
analysis of subnational-level micro-factors, such as company cross-holdings, which can sum up to substantial
differences in national strength. Simon Evenett and Marc-Andreas Muendler’s analysis of trade diversion and
commodity price effects of the expanded 2022 sanctions on Russia point to the importance of transnational
market power as being determined by the global supply structure and substitution effects. Similarly, pointing
to the need for multiple levels of analysis in explaining the varieties of strategies of space powers, Namrata
Goswami iteratively considers interactive effects among great powers, middle powers, and unit-level
policymakers. Andrew Chubb further opens up the “black box” of the nation-state by surveying the attitudes of
consumers-cum-citizens, as the starting point for examining the potential impact on national policymakers
and on consumers-cum-citizens in other countries. Recentering analysis on the individual also provides a
micro-foundation to the potential feedback loops between national-level policies and individual perception
and actions. Lin’s chapter considers critical geographers’ emphasis on the policymakers and state and non-
state actors’ “representation” of boundaries and domains in shaping their perception and interests in acting on
the three-dimensional physical space.
This focus on the interplay of level of analysis and different types of actors also speaks to several promising
approaches to distinguish between geoeconomics and economic statecraft and relate them in an analytically
coherent and useful way. One approach is to see any given moment of the distribution of geoeconomic power as
the outcome (i.e. the dependent variable) of economic statecraft (i.e. mechanisms or independent variables) by

Downloaded from https://academic.oup.com/edited-volume/56064/chapter/474740263 by North Carolina State University Libraries user on 18 March 2025
state and market agents. In assessing the effectiveness of US and EU sanctions on Russia, for example, Evenett
and Muendler trace the cascading effects of producers and consumers reacting to exogenous shocks introduced
by con icts and trade sanctions. Their network dynamics expose the conventional focus on dyadic or bilateral-
level analysis as unduly con ning. Similarly, Goswami sees the unfolding of the global space market and
national competition as deriving from evolving notions of national security in space and policies and adaptive
strategies to achieve a niche for national rms. Lin examines the overlap between realist precepts and the
territorial focus of classical geopolitics, to which economic measures have been studied as an instrument for
achieving political ends. Drawing on piecemeal comparative studies, Chubb hypothesizes that the political
mobilization of Chinese consumers enables the Chinese party-state to take less risky actions or recoup
legitimacy in face of foreign policy impasse and military inactions, hence achieving internal balancing in an
unfavorable regional political climate.
One could also readily turn the causality between economic statecraft and geoeconomics around and argue that
the menu for economic statecraft is limited by a country’s position in global distribution of technology and
market power. Lin makes a strong case for geoeconomics as the general mapping of the spatial interactions
between structure and agents, whereas economic statecraft pertains to the use of speci c mechanisms that
alter the time and space factors affecting the ways and means of geopolitical strategies. Technological and
market changes in the late twentieth and early twenty- rst centuries have opened up the scope and options for
powerful states’ efforts to control resource ows and power relations, beyond connected borders and workings
of real economies. Starting the analysis at the geoeconomic level also facilitates structured comparisons over
time or across country cases.
Turning to the third theme of the importance of a discursive approach, Goswami shows how the emerging
global space domain has elevated new corporate and bureaucratic actors, who engage in new “securitization”
discourses that exploit their positions in the expanding community of space powers. She underlines the
interconnectedness of economic statecraft, innovation policies, and national security in shaping the global
system.
Finally, with respect to the fourth theme of more sophisticated use of data, the chapters point to current
limitations in the use of data and propose promising data collection and analytical efforts. The Shih and
Hoffman chapter points out that because the ultimate outcome of interest, relative power between countries, is
so multifaceted, analysts of this topic must leverage a host of traditional and newer “big” data sources for their
research. Key metrics include traditional metrics like productivity, rate of innovation, and balance of payments,
as well as newer measures derived from network and textual data to get at the international cross-holding of
assets and the quality of new capacities. Evenett and Muendler emphasize the lack of theoretical analysis
concerning the weaponization of trade and highlight the need for comprehensive assessments of the methods
governments use to weaponize trade. Their work draws mainly from traditional trade data but in a networked
manner that exposes the interlinkages and leverage countries have on one another.
For Shih and Hoffman and for Evenett and Muendler, well-established institutions such as national
governments or international institutions like the International Monetary Fund, are the sources of much of the
traditional economic data. National scienti c grants can nance the collection of big data, although
increasingly enterprising individuals with commercially available computers can “scrape” impressive data sets
for geoeconomic analysis.
Along the lines of the importance of new data collection, citing studies on the Chinese Belt and Road Initiative,
Lin maps out a spectrum of new spatial data ranging from transnational nancial linkages, transport routes,
digital architecture, foreign ownership of land and ports, and migration patterns. These new nodes and
networks of power projection have created uneven development and social movements that shape nation-
states’ attempts to demarcate and control strategic space. Chubb also offers examples of innovative surveys that
explore the intersection of citizens and consumers, who have initiated more or less spontaneous campaigns of
economic punishment against foreign targets, with or without the government’s active encouragement. With

