Economic Tools of Foreign Policy

Summary

In this video, Noah Zerbe discusses the economic tools of foreign policy, emphasizing how states use these instruments to achieve their international goals. Economic tools, ranging from foreign aid to sanctions and embargoes, fall in the middle of the coercion spectrum. Zerbe highlights how aid can reward allies or encourage desired behaviors, while sanctions and embargoes are used to punish and disincentivize actions. He explains the various forms of aid and sanctions, their effectiveness, and the complexities of their implementation. The video offers a broad overview of how economic power shapes foreign policy decisions.

Takeaways

• 🌍 Foreign policy tools help states achieve their international goals, with economic tools being a key part of this process.
• 📉 Economic tools fall in the middle of the coercion spectrum, ranging from non-coercive options like trade preferences to more coercive ones like military aid.
• 💸 Foreign aid is a commonly used economic tool, serving various purposes like rewarding behavior, strengthening alliances, or enhancing a donor country's global image.
• 🤝 Aid can be bilateral (directly from one country to another) or multilateral (through international organizations like the UN).
• 🔗 Aid can also be tied (restricted to specific uses benefiting the donor country) or untied (allowing recipient flexibility). Most US aid is tied, unlike many other nations.
• 💼 Aid can be provided as grants (non-repayable) or subsidized loans, which often come with favorable interest rates and long repayment periods.
• 🚫 Embargoes and sanctions are the opposite of aid, aiming to punish or discourage certain behaviors by isolating or pressuring the targeted country.
• ⚔️ Embargoes can be broad, such as the US embargo on Cuba, or more focused, like arms embargoes targeting military technology.
• 💎 Targeted sanctions can apply to specific individuals, freezing assets or imposing travel bans, often with more effectiveness than broader sanctions.
• 🛑 Sanctions are often criticized for harming vulnerable populations and being ineffective for broader goals, yet they remain popular due to their low risk compared to military action.

Q & A

What are the main types of foreign policy instruments mentioned in the video?

The video discusses several types of foreign policy instruments, including economic tools, diplomacy, espionage, and the use of force.

Where do economic tools fall on the spectrum of coercion or violence in foreign policy?

Economic tools fall in the middle of the spectrum of coercion or violence. Some, like preferential trade status, are non-coercive, while others, such as military aid, are more coercive.

What is foreign aid, and why do countries provide it?

Foreign aid is the voluntary transfer of resources from one country to another. Countries provide aid to achieve various foreign policy objectives, such as supporting allies, influencing policies, extending cultural influence, or improving global image.

What is the difference between bilateral and multilateral aid?

Bilateral aid is provided directly from one country to another, while multilateral aid is pooled from multiple countries and distributed through international organizations like the UN.

What is the difference between tied and untied aid?

Tied aid is provided with conditions that require the recipient to spend the aid on goods and services from the donor country. Untied aid comes without such restrictions, allowing the recipient to allocate the aid according to its own needs.

How can foreign aid be classified according to its purpose?

Foreign aid can be classified into various categories, including food aid, technical aid, project aid, emergency/humanitarian aid, and military aid, each intended to address specific needs in the recipient country.

What are embargos and sanctions, and how do they differ from foreign aid?

Embargos and sanctions are economic tools used to discourage or punish specific behaviors in other countries, as opposed to foreign aid, which encourages certain actions. Embargos are typically more severe, often enforced through military measures, while sanctions include a wider range of trade restrictions.

Can you give an example of an embargo and its impact?

One example is the US embargo on Cuba, which has been in place since 1962. It prohibited US businesses from trading with Cuba, with the intention of pushing Cuba towards democratization and punishing its government for human rights violations.

What are targeted sanctions, and why are they used?

Targeted sanctions focus on specific individuals, often political leaders or high-level officials, to avoid harming the general population. Measures include travel bans, asset freezes, and business restrictions, aiming to change the behavior of these key figures.

Why are sanctions a popular foreign policy tool despite mixed results?

Sanctions are popular because they allow states to act without bearing the costs of direct military confrontation. However, they often have mixed success, with broader objectives (like regime change) being harder to achieve. Sanctions supported by the international community tend to be more effective.