Hill’s pyramidal relationship between resources, capabilities and instruments seems only helpful on a methodological level since resources of power, which have always been a vague concept for statesman and analysts of international politics, have become more complex. Because we previously accepted the idea of interdependence as a concept capable of explaining the overall structure of international relations as well as outcomes, the relationship between power and asymmetries in interdependence is of great significance for our understanding of cooperation and non-cooperation among states. The idea that asymmetrical interdependence is a new source of power implies nothing more than mutual dependencies on – using Hill’s terminologies - respective resources and capabilities. The concept of dependence in international politics refers, according to Hirschman, to a relationship in which one party needs the benefits derived from a relationship more than the other. 66Hirschman’s analysis of dependence is based mainly on reversing the story illustrating the “gains from trade” in standard accounts of the theory of international trade. 67Yet this concept of “dependence” in terms of opportunity costs for foregoing trade should not be depicted as mere trade dependence since Hirschman drew attention to the intimate link between the concept of “gain from trade” and the concept of dependence.
The influence which country A acquires in country B by foreign trade depends in the first place upon the total gain which B derives from that trade; the total gain from trade for any country is indeed nothing but another expression for the total impoverishment which would be inflicted upon it
65Joseph S. Nye, “The Changing Nature of World Power,” Political Science Quarterly, Vol. 105, No. 2
(Summer, 1990), p .182
66seeAlbert O. Hirschman, National Power and the Structure of Foreign Trade (Berkeley, University of
California Press, 1945)
67seeR. Harrison Wagner, (Economic Interdependence, Bargaining Power, and Political Influence” ,
by a stoppage of trade. In this sense the classical concept, gain from trade, and the power concept, dependence on trade, now being studied are seen to be merely two aspects of the same phenomenon.
68
Hirschman’s aim is to show that the ability of one government to threaten interruption of trade with another can be a means of employing power to demand certain concession from the weaker country. Defining dependence in terms of reliance on others, consequently implies a lack of self sufficiency, which in turns implies that it would be costly for the dependent party to allow changes in the relationship. The capability of one country to change or threaten to change certain patterns of a relationship are in Hirschman’s economic model the ability to manipulate the terms of trade in one’s favour by the use of tariffs and export taxes. Hirschman’s leap from this market power to “relationships of dependence and influence” 69 is made in two steps: First, he points out that if two states in a bilateral trading relationship both have market power, then the equilibrium terms of trade between them depend on the actions of both states, and thus are subject to the same sort of indeterminacy as they would be if the two states bargained directly over the terms of trade. By drawing on outcomes of historical economic negotiation Hirschman attempts to prove that “tariffs are the manifestations of bargaining power under conditions of private trading.” 70 This statement indicates that Hirschman assumes that the same factors that influence a government’s degree of market power also influences the relative bargaining power of states in negotiations over the terms of trade. 71
Second, and this is more relevant to concerns of constructive engagement, he concludes that states who have bargaining power in this sense are not only able to manipulate terms of trade but also to use it to demand political concessions.
The ability to manipulate the terms of trade in one ´s favour depends, indeed, on the gain from trade derived by the trading partners, and the policies we have described are directed precisely to increase this gain. The monopolistic exploitation of a trading partner can then be considered as one of the uses to which the power secured through the influence effect may be put. We are here concerned
68Albert O. Hirschman, National Power and the Structure of Foreign Trade , p. 18 69
ibid, p. 15
70ibid, p. 43
only with the methods and conditions leading to this power, not with its possible uses which may be the reaping of advantages of any kind- military and political, as well as economic. 72
Taking Hirschman’s argument further to economic interdependence between states one can see that what Hirschman calls the “objective gains from trade” are mutual dependencies on respective resources or capabilities, which, according to common liberal parlance, are made possible along the lines of comparative advantage. The commonsense underlying much of the literature on economic dependence tells us that if one actor needs the other’s resources or capabilities more than the other, then the first is in a weak bargaining position.73As Hirschman states:
[…] If we say that the bargaining power of the entrepreneur is superior to that of the non-unionized worker […] we think not only of the differences in bargaining skill, cunning, information, etc, but mainly of the fact that the worker “needs” the entrepreneur more than the entrepreneur “needs” him. This, in turn, means that we are implicitly comparing two utility gains, or at least, the levels of satisfaction of the two opponents if there is no contract.74