Downloaded from https://academic.oup.com/edited-volume/56064/chapter/474740263 by North Carolina State University Libraries user on 18 March 2025
increasing dif culties in doing eldwork research in China, online survey methods are most welcome in our
toolkit to understand domestic constraints on economic statecraft.

Emerging Issues

Section 3 of the volume, edited by Marple and Oh, examines issue areas widely considered to be central to the
discipline. These include industrial policy, trade policy, and investment as well as the use of sanctions and
foreign aid as tools of economic statecraft—all issues at the at the crossroads of political economy and security
studies. Experts in trade, nance, and technology review existing research in both traditional and cutting-edge
areas of global decision-making to foster new dialogue on how geoeconomic theory and concepts can
revitalize and improve long-standing areas of research. Several chapters take a wide scope with respect to key
issues and examine how strategic decision-making can be better understood with attention to geoeconomic
causal forces.
Industrial policy is increasingly becoming a central issue, not only for the traditional developing countries, but
also for industrialized states such as the United States. Oh explores existing theoretical frameworks of vertical
industrial policy and examines their frequent failure to account for national security considerations. In an
expanded accounting, Oh proposes a fresh framework premised on “offensive” and “defensive” vertical
industrial policy and identi es contemporary issue areas in which it offers novel explanatory power. Her work
examines models of state intervention in domestic economies that are well-known to academics and
practitioners alike, but also reignite debates with original perspectives grounded in theory and the practice of
economic statecraft and competition.
Two chapters revisit traditional conceptions of nance and international aid, focusing on the critical role of
national security drivers. In analyzing the distinctive dynamics of China’s Belt and Road Initiative, Peter
Enderwick unpacks decades of literature addressing the origins and outcomes of global foreign direct
investment to identify noteworthy national security linkages of consequence in today’s global economy.
Attending directly to the growing role of regional powers and techno-nationalism, the chapter introduces new
avenues for research on foreign direct investment that align directly with the current global geoeconomic
power dynamics. Jonas Gamso takes a similar view on the changing dynamics of foreign aid, bringing to the
surface the latent national security and geoeconomic drivers that have historically in uenced international aid,
and particularly the role of international organizations. The chapter also presents a wide variety of new
research programs for applied scholars of international aid to consider in the context of the growing dynamics
of great power competition. In arriving at a unique set of conclusions for future work in their respective areas,
both Enderwick and Gamso deftly identify how seemingly simple issues take on new strategic importance
under an increasingly multipolar world characterized by regional leadership and great power struggles.
The nal two chapters in this section examine how novel and emerging technologies have fundamentally
shifted the strategic landscape in the realms of geoeconomics and interstate competition. Marple examines
how the introduction of digital currencies at the distributed, private, and sovereign levels has paradigmatically
shifted the incentive structures of central banks and broader governments. The chapter introduces both a
novel framework for understanding inter- and intra-state competition with a new technology of money and
identi es precise areas in which those incentive structures are liable to produce new or changed interstate
competition. Douglas Fuller conversely explores how the control of technology, particularly in the context of
export controls, has taken new form and intensity in a world of growing geoeconomic competition. Reviewing
the World War II history of technology export controls, the chapter examines how novel technologies both defy
and reiterate this strategic lever available to states pursuing geoeconomic cooperation and competition.
Despite respectively attending to the unintended proliferation and strategic controls of emerging technologies,
both Marple and Fuller simplify exceedingly complex technological issues to inform practitioners of growing

Downloaded from https://academic.oup.com/edited-volume/56064/chapter/474740263 by North Carolina State University Libraries user on 18 March 2025
strategic decision points, and to paint new lines of research for academics alike.
Taken together, the chapters examine the most pressing issues in today’s global economy and offer both
scholars and decision-makers ample new perspectives to better understand and study them. The chapters
share a uni ed conception of geoeconomics while arriving at impressively distinct conclusions in highly
diverse issue areas, drawing on a wealth of expertise and historical scholarship. Merging both substantive
expertise with innovative theoretical paradigms, the chapters provide comprehensive accountings that are
certain to improve policy-focused decision-making and to deepen important lines of scholarship for years to
come.

