Though much research has focused on major political and humanitarian consequences of economic sanctions, little is known about how economic sanctions affect economic rights and freedoms in target countries. Often, sanctions work is divided into two main theoretical camps: direct economic effects and indirect human rights effects. These two bodies of work have significantly expanded our cumulative knowledge around economic coercion, but scholars in each camp primarily speak past one another while rarely drawing together the interrelated threads of direct and indirect sanctions effects. We challenge this common division by examining the extent to which economic sanctions imposed by the European Union, the United States or the United Nations affect labour rights practices. We posit that sanctions, as a direct shock to target economies, will prompt more labour rights violations at the workplace, such as arbitrary firings and the use of child or forced labour. We maintain that sanctions also undermine labour conditions via adverse indirect effects on human rights, civil society and bureaucratic capacity. Results from a time‐series cross‐national analysis lend strong support for the proposition that sanctions are significantly and directly related to worsened labour rights conditions. We further show that sanctions also indirectly contribute to labour rights violations through negative effects on human rights conditions and reduced bureaucratic capacity in target countries. Overall, our study deepens our understanding of the complicated outcomes of sanctions on individuals in target states and illustrates the need for further exploration into the interwoven effects of this popular policy tool.

Since the initiation of its Belt and Road Initiative, China’s economic statecraft has drawn considerable attention in academic circles. Yet less attention has been given to why the Chinese leadership first chose to pursue its national interests through economic means in the post-Mao period. This underexplored part of China’s economic statecraft can serve as a useful starting point to understand China’s foreign economic policies on their own terms. Employing a neoclassical realist framework and surveying statements made by Chinese leaders throughout the reform era, this study argues that the country’s leaders have gradually modified the strategic importance of the country’s economic statecraft in response to changes in their perceptions of the world order. Meanwhile, China’s form of economic statecraft has largely been determined by reform of its state-owned enterprises in the domestic realm.

How does China use development finance to gain influence in international organizations? Leveraging the exogenous rotation of ASEAN and African Union Chairmanship, I estimate the effect of regional leadership on Chinese commitments. Results suggest that Chinese projects are politically motivated only when the lending and recipient entities are linked to the Chinese and host governments. Governments that assume the Chair received seven times more commitments from Chinese government agencies relative to non-Chair years, a $90 million increase for the average project. By contrast, there is no evidence to suggest that Chinese banks act as agents of Beijing. Moreover, I find a consistent null relationship between temporary UN Security Council status and Chinese finance, unlike established findings about Western donors, suggesting that China is deliberately seeking regional influence. These results underscore the importance of considering the specific actors involved in China’s economic statecraft.

Geopolitical competition between the United States and China has led to an increased reliance on economic statecraft. In this context, understanding the conditions that trigger trade, aid, or investment weaponization becomes crucial. This article examines how the United States has employed economic statecraft in response to Latin American countries’ engagement with China. The study revisits the theoretical debate on positive and negative economic statecraft and proposes a mechanism that identifies the conditions under which “carrots” or “sticks” are more likely to be employed. We argue that the US response towards Latin American countries’ engagement with China tends to prioritize economic engagement over economic coercion, particularly when dealing with countries that are politically and economically aligned with Washington policies. To test our argument, we adopt a mixed-methods approach. First, we conduct a case study analysis on the United States-Panama relationship. Second, we perform a statistical analysis to assess the impact of economic engagement with China on the allocation of American foreign assistance in the region.

This paper explores the motives and mechanisms behind data localization implemented by states to protect data, which is essential to emerging technologies such as Artificial Intelligence. Despite the significant negative aspects of data localization for states, the practice has become increasingly prevalent, leading to the unexplored question of why states choose to implement it. This suggests that data localization is a form of economic means derived from digital technologies and employed by states to serve political objectives. Focusing on the data in platforms, the theoretical mechanism of data localization is captured in light of two factors: network perception and security externality. Network perception pertains to a state’s perception of the positive network effect generated by platforms, while security externality refers to a state’s consideration of the security implications in relation to the economic benefits derived from the positive network effect, serving the national interest in domestic and/or international contexts. To substantiate these theoretical propositions, the paper employs a comparative case study approach where Vietnam, Singapore, and Indonesia have been chosen as empirical cases based on the selection strategy. The paper bridges the concept of economic statecraft with digital technologies, fosters interdisciplinary discussions, and offers policy implications.

