The concept of hedging and its application to Southeast Asia: a critique and a proposal for a modified conceptual and methodological framework

Abstract

In the context of the complex unipolar post-Cold War period that has witnessed China’s reemergence as an economic and military power, small and middle powers are increasingly considered to be hedging. This analysis is especially prevalent in relation to Southeast Asian countries, many of which face security challenges posed by China. However, as the literature on hedging has expanded, the concept’s analytical value is no longer obvious. Different understandings of hedging compete within the literature, and there are many criteria by which hedging is empirically ascertained, leading to confusion even over the basic question of which countries are hedging. In response, this article presents a modified conceptual and methodological framework that clearly delineates hedging from other security strategies and identifies key criteria to evaluate whether smaller powers are hedging when confronting a serious security challenge by one of the major powers. This framework is then applied to Malaysia and Singapore.

Malaysia’s Hedging Strategy Towards China Under Mahathir Mohamad (2018–2020): Direct Engagement, Limited Balancing, and Limited Bandwagoning

“…While usually strongly engaging economically with China, they hedge through security co-operation with the United States against negative strategic impacts of China’s rise. Yet the specific hedging strategies of Southeast Asian governments vary considerably, but are also interpreted differently by different authors, as Haacke (2019: 381–388) demonstrates convincingly.…”

“…Therefore, students of IR should remain critical of many self-proclaimed novel approaches. An illustration is the special issue of International Relations of the Asia-Pacific (2019) with important contributions, inter alia, from Ciorciari (2019), Ciorciari and Haacke (2019), Haacke (2019), and Korolev (2019). The authors provide an excellent critique on the current state of theory-building and methodological deficiencies.…”

“…Hedging thus conceptually reconciles apparent opposites within a new theoretical framework. However, this reconciliation can confuse the concept of hedging, if hedging – and in particular balancing – are conceptually not properly distinguished (Haacke, 2019: 389–391).…”

“…This assessment shows that although hedging is increasingly applied in the literature, due to the different meaning and understanding of the concept, its “analytical value is no longer obvious” (Haacke, 2019: 375). There exists a broad variety of conceptualisations and competing definitions, but no undisputed definition (Ciorciari and Haacke, 2019; Wu, 2019: 558–560).…”

“…Due to the origins of the concept in finance theory, mitigating risks is the starting point for conceptualising hedging. Accordingly, in IR, hedging can in a basic form be conceived “as a risk management strategy” (Haacke, 2019: 377). A hedger applies a set of policies to respond to broadly defined risks and uncertainties rather than specific, clearly defined threats.…”