A new edition of the classic work on the economic tools of foreign policy Today's complex and dangerous world demands a complete understanding of all the techniques of statecraft, not just military ones. David Baldwin's Economic Statecraft presents an analytic framework for evaluating such techniques and uses it to challenge the notion that economic instruments of foreign policy do not work. Integrating insights from economics, political science, psychology, philosophy, history, law, and sociology, this bold and provocative book explains not only the utility of economic statecraft but also its morality, legality, and role in the history of international thought. Economic Statecraft is a landmark work that has fundamentally redefined how nations evaluate crucial choices of war and peace. Now with a substantial new preface by the author and an afterword by esteemed foreign-policy expert Ethan Kapstein, this new edition introduces today's generation of readers to the principles and applications of economic statecraft.

The first comprehensive history of America's attempts to promote international development by exporting private enterprise, a story marked by frequent failure and occasional success. Foreign aid is a primary tool of US foreign policy, but direct financial support and ventures like the Peace Corps constitute just a sliver of the American global development pie. Since the 1940s, the United States has relied on the private sector to carry out its ambitions in the developing world. This is the first full account of what has worked and, more often, what has failed in efforts to export American-style capitalism. Ethan Kapstein draws on archival sources and his wide-ranging experience in international development to provide penetrating case studies from Latin America and East Asia to the former Soviet Union, Afghanistan, and Iraq. After WWII the Truman and Eisenhower administrations urged US companies to expand across the developing world. But corporations preferred advanced countries, and many developing nations, including Taiwan and South Korea, were cool to foreign investment. The Cold War made exporting capitalism more important than ever, even if that meant overthrowing foreign governments. The fall of the Soviet Union brought new opportunities as the United States promoted privatization and the bankrolling of local oligarchs. Following the invasions of Afghanistan and Iraq, the United States believed it had blank slates for building these economies, but ongoing conflict eroded such hopes. Kapstein's sobering history shows that private enterprise is no substitute for foreign aid. Investors are often unwilling to put capital at risk in unstable countries. Only in settings with stable governments and diverse economic elites can private enterprise take root. These lessons are crucial as the United States challenges China for global influence.

Drawing on a rich set of interviews and surveys, this book shows how the global AIDS treatment advocacy movement helped millions in the developing world gain access to life-saving medication. The movement achieved this by transforming the market for AIDS drugs from one which was 'low volume, high price' to one based on access for all. The authors suggest that a movement's ability to transform markets depends upon whether: (1) markets are contestable; (2) they have framed their arguments to resonate across their target audiences; (3) the movement itself has a coherent goal; (4) the costs are low, or the benefit-to-cost ratio is favourable; and, finally, (5) institutions are present to reward continued achievement of the new market principle. These insights are applied to a range of other cases including malaria, maternal mortality, water/diarrheal disease, non-communicable diseases, education, climate change, the ivory trade, sex trafficking and the Atlantic slave trade.

Under what conditions do the governments of developing countries manage to reform their way out of political and economic instability? When are they instead overwhelmed by the forces of social conflict? What role can great powers play in shaping one outcome or the other? This book is among the first to show in detail how the United States has used foreign economic policy, including foreign aid, as a tool for intervening in the developing world. Specifically, it traces how the United States promoted land reform as a vehicle for producing political stability. By showing where that policy proved stabilizing, and where it failed, a nuanced account is provided of how the local structure of the political economy plays a decisive role in shaping outcomes on the ground.

The recent backlash against democracy in such countries as Bolivia, Venezuela, Russia, and Georgia poses renewed concerns about the viability of this regime type in the developing world. Drawing on a unique data set of every democratization episode since 1960, this book explores the underlying reasons for backsliding and reversal in the world s fledgling democracies and offers some proposals with respect to what the international community might do to help these states stay on track toward political stability. Rejecting earlier scholarship on this topic, which focused on poor economic performance as the leading cause of democratic reversal, Kapstein and Converse argue that the core of the problem is found in the weak institutions that have been built in much of the developing world, which encourage leaders to abuse their power. Understanding the underlying reasons for democratic failure is essential if we are to offer policy recommendations that have any hope of making a difference on the ground.

Under what conditions do the governments of developing countries manage to reform their way out of political and economic instability? When are they instead overwhelmed by the forces of social conflict? What role can great powers play in shaping one outcome or the other? This book is among the first to show in detail how the United States has used foreign economic policy, including foreign aid, as a tool for intervening in the developing world. Specifically, it traces how the United States promoted land reform as a vehicle for producing political stability. By showing where that policy proved stabilizing, and where it failed, a nuanced account is provided of how the local structure of the political economy plays a decisive role in shaping outcomes on the ground.

