A network approach to geopolitics

Ernest Liu, Stephen J. Redding, Bennett Smith-Worthington and David Y. Yang

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We develop a tractable framework for analyzing geopolitics as a network of coordination and strategic influence. Countries choose geopolitical actions that trade off domestic interests against incentives to align with connected countries. They can exert costly bilateral influence to affect one another's actions. We characterize equilibrium actions and bilateral influence in closed form. Crosscountry differences in domestic interests decompose into latent geopolitical cleavages, each of which the network transmits into geopolitical actions independently of the others. The crosscountry covariance matrices of domestic interests and of geopolitical actions identify the cleavages and their importance, from which we recover the network. We implement the framework using data on United Nations voting and democratic orientation. The inferred network is well approximated by a few dimensions, aligns with external measures of geopolitical ties, and recovers well-known historical cleavages. We undertake counterfactuals for domestic interests and network connections and quantify three notions of geopolitical power.

Keywords: networks; coordination; strategic influence; network games (search for similar items in EconPapers)
JEL-codes: C72 D85 F15 F52 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2026-10-19
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:141793

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