If one accepts the fact that control over resources has the potential to affect certain outcomes, with the consequence that a more dependent actor in an interdependent relationship is being determined or significantly affected by external forces, then we have to ultimately agree with Keohane and Nye that asymmetries in interdependence are most likely to provide sources of power and influence. 75 A less dependent actor in a relationship, therefore, has a significant political resource, because changes in the relationship will be less costly to that actor than to its partners. To understand this role of power in interdependence, one must distinguish between sensitivity and vulnerability, whereas the former refers to a commitment to a certain pattern of domestic and international rules and the latter could be defined as an actor’s liability to suffer costs imposed by external events. Sensitivity is measured by the volume of flows across borders, but also by the costly effects of changes in transactions. Keohane and Nye assert
72Albert O. Hirschman, National Power and the Structure of Foreign Trade , p. 26 73
seeR. Harrison Wagner, “Economic Interdependence, Bargaining Power, and Political Influence”, p. 465
74ibid. 466
that the fact that a set of policies remaining constant may reflect the difficulty in formulating new policies within a short time, or it may reflect a commitment to a certain pattern of domestic and international rules. 76 The vulnerability dimension of interdependence refers to the relative availability and costliness of the alternatives available to the actors. 77Thus, whilesensitivity means liability to costly effects imposed from outside before policies have been changed, vulnerability refers to an actor ´s liability to suffer costs imposed by external events even after policies have been altered. 78
Vulnerabilitydependence can be measured only by the costliness of making effective adjustment to a changed environment over a period of time. Manipulating economic or socio-political vulnerability, while providing a source of power and influence for the less dependent actor, however, also bears risks and are likely to lead to counterstrategies.79In line with Dahl’s methodology, A is autonomous of B only if A would suffer from changes in the relationship less than B. If A is less sensitive, and more importantly, less vulnerable, A will be able to exert influence over B. Dependency theorists refer to this as compliance with the core. It describes a situation, in which “ dependent states comply with the foreign policy wishes of the core in exchange for economic rewards or to avoid economic punishments.” 80 Nevertheless, A’s potential autonomy relative to B largely depends on asymmetric control in the relationship, in which B’s sensitivity as well as vulnerabilityis greater than that of A. Since political and economic interdependencies are not static and generally reflect fluctuating political and economic realities in international relations, sensitivities and vulnerabilities are just as fluid and effect respective foreign policy behaviour.
Now, before attempting to distinguish between modes of hard and soft power (or manifest and implicit influence), it is vital to subdivide the spectrum of means of hard power in international relations into two broad categories: coercive and non-coercive. International relations scholars tend to associate non-coercive strategies as the choice of
76Robert Keohane, Joseph N. Bye, Power and Interdependence, p. 11 77ibid, p. 11
78ibid, p. 11 79
ibid, p 14
80Laura Neack, Jeanne A.K. Hey, Patrick J.Haney, Foreign Policy Analysis – Continuity and Change in its
strategy for small and / or less developed states. The means of influence applied in a non- coercive strategy include:
a. Support: A gives B assistance to do something which B wants to do but cannot do for want of the necessary means
b. Stimulation: A demonstrates to B that it is feasible to carry out a certain action at a certain point of time
c. Persuasion: A enables B to come to an understanding of his “true” situation by means of truthful information. Persuasion by rational communication is consistent with the Kantian categorical imperative that one should treat his fellow human beings always as ends in themselves, rather as means to an end.81
Dahl argues that non-coercive forms of power in foreign policy implementation, particularly, rational persuasion, are possibly the only morally permissible means of influence. 82 The fact that manipulative persuasion, various forms of coercion and the physical use of force are commonplace aspects in international relations surely shows that the idea of rational persuasion lacks universal acceptance in international society, however it does not indicate that the concept as such is invalid. On the contrary, constructive engagement in fact stems from this idea. Far from condemning rational persuasion to remain in the idealistic realm of liberalism, engagement suggests that “rational communication” is at the core of engagement between sender and target and should be understood as a concept, which provides the theoretical foundation of constructive engagement. Nevertheless, since there are mechanisms and tools available to a diplomacy of constructive engagement outside the realm of non-coercion, coercive strategies do not contradict rational persuasion if applied sensibly. These include foreign policy tools such as negative sanctions (forms of punishment) and positive sanctions (rewards). In popular political parlance positive and negative sanctions are respectively referred to as the “carrots and sticks” of diplomacy.
