Strategic Uses of Economic Interdependence: Engagement Policies on the Korean Peninsula and Across the Taiwan Strait

Abstract

While the determinants and effectiveness of economic sanctions have been the subject of a substantial and growing literature in international relations, much less attention has been given to economic engagement strategies, where a country deliberately expands economic ties with an adversary to change the target’s behavior. This article develops a theoretical framework that distinguishes between three types of engagement strategies: conditional policies that directly link economic ties to changed behavior in the target state; unconditional policies where economic interdependence is meant to act as a constraint on the behavior of the target state; and unconditional policies where economic interdependence is meant to effect a transformation in the foreign policy goals of the target state. The article presents several hypotheses concerning the conditions facilitating or hindering the successful implementation of these different strategies, and then examines engagement policies adopted by three East Asian states: South Korea, Taiwan, and mainland China. The cases offer preliminary confirmation of at least three of the hypotheses: conditional strategies are less likely to succeed when the initiating state is a democracy; transformative strategies are more likely to succeed when the target state is a democracy; and transformative strategies are more likely to succeed when a broad consensus exists in the initiating state.

US–China Economic Integration and its Implications for US Policy in the Taiwan Strait

“…20 Kirshner ( 2008 , 241 Baldwin ( 1985 , 32). 23 For studies of noncoercive economic statecraft, see Baldwin ( 1985 ); Davis ( 2008Davis ( /2009Drezner ( 1999Drezner ( /2000; and Kahler and Kastner ( 2006 ). China's efforts to block Governor Jay Nixon's trip to Taiwan-described at the beginning of this chapter-appear to be an example of the successful use of coercive economic statecraft directed against Taiwan. According to newspaper accounts of the episode, Chinese offi cials implicitly threatened to withhold economic cooperation on a major international cargo hub project in St. Louis if Nixon went forward with his visit.…”

Containment and Engagement as Middle-Range Theories

“…In the sociological sphere middle-range theory is generally understood as "a set of propositions that bridge the gap between the empirical observation and broad, often abstract and untestable, general or high lever theories" 15 . Thus, this is an approach integrating theory and empirical data.…”

A security and peace mechanism for Northeast Asia: the economic dimension

“…However, these effects should not be exaggerated, particularly with respect to an economically closed and authoritarian regime such as North Korea (Kahler and Kastner 2006). To date, the use of economic carrots appears to have had surprisingly little effect on North Korea's bargaining behavior; if anything, North Korea has been more forthcoming when facing a combination of inducements and sanctions.…”