20th+: Weaponized Interdependence - Global Economic Coercion

States increasingly “weaponize interdependence” by leveraging global networks of informational and financial exchange for strategic advantage. The theoretical literature on network topography posits that standard models predict that many networks grow asymmetrically --- resulting in the greater connectivity of some nodes. The standard model nicely describes several key global economic networks, centering on the United States and a few other states. Highly asymmetric networks allow weaponized structural advantages for coercive ends.to states that enjoy (1) effective jurisdiction over the central economic nodes and (2) appropriate domestic institutions and norms. In particular, two mechanisms operate. Firstly, states can employ the “panopticon effect” to gather strategically valuable information. Secondly, they can employ the “chokepoint effect” to deny network access to adversaries.

Weaponized Interdependence: How Global Economic Networks Shape State Coercion .

The uses and abuses of weaponized interdependence in 2021: Some thoughts about economic statecraft over the next year or so (WaPo)

In 2019 Henry Farrell and Abraham Newman published an article titled “Weaponized Interdependence: How Global Economic Networks Shape State Coercion.” ... Farrell and Newman were not the first to observe that states could exploit interdependence to engage in economic statecraft. The concept was explored in 1945 in National Power and the Structure of Foreign Trade by Albert Hirschman. Farrell and Newman’s work has applied network theory to explain how coercing actors could exploit interdependence, and why targeted actors would find it difficult to evade coercion attempts.

A subsequent collaboration produced an edited volume, “The Uses and Abuses of Weaponized Interdependence,” published by Brookings Institution Press. The volume features Farrell and Newman’s original article as well as 16 additional chapters from an array of scholars in different disciplines, extending and reacting to their argument.

“The Sanctions Paradox” argues that states would have more success coercing allies than adversaries but would be understandably reluctant to pressure international partners. Farrell and Newman would argue that potency of economic networks will render great powers more willing to exploit weaponized interdependence to threaten allies. The inability of allies to evade such networks means that the costs of doing so for the coercer are minimized. There will be more coercion, but it is far from clear that this will yield successful statecraft. In theory, it is possible that allies will be willing to acquiesce more. In practice, the tRUMP Badministration’s record in this regard was discouraging, mostly because the overuse of coercion negates its effectiveness. Furthermore, states are much more eager to coerce rivals. So far, weaponized interdependence has mostly encouraged great powers to try to coerce other great powers — a gambit that is likely to accomplish little regardless of the economic costs.

If one were to judge the “weaponized interdependence” phenomenon solely on public commentary, anything and everything has been weaponized. It is all too easy for analysts to deploy the term too broadly in order to attract attention and to inflate threats.

To the extent that weaponized interdependence has manifested, the United States has been the hegemonic coercer. Paradoxically, the concept is attracting attention because other countries (read, China) possess the capabilities to play the game. Thus, the United States needs to play defense as much as offense. The Biden administration and its boosters seem super-keen on this notion. The Committee on Foreign Investment in the United States (CFIUS) process might not work as well as intended. U.S. actions to limit weaponized interdependence can lead to unanticipated blowback that can damage the USA as much as the intended target.

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Wednesday, August 6, 2014

Weaponized Interdependence - Global Economic Coercion

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