The Encyclopedia of Economic Statecraft

Guided reading paths

Follow a question through a short sequence of entries. Read the sources and limitations as well as the explanations.

How should I approach economic statecraft?

A first route through the field, from its scope to different instruments and debates.

  1. Begin with the fieldEconomic statecraft

    Economic statecraft is the intentional use, threatened use, organisation or strategic shaping of economic relationships, resources, rules and instruments by political authorities to pursue foreign-policy, security or geopolitical objectives. It is the...

  2. Consider inducementsPositive economic statecraft (inducement)

    Positive economic statecraft, or economic inducement, is the offer or provision of an economic benefit made conditional on a desired action, alignment or continuing relationship. It differs from engagement, which can sustain a relationship without...

  3. Follow a financial instrumentDollar-clearing denial

    Dollar-clearing denial restricts a target's access to United States dollar payment and settlement through identified legal authorities, correspondent banks and payment systems. It can be severe because offshore dollar activity commonly depends on accounts...

  4. Explore a technology instrumentExport control as strategic instrument

    Export control as a strategic instrument is the use of licensing, prohibition or related export authority to affect a foreign actor's strategic options or capabilities. Export controls have several policy purposes under authorities such as US Bureau of...

  5. Question effectivenessSanctions effectiveness debate

    The sanctions effectiveness debate concerns how objectives, case selection, causation and the unit of success shape claims about whether sanctions work. It is not a contest between two directly comparable percentages. Threats, compellence, signalling,...

How do secondary sanctions work?

Read the concept, relevant institutions and a historical case, then examine the limits of effectiveness claims.

  1. Define the instrumentSecondary sanctions

    Secondary sanctions are penalties imposed on third-country persons and firms for dealing with a sanctioned target, extending the sanctioning state's reach beyond its own jurisdiction. Where primary sanctions bind the sanctioning state's own nationals,...

  2. Identify an administering institutionOffice of Foreign Assets Control (United States)

    The Office of Foreign Assets Control (OFAC) is an office of the United States Department of the Treasury that administers and enforces sanctions programmes under statutes, executive orders, regulations and delegated authority. It issues regulations and...

  3. Understand payment accessDollar-clearing denial

    Dollar-clearing denial restricts a target's access to United States dollar payment and settlement through identified legal authorities, correspondent banks and payment systems. It can be severe because offshore dollar activity commonly depends on accounts...

  4. Read a caseUS secondary banking and oil sanctions against Iran under CISADA and NDAA (2010-2012)

    Between 2010 and 2012 the United States conditioned foreign financial institutions' access to correspondent and payable-through accounts on avoiding specified Iranian activity. CISADA addressed designated institutions and support for Iran's petroleum...

  5. Assess the debateSanctions effectiveness debate

    The sanctions effectiveness debate concerns how objectives, case selection, causation and the unit of success shape claims about whether sanctions work. It is not a contest between two directly comparable percentages. Threats, compellence, signalling,...

How do technology controls operate?

Move from the strategic instrument to licensing, institutions, technology and a case.

  1. Start with the instrumentExport control as strategic instrument

    Export control as a strategic instrument is the use of licensing, prohibition or related export authority to affect a foreign actor's strategic options or capabilities. Export controls have several policy purposes under authorities such as US Bureau of...

  2. Examine licensingExport licensing of strategic materials

    Export licensing of strategic materials requires government authorisation for specified materials, products or technology before export under stated conditions. A licence requirement is not an export ban, and separate national controls should not be merged...

  3. Identify institutional responsibilityBureau of Industry and Security (US Commerce)

    The Bureau of Industry and Security (BIS) is the bureau of the US Department of Commerce that administers and enforces American controls on dual-use and certain other goods, software and technology. Its instruments include the Export Administration...

  4. Investigate the technologySemiconductor chokepoint

    The semiconductor chokepoint is a set of concentrated, difficult-to-substitute control points across chip design software, manufacturing equipment, specialised materials and leading-edge fabrication. Concentration creates latent leverage. It becomes...

  5. Read a caseUnited States advanced-computing and semiconductor controls on China (2022-present)

    United States advanced-computing and semiconductor controls on China (2022-present) are an evolving export-control architecture that began with the rules announced on 7 October 2022. The controls restrict specified advanced-computing chips, supercomputing...

How can economies respond to external pressure?

Compare approaches to dependencies and adaptation without assuming that any response is costless.

  1. Map supply dependenciesSupply-chain resilience

    Supply-chain resilience is the ability of a supply system to anticipate, absorb, adapt to and recover from disruption while sustaining critical functions. Resilience can come from agility, diversification, redundancy, information, logistics and...

  2. Consider sourcing choicesFriend-shoring and de-risking

    Friend-shoring reorients selected supply chains, production or investment towards trusted partners. De-risking is the broader reduction of concentrated exposure to vulnerabilities without requiring general economic separation. The concepts overlap, but...

  3. Examine stockpilesStrategic stockpiling

    Strategic stockpiling is the deliberate accumulation and maintenance of public reserves, or reserves held under legal obligation, to reduce exposure to external disruption, meet defence or emergency needs, or support a credible strategic response. Ordinary...

  4. Consider collective responsesCollective resilience

    Collective resilience is the combined capacity of partners to prepare for, absorb, adapt to and recover from economic shocks or coercion while maintaining essential functions and mutual support. It exists only where cooperation adds capabilities that...

  5. Assess the strategic distinctionStrategic resilience versus tactical success

    Strategic resilience versus tactical success is the proposition that an economic-statecraft action may achieve its immediate operational objective while reducing future leverage through target adaptation, network substitution, sender costs or coalition...