National Security and Geoeconomics

Section 4 of the volume, edited by Mahnken and Reddie, examines the intersection of national security policy
and geoeconomics. This section re ects on scholarship in both political and international relations theory—
noting that economic issues are often included in the foundational works in the eld.
The introductory chapter by Lee, Mahnken, and Reddie argues that theorists who have focused on grand
strategy in the industrial era, maritime and air power theorists, and scholars focused on competition have
placed the greatest weight on the role of geography and economy in their work.15 In subsequent chapters, the
section examines the varied intersections of economic and security concerns—from great power competition
to the role of non-state actors in this space.
Peter Dombrowski re-examines great power competition and revisits theory associated with “the varieties of
capitalism” to examine differences in geoeconomic competitiveness within the international security system,
in general, and in the relative capabilities of the United States, China, and Russia, in particular.16 He notes how
the structure of a state’s domestic politics conditions the success and failure of its military modernization
efforts and the potential, short-term advantages for Beijing and Moscow in moving their respective defense
markets given the proximity of their political leaders to domestic industry, to the dismay of policymakers in
Washington. Of course, it remains an important question whether the advantages of qualitative and
quantitative shifts in military force will shape scholarship in this arena moving forward.
Rosella Cappella Zielinski and Patrick Shea move to a more granular example to examine the experience of
nancing war in the twenty- rst century, exploring the extent to which economic resources, and economic
interaction, have constrained and conditioned the actual use of force. In addition, they consider the reciprocal
extent to which the conduct of war has affected the economies of belligerents. Their chapter, to some extent,
re ects a practical turn in scholarship that is focused on policymaking in a strategic context: “whom to tax,
where to borrow, how much to print? Do you extract from the masses or a select few? Do you extract from the
rich or pass on the costs to future generations and or the poor? If funding sources exist outside their borders,
leaders must decide between grants or loans and the source of these funds. Or do leaders open war nance to
the global citizenry with donation campaigns, perhaps in cryptocurrency?”17 Importantly, from a theoretical
perspective, their work considers both state actors and non-state actors who leverage global markets for their
survival and success.
Finally, Reddie examines the application of what is often considered to be the classic tool of economic
statecraft: sanctions.18 He revisits the classical theory as to how sanctions are theorized to operate and argues
that domestic political imperatives have reshaped the international practice of sanctions regimes insofar as
they no longer represent an action designed to compel an adversary to undertake a particular action but rather
a signal—primarily to domestic audiences—that a government is “taking action.” It is for this reason that
much of the contemporary handwringing surrounding whether sanctions work or not entirely misses the
point. Bringing the literature up to date to consider the most recent sanctions regimes put in place following

Downloaded from https://academic.oup.com/edited-volume/56064/chapter/474740263 by North Carolina State University Libraries user on 18 March 2025
Russia’s invasion of Ukraine, Reddie poses new questions for scholars working on the causes and consequences
of sanctions regimes and suggests that we might think about sanctions amid the broader toolkit of economic
statecraft.
Re ecting on the themes of this volume, each of the chapters in this section tackles empirical puzzles that were
thought long settled in light of the increasingly tight integration of economic and security concerns and the
ongoing debate over whether security drives economic development or whether economic success drives
security.

