The State and Tools of Statecraft

     Positive engagement and negative sanctions both influence other states to change their behavior through economic statecraft.  The difference is that positive engagement uses incentives to reinforce behaviors that are beneficial to the host state, while negative sanctions involve placing restrictions on behaviors that aren't (Mingst, McKibben, Arreguin-Toft, 160-161).  Incentives for positive engagement include trading privileges, military equipment, corporate investments or tax breaks, and lower tariff rates.  Negative sanctions include higher tariff rates, freezing state assets, arms embargos, and banning exports and/or imports to/from the country being punished.  The premise borrows heavily from psychologist B.F. Skinner's theory of behaviorism, extending it from the individual to the international stage: rewards reinforce positive behavior while punishment discourages negative behavior.

    For the most part, only states with higher power potential are able to use economic statecraft to influence international relations.  This is because they often have the natural resources, wealth, and productivity to bargain or threaten other nations with negative sanctions.  Some liberals however believe that countries with lower power potential have some leverage in economic statecraft.  For example, when Middle Eastern countries put oil sanctions on the U.S. in 1974, it drove up gas prices and hurt the economy (Mingst, McKibben, Arreguin-Toft, 162).  This is a good example of the importance of negative sanctions, illustrating how they can be useful in economic statecraft.  However, studies have shown that sanctions are only effective 22% of the time (Mingst, McKibben, Arreguin-Toft, 163).  Positive engagement is also useful because it has been proven to influence foreign behavior.  When the U.S. offered insurance to U.S. companies willing to invest in post-apartheid South Africa, it helped their economy and sent the message that the U.S. was willing engage economically so long as South Africa took actions to prevent apartheid from happening again.

    When it comes to foreign policy decision making, realists use the rational model, which identifies the goals and alternatives of decisions, weighing the costs and benefits of each.  The outcome will ideally produce the best result at the lowest cost (Mingst, McKibben, Arreguin-Toft, 167).  Organizations and bureaucracies make up one model of the liberal view.  Decisions are negotiated upon, based on their value to the groups involved.  They ultimately depend on the relative strength of the organization or bureacracy represented (Mingst, McKibben, Arreguin-Toft, 169).  Another face of the liberal view is the pluralist model, where various societal groups compete for domestic decisions, including interest groups, multinational corporations, public opinion, and mass movements (Mingst, McKibben, Arreguin-Toft, 168).

    The liberal models are similar in that they are inherently domestic, thus taking a long time to process.  They are also more available to larger countries that involve democratic processes.  They are most appropriately used when evaluating decisions that influence domestic social groups.  In times of crisis though, the rational model is more appropriate to use because there may not be enough time for all the lobbying that social groups bring to the table.

    Globalization is arguably the most important challenge to the state in today's world.  In the past, countries were far more isolated than they are today.  It was easier to ascribe every state's behavior to one of the theories or models of foreign policy.  In today's world, boundaries are becoming less defined.  Revolutions in trade, communication, and transportation have accelerated the diffusion of politics, economics, and culture between states (Mingst, McKibben, Arreguin-Toft, 174-175).  The Internet has only been around for about 30 years, yet it has probably played the biggest role in accelerating globalization.

    The challenge for states is to balance an increasingly globalized world with their own national identity.  International conflicts must be recognized by the state in order to keep its autonomy, and the state must find a way to compromise its sovereignty without totally losing its identity.  For example, because the Covid-19 outbreak was accelerated by globalization, each state reacted to it similarly.  Each state needed to protect its own citizens by initiating travel restrictions and making mask mandates.  But it also needed to make these sacrifices for the global community, because if states did nothing collectively to stop the spread of the virus, it would have infected far more people than it already has.

Source: Mingst, K. A., McKibben, H. E., & Arreguín-Toft, I. M. (2018). Essentials of International Relations (Eighth Edition) (8th Edition). W. W. Norton.