Chapter 12 - Economic Statecraft

Question 1

Statecraft

Answer 1

The use of instruments by central political authority to serve FP purposes

Question 2

Economic Statecraft

Answer 2

The use of economic tools and relationships to achieve FP objectives. Some tools are used in conjunction with military and diplomatic tools.

Question 3

4 Tools of Economic Statecraft

Answer 3

Trade Restrictions (imports/exports)
Financial sanctions (cutting off military/development aid or blocking access to lending institutions)
Investment Restrictions (restrict direct foreign investment)
Monetary Sanctions
(destabilizing a current/exchange rate by buying and selling a state's currency)

Question 4

States Can Use Negative Sanctions to:

Answer 4

Alter domestic politics of another state/cause regime change, influence the FP behaviour of another state, and affect the economic/military capabilities of another state.

Question 5

Examples of Positive Sanctions

Answer 5

Trade promotion
Increase aid/donate resources
Helped to build trading partners
Encourage foreign investment
Support a country's currency

Question 6

Economic Sanctions are not always successful, but are useful because…

Answer 6

They offer an alternative to war / violent sanctions.

Question 7

Difficulties in Implementing Economic Sanctions

Answer 7

• States always have ways to minimize economic pain

- PR problems if it mostly affects citizens and not the state itself

Question 8

Usefulness of Sanctions

Answer 8

• Satisfy some, but not all goals
• First signal before military actions
• Good when there’s no other options

Question 9

Two Strategies of Positive Economic Statecraft

Answer 9

Tactical linkage

Structural linkage

Question 10

Tactical Linkage

Answer 10

the conditional promise of economic benefits to change the behaviour of another state. A short term calculation for maximum gain.

Question 11

Structural Linkage

Answer 11

an unconditional effort to use a slow stream of economic benefits to reconfigure the balance of political interests in a state. Long term strategy.

Question 12

Rally Around the Flag Effect

Answer 12

A short burst of popularity for a leader during a time of crisis.

Question 13

Positive Sanctions better because…

Answer 13

they more likely lead to cooperation

Question 14

Positive Sanctions worse because…

Answer 14

willingness to reward good behaviour may cause continual demands for rewards or reciprocation.
also, the PR problems with trading with an enemy.

Question 15

Liberals argue that interdependence…

Answer 15

decreases incentives for conflict

Question 16

Realists argue that interdependence…

Answer 16

is more likely to lead to conflict.

Also, it leaves you vulnerable, don’t rely on others if you don’t have to.

Question 17

Intervening Variable

Answer 17

Between independent and dependent variable.

Helps explain the differences of conflict or lack thereof with interdependence.