Regional Perspectives

Finally, the chapters in the regional section edited by Lee examine how geoeconomics and economic statecraft
have been conceptualized and practiced in various national and regional contexts. Although the concepts
discussed in this and Section 1 of the volume are considered from a universal perspective, the application of
those de nitions to different countries and regions exhibits considerable variety, informed by history, strategic
culture, and middle power rivalries. The perspectives include cross-country comparisons and the European
Union, as well as a focus on the policies of individual states.
On a cross-country basis, Laxman Behera and Smruti Pattanaik examine how economic statecraft has been
practiced in six countries in South Asia: they show that economic statecraft has been a major feature of the
India-Pakistan rivalry, while other states in the region have used economic statecraft as a means of securing
material gains from the India-China rivalry and balancing against India. Similarly, Francisco de Santibañes
examines geoeconomics in Latin America, focusing on how the region has been shaped by the Argentina-
Brazil rivalry and external pressures stemming from the global US-China rivalry. And Paa-Kwesi Heto
examines geoeconomics and economic statecraft in Africa, distinguishing between dynamics at the
international, continental, and sub-regional levels and emphasizing the agency of African states in in uencing
the international system. All of the chapters show that geoeconomics and economic statecraft can be de ned in
general terms but applied to a range of contexts, variations on a theme that are playing out in different parts of
the international order.
In between the cross-regional comparisons and individual chapters is the distinctive case of the European
Union. Richard Maher notes that its economic size and central position in global economic and nancial
networks have made it one of the leading geoeconomic actors in world politics today. It has used trade policy,
regulatory policy, enlargement, sanctions, and foreign aid to advance its strategic interests in its region and
beyond. At the same time, it currently faces several key challenges, including foreign investments in European
rms specializing in critical technologies, deglobalization, and Chinese companies’ inclusion in EU countries’
5G network infrastructure. Looking to the future, Maher argues that the European Union is likely to continue to
view the use of economic instruments in pursuit of geopolitical objectives as essential for its goal of “strategic
autonomy.”
Among the chapters that focus on individual states, Tung Bui critically examines the applicability of the
concept of “bamboo diplomacy” to Vietnam, drawing an analogy to bamboo—a resilient, fast-growing plant—
with a diplomatic approach that embodies a blend of steadfast adherence to principles with adaptability in
tactics. But Bui nds this analogy wanting, arguing that Vietnam’s rise as a regional middle power cannot be
fully explained using this concept alone. He highlights the challenges that Vietnam faces going forward and
presents a strategy of pragmatic statecraft that Vietnam can employ to offset its vulnerabilities, identifying
areas where Vietnam can exercise agency and areas where Vietnam’s success is constrained by the choices of its
neighbors.
Seungjoo Lee examines South Korea’s economic statecraft at the intersection of its development strategy and

Downloaded from https://academic.oup.com/edited-volume/56064/chapter/474740263 by North Carolina State University Libraries user on 18 March 2025
its national security policy, showing how the South Korean state has employed policy instruments to
simultaneously meet its strategic objectives in areas as diverse as economic growth and countering the threat
from North Korea. These include upgrading its industrial structure and promoting the defense industry. More
broadly, South Korea has developed an inclusive economic statecraft that uses advanced technology as a nexus
between the economy and security, pursues technological sovereignty to reduce external dependence, and
seeks cooperation with like-minded countries.
Will Norris, Xu Yaosheng, and Dora Hu turn to the case of China. They focus on both the conceptual issue of
how the strategic studies community in China views the relationship between geoeconomics and grand
strategy and the empirical question of how China’s economic statecraft has evolved in recent years,
highlighting the trend toward growing statism under Xi Jinping. Chinese strategies have involved both the
domestic development of China’s party-state capacity as well as leveraging technology in the context of an
increasingly competitive international environment.
James Lee focuses on the United States, highlighting the persistent connection between threat perception and
state intervention in the history of US foreign relations. He focuses on the recent resurgence of industrial
policy, drawing on the concept of the developmental state and the implementation of US economic statecraft
during the Cold War to provide a historical perspective on contemporary US policy in trade and technology.
Russia’s approach to geoeconomics and economic statecraft has undergone far-reaching upheaval following its
seizure of Crimea in 2014 and subsequent invasion and war against Ukraine in 2022. Vasily Kashin, Alexandra
Yankova, and Kristina Kondakov argue that Russia has adopted a new economic fortress model that makes
comprehensive self-reliance and self-suf ciency of paramount importance. They identify four overarching
goals driving post-2022 Russian economic statecraft: (1) rapidly expanding trade relations with the Global
South to replace the cutoff to Western, especially US and European, markets; (2) the nationalization and
redistribution of strategic and economic assets from Russian rms and business tycoons closely associated
with Western countries to “nativist” state-owned rms and entities and actors whose business activities have
been predominately located within Russia’s domestic economy; (3) aggressive import substitution policies and
the promotion of technological self-reliance at any cost; and (4) using economic instruments to advance
Russian foreign policy goals and to ght back against Western sanctions and seizures of Russian assets. This
hard securitization of the Russian economy is designed for a prolonged and intensive new Cold War with the
West.
All of the chapters show that geoeconomics and economic statecraft can be de ned in general terms but
applied to a range of contexts, variations on a theme that are playing out in different parts of the international
order. They also show that geoeconomics and economic statecraft are not limited to a Western context or the
US-China strategic competition. Rather, they are an inherent feature of foreign policy and national security
policy and a property of both regional and international systems. The study of geoeconomics and economic
statecraft can readily incorporate non-Western practices and traditions, as well as considerations of geography
at the regional level. Geoeconomics and economic statecraft are inherent features of the study of international
relations. In short, this section shows that states have practiced economic statecraft, and responded to
geoeconomic pressures, in ways that speak to the enduring relevance of these concepts for national security.
References
Aggarwal, Vinod K. 1983. The Unraveling of the Multi-Fiber Arrangement, 1981: An Examination of International Regime Change.
International Organization 37 (4):617–45.
Google Scholar WorldCat