Drawing on a rich set of interviews and surveys, this book shows how the global AIDS treatment advocacy movement helped millions in the developing world gain access to life-saving medication. The movement achieved this by transforming the market for AIDS drugs from one which was 'low volume, high price' to one based on access for all. The authors suggest that a movement's ability to transform markets depends upon whether: (1) markets are contestable; (2) they have framed their arguments to resonate across their target audiences; (3) the movement itself has a coherent goal; (4) the costs are low, or the benefit-to-cost ratio is favourable; and, finally, (5) institutions are present to reward continued achievement of the new market principle. These insights are applied to a range of other cases including malaria, maternal mortality, water/diarrheal disease, non-communicable diseases, education, climate change, the ivory trade, sex trafficking and the Atlantic slave trade.

A new edition of the classic work on the economic tools of foreign policy Today's complex and dangerous world demands a complete understanding of all the techniques of statecraft, not just military ones. David Baldwin's Economic Statecraft presents an analytic framework for evaluating such techniques and uses it to challenge the notion that economic instruments of foreign policy do not work. Integrating insights from economics, political science, psychology, philosophy, history, law, and sociology, this bold and provocative book explains not only the utility of economic statecraft but also its morality, legality, and role in the history of international thought. Economic Statecraft is a landmark work that has fundamentally redefined how nations evaluate crucial choices of war and peace. Now with a substantial new preface by the author and an afterword by esteemed foreign-policy expert Ethan Kapstein, this new edition introduces today's generation of readers to the principles and applications of economic statecraft.

The recent backlash against democracy in such countries as Bolivia, Venezuela, Russia, and Georgia poses renewed concerns about the viability of this regime type in the developing world. Drawing on a unique data set of every democratization episode since 1960, this book explores the underlying reasons for backsliding and reversal in the world s fledgling democracies and offers some proposals with respect to what the international community might do to help these states stay on track toward political stability. Rejecting earlier scholarship on this topic, which focused on poor economic performance as the leading cause of democratic reversal, Kapstein and Converse argue that the core of the problem is found in the weak institutions that have been built in much of the developing world, which encourage leaders to abuse their power. Understanding the underlying reasons for democratic failure is essential if we are to offer policy recommendations that have any hope of making a difference on the ground.

"In charting a politically feasible course toward a fairer world economy, Kapstein demonstrates that a better future is within our grasp. This is must reading for all those concerned with economic development and international economic relations."--Nancy Birdsall, president of the Center for Global Development

"A clear, accessible, and first-rate contribution to the debates surrounding fairness in the global economy and ethics in international affairs."--Michael Barnett, University of Minnesota

"The globalizing economy is offering exciting opportunities to some, but that is little comfort to the millions who are sinking ever deeper into poverty. What should the wealthy world do? Ethan Kapstein offers an answer that combines a powerful critique of ideas about international justice and a hard-headed alternative solution."--Ngaire Woods, Oxford University

"For many years the development community has been making the humanitarian case for increases in foreign aid and for public policies that target global poverty reduction. Now in this important book, Ethan Kapstein demonstrates that these measures are also in the self-interest of the world's most powerful nations. In charting a politically feasible course toward a fairer world economy, Kapstein demonstrates that a better future is within our grasp. This is must reading for all those concerned with economic development and international economic relations."--Nancy Birdsall, President, Center for Global Development

No area has become more global in its operations, more volatile, and thus more difficult to monitor and control than international banking. In this book, the international banker and political economist Ethan Kapstein explores the actions that governments have taken to cope with the economic and political consequences associated with the globalization of international finance.

This volume offers a new dimension to realist theories about world politics. It questions both the theoretical and empirical foundations of much of traditional realist thought by offering realist-oriented analyses that emphasize the possibilities of cooperation and accommodation through agreement over common motivations and concerns. The articles in this volume demonstrate that moral considerations can and do play a significant role in shaping state behavior and that despair about the possibility of improving the systems and institutions within which we live is unwarranted. Specific points of normative convergence are raised in some detail, especially on issues of war, membership and authority, humanitarian concern and the social consequences of globalization. Three ethical concepts form the core of the 'realism reconsidered' argued for here, namely, the ideas of pluralism, rights and fairness.

Ethan Kapstein documents how the international economic order has torn huge holes in the welfare system, putting workers and the economy itself at risk. The founding premise of the post-World War II international economic agreements were that they would lead to greater wealth and that those gains would be shared equitably. The closing decades of the 20th century have seen co-operation strengthened through the growth of trading blocs and multinational firms. But nations eager to remain competitive in the new world economy have at the same time beggared their labourers, tearing away crucial pieces of the social safety net. The predictable result, Kapstein argues goes far beyond the alarming trends in income inequality already observed. Turning common wisdom on its head, Kapstein demonstrates that programmes to ensure the health and prosperity of workers, far from expensively undermining growth, actually promote and sustain growth over the long run. Bolstering his argument with historical lessons about the dangers of a dissatisfied workforce, he drives home a new view of labour's share in the world economy.