Faced with a changing geopolitical environment, the European Union has embarked on a legislative program to upgrade its unilateral trade instruments toolbox. By reforming existing instruments—for example, anti-dumping—and by adding new instruments to the European Commission’s toolbox (foreign subsidies instrument, international procurement instrument, anti-coercion instrument, and others), the EU legislature is significantly strengthening the position of the Commission in the governance of unilateral trade policy in the EU. This development raises accountability questions. By means of a comparative analysis of democratic accountability in unilateral trade policy in the United States and the EU, I describe this transformation of executive power in the EU and I argue that a further strengthening of democratic accountability mechanisms is needed to match the Commission’s growing responsibilities in this underexamined corner of EU trade policy.

Chinese cross-border investments are often assumed to be state driven and a tool of Beijing's economic statecraft. However, corresponding evidence remains inconclusive. This article examines mainland Chinese direct investments in Taiwan and finds that they are not particularly effective tools of economic statecraft. Their excessive politicization and the sheer possibility that investments could be used for Beijing's economic statecraft resulted in a considerable pushback by Taiwan's government, bureaucrats and civil society against large and sensitive investments. The agency enjoyed by Taiwan hindered Beijing from deploying cross-Strait direct investments for political purposes, and Beijing has not openly promoted or supported such investments in Taiwan. Moreover, cross-border direct investments are by nature less exploitable for political purposes because they involve company-level commercial and entrepreneurial decisions. This sets them apart from other forms of economic statecraft, such as sanctions or trade restrictions, where the state has greater influence. Mainland Chinese companies have had limited commercial interests in Taiwan, and the investments that have been made there do not appear to have triggered significant political or security externalities. These findings suggest more generally that foreign direct investment might not be particularly effective as a tool of economic statecraft.

This article develops a conceptual framework for explaining variation in the United States’ economic statecraft in the Cold War and the present day, focusing on how US officials perceived the type of geoeconomic capability that its rivals possessed and the type of national security challenge that they posed. This framework specifies four ideal-type strategies on the part of the United States: economic containment, national economic competition, technological containment, and national technological competition. Analyses of U.S. strategy toward the Soviet Union, China, and Japan support the theory. These ideal types explain why, in the rivalry with Japan in the 1980s, the United States openly engaged in competition but did not adopt containment, relying on Voluntary Export Restraints, currency devaluation agreements, and bilateral semiconductor agreements rather than placing Japan on something historically analogous to the Commerce Department's contemporary Entity List or targeting Japan with comprehensive export controls through an institution like CoCom. These ideal types (and the theory behind them) also explain why the United States has implemented containment measures against specific Chinese companies but has not pursued a systematic “decoupling” of the US and Chinese economies.

The Belt and Road Initiative (BRI), and China's state-led model for economic globalization more generally, have attracted controversy: Are state-led overseas investment and lending driven by strategic motives or market rationale? How have the recipient economies reacted to the influx of Chinese capital? This special issue sheds light on these questions by first outlining the fragmented state system driving the BRI, a system featuring both Beijing's strategic logic at the top and market considerations in policy implementation. The role of the state is unpacked further in China's globalizing coal industry and in the growth of Chinese industry export to BRI countries. Finally, the issue explores the mechanisms behind public backlash and political pushback facing China in Zambia and Australia. As the COVID-19 pandemic continues to shift China's relationship with the world, this special issue contributes to a more nuanced understanding of the modus operandi of Chinese capital going global.

With the globalization of Chinese capital, economic statecraft has become an increasingly prominent component of China's foreign policy. In this article, I examine China's use of economic inducements in developed democracies, a topic of growing concern for policymakers, focusing on the case of Australia. I show how Beijing's attempts to coopt public voices and influence Australia's foreign policy using non-transparent political donations and academic funding generated a strong backlash. At the same time, economic interdependence has provided a buffering effect, with key domestic actors in Australia advocating for cooperative relations, although this effect can in turn be limited by Beijing's coercive economic tactics. My findings underline the reputational costs of certain approaches to economic statecraft, the value of building supportive coalitions, and the challenges faced by China's authoritarian state capitalist model. They also highlight the impacts of globalized Chinese capital in developed democracies, including the resilience and vulnerabilities inherent in democratic political processes.