geoeconomics

Geoeconomics is an approach to international relations (IR) that treats economics as a, if not the, primary sphere of state competition. A geoeconomic approach to IR is orthogonal to other schools of analysis (e.g., one can be a defense or offensive realist and take a primarily geoeconomic lens or not).

A modern (ca. mid-2020s) geoeconomic approach to IR could start from the following observations:

Domestic and international institutions are emergent economic phenomena. They are formed from individual agents, and individual agents may have the power to change them, but group dynamics can and often do lead to outcomes that run counter to the interests of any particular coalition of agents. Institutions may act monolithically and rationally, as often supposed in IR theory, but might instead act irrationally, or change behavioral patterns in a nonstationary way.

• Area of practice: institutional economics

A central object of study is the complex networked system of international financial, trade, and logistics flows. Financial, trade, and logistics networks are not (except for a few specific instances) separable in analysis without incurring substantial tail risk.

• Areas of practice: financial economics, especially risk management; and capital allocation, especially M&A, workouts, and private equity.

Existing economic mechanisms can be repurposed, knowingly or otherwise, in service of a state's objectives.

• Areas of practice: mechanism, contract, and market design

Useful tools of economic statecraft could result from synthesizing theoretical and practical innovations from these areas of practice.