Aggarwal, Vinod K. 1985. Liberal Protectionism: The International Politics of Organized Textile Trade. University of California Press.

Downloaded from https://academic.oup.com/edited-volume/56064/chapter/474740263 by North Carolina State University Libraries user on 18 March 2025
Google Scholar Google Preview WorldCat COPAC

Aggarwal, Vinod. K., and Andrew W. Reddie. 2019. Regulators Join Tech Rivalry with National-Security Blocks on Cross-Border
Investment. Global Asia 14 (1):40–47.
Google Scholar WorldCat

Aggarwal, Vinod. K., and Andrew W. Reddie. 2020. New Economic Statecra : Industrial Policy in an Era of Strategic Competition.
Issues & Studies 56 (2):1–29.
Google Scholar WorldCat

Deutsch, Karl, Sidney A. Burrell, Robert A. Kann, Maurice Jr. Lee; Martin Lichterman, R. E. Lindgren, F. L. Lorwenheim, and
R. W. VanWagenen. 1957. Political Community and the North Atlantic Area: International Organization in the Light of Historical
Experience. Princeton University Press.
Google Scholar Google Preview WorldCat COPAC

Haas, Ernst B. 1958. The Uniting of Europe. Stanford University Press.

Google Scholar Google Preview WorldCat COPAC

Hall, Peter A., and David Soskice. 2001. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. Oxford
University Press.
Google Scholar Google Preview WorldCat COPAC

Keohane, Robert, and Joseph Nye. 1977. Power and Interdependence: World Politics in Transition. Little, Brown, and Company.
Google Scholar Google Preview WorldCat COPAC

Krasner, Stephen D. 1982. Structural Causes and Regime Consequences: Regimes as Intervening Variables. International
Organization 36 (2):185–205.
Google Scholar WorldCat

Mitrany, David. 1948. The Functional Approach to World Organization. International A airs 24 (3):350–63.
Google Scholar WorldCat

Price, Richard. 1995. A Genealogy of the Chemical Weapons Taboo. International Organization 49 (1):73–103.
Google Scholar WorldCat

Putnam, Robert. D. 1988. Diplomacy and Domestic Politics: The Logic of Two-Level Games. International Organization, 42
(3):427–60.
Google Scholar WorldCat

Tannenwald, Nina. 2005. Stigmatizing the Bomb: Origins of the Nuclear Taboo. International Security 29 (4):5–49.
Google Scholar WorldCat

Waltz, Kenneth N. Waltz. 1979. Theory of International Politics. Addison-Wesley Publishing.

Google Scholar Google Preview WorldCat COPAC
Notes
1 Aggarwal and Reddie 2019.

2 Waltz 1979.

3 See Leeʼs detailed analysis in Section 1 of this volume of geoeconomics, economic statecra , and the political economy of

Downloaded from https://academic.oup.com/edited-volume/56064/chapter/474740263 by North Carolina State University Libraries user on 18 March 2025
national defense.

4 This chapter draws heavily on the summary of di erent parts of the book by the section editors of this volume.

5 Mitrany 1948.

6 Haas 1958; Deutsch et al. 1957.

7 As discussed by Matt Ferchen in this volume, international political economists focused on how political structures
influenced global economic transformation.

8 Krasner 1982, 5.

9 Aggarwal 1983, 1985.

10 Price 1995; Tannenwald 2005.

11 Keohane and Nye 1977.

12 On “new economic statecra ,” see Aggarwal and Reddie 2020.

13 Waltz 1979.

14 Putnam 1988.

15 Lee, Mahnken, and Reddie, this volume.

16 Dombrowski, this volume; Hall and Soskice 2001.

17 Capella Zielinski and Shea, this volume.

18 Reddie, this volume.