Geoeconomics and conflict: A review and open questions

Eoin McGuirk and Christoph Trebesch

No 2302, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: We examine the intersection of two subfields within political economy: geoeconomics and conflict. Geoeconomics is primarily concerned with the use of "economic weapons " of coercion, while the conflict literature mainly focuses on military weapons and war. We propose bridging these two approaches, focusing on the international dimension of conflict. We start by reviewing the existing literature linking both fields, in particular research on the relationship between trade and war and on the use of geoeconomic tools such as foreign aid and sanctions. We then highlight four main directions for future research. First, we call for a broader view of the geoeconomic toolkit, as rogue leaders do not limit themselves to economic coercion. In addition to economic weapons, future research should also consider more aggressive -and often costlier - forms of intervention short of war, including sabotage, cyberattacks, covert operations, and the sponsorship of terrorism or insurgency. Second, we require a better understanding of how geoeconomic tools affect the likelihood of conflict. Do sanctions, strategic tariffs, or military aid provoke or deter war? Third, more research is needed on the domestic political economy of geoeconomic actions and their link with conflict. When and why do governments and citizens support the use of economic versus noneconomic weapons? Finally, we stress the importance of research on explicitly peacemaking tools of diplomacy, including mediation, security guarantees, and transparency initiatives.

Keywords: Geoeconomics; conflict; political economy (search for similar items in EconPapers)
JEL-codes: D74 F01 F13 F50 F51 H56 N40 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-hpe and nep-inv
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