81
seePhilip Everts, Guido Walraven (ed.) The Politics of Persuasion: Implementation of Foreign Policy by the Netherlands, (Aldershot, Hants , 1989), pp.77-78; Robert A. Dahl, Modern Political Analysis, p. 45
The foreign policy option of constructive engagement, which essentially is the use of positive sanctions to persuade governments to change certain aspects of their behaviour, has received relatively little scrutiny in international relations literature. On the contrary, scholars and policymakers tend to study and pay more attention to negative sanctions that actively seek to manipulate, harm or diminish the capacities and resources of the target country. Economic sanctions in particular have increasingly become the tool of choice for policymakers to protest or coerce a change in an offending country. 83 The efficacy of sanctions has been subject to extensive debate; in which scholars seek to find an answer to the question of whether economic sanctions actually work in respect to stated policy goals.84
Within the context of an interdependent relationship, it is evident that the sender will have to consider certain basic criteria, which should be assessed when applying negative sanctions during constructive engagement. The first criteria in weighing the use of negative sanctions in a given situation is impact, which is the sheer economic or political damage that sanctions inflict on the target country. 85Quite often, sender countries prefer to employ export rather than import controls. One reason for this choice is that A is able to implement negative sanctions, if A enjoys a dominant market position as supplier of
83In 1997, the U.S. President ´s Export Council reported a total of seventy-three countries that were under
some form of unilateral economic sanctions. For an analysis on the use and efficacy of U.S. laws and executive orders imposing various sanctions against states (in particular Iran and Libya).seeTroy Lavers, “Law as a Smart Bomb or just a limited tool of Coercion: Considering Extra-territorial Economic
Sanctions”, RUSI Journal (October, 2001) Vol.146, No.5, p.17
84In the most extensive study of sanctions, Hufbauer, Schott and Elliott measured success in terms of
achieving stated policy goals. After examining 115 cases in which sanctions were used, Hufbauer concluded that sanctions were successful 35 percent of the time.seeGary C. Hufbauer, Jeffrey J. Schott, Kimberly A. Elliott, Economic Sanctions Reconsidered- History and Current Policy (Washington, 1990), pp.92-93;see alsoRobert Pape, “Why Sanctions Still Do Not Work“ International Security, Vol. 23 (Summer, 1998), pp.66-77; David A. Baldwin, Economic Statecraft , (Princeton, Princeton University Press, 1985), pp-130-144; Concerning British-Iranian relations and the sanctions debate, it should be noted that the imposition of sanctions against Iran by Britain in 1951 (together with covert operations) proved effective for Britain to achieve stated policy goals. The success of sanctions in this historical case mainly derived from the fact that whilst oil rents were fundamental for the survival of the Iranian economy, Britain and other major Western powers were able to substitute oil imports from Iraq, Kuwait and Qatar.seeMakio Miyagwa, Do Economic Sanctions Work? (London, Macmillan Press, 1992), pp.30-33
85
Hufbauer and associates argue that those cases that inflict heavy costs (i.e. destabilization, military impairment, and other major policy change cases) on the target country are generally successful.seeGary C. Hufbauer, Economic Sanctions Reconsidered- History and Current Policy (pp.101-102)
exports rather than as purchaser of imports.86 The United Kingdom, the USA, as well as the EU member states seem to particularly enjoy a dominant position as a manufacturer of military hardware as well as high-technology goods.87 It should, however, also be considered what options B has to reduce the effects of any such trade embargo. The level of vulnerability of B to the trade embargo will also reflect B’s capability to develop alternative sources of supply; to stimulate and diversify domestic production, develop industrial substitutes 88 and, most importantly, attempt to use asymmetries in the interdependent relationship in order to inflict maximum costs to A and thus minimise the overall impacts with regards to A’s desired outcome. The freezing of financial assets held by B in A may carry severe political and legal consequences. Financial sanctions, including deprivation of trade finance, loans, development assistance, on the other hand, may carry more leverage and have, as Hufbauer found, the potential to tilt the political balance towards A’s favour. Unlike, trade sanctions, where the impact is often being diffused through B’s population, financial sanctions, on the other hand, may directly affect policies of the government.89
The second criterion, brought forward by O’Sullivan is the effectiveness of sanctions; that is the extent to which sanctions actually achieve their goal. Whilst impact and effectiveness are theoretically related, they are far from synonymous as the former refers to the sheer economic or political damage that sanctions inflict on B and the latter indicates whether A’s goal had been achieved. Hufbauer’s findings have shown that sanctions which had the most profound economic impact on a country were the ones most likely to achieve their goals. Nevertheless, economic pain does not have to lead to political gain. 90 The “rally around the flag” effect and especially the human suffering91
86seeGary C. Hufbauer, Economic Sanctions Reconsidered- History and Current Policy, p.65
87ibid, for the impact of economic interdependence on British arms exportsseeDavina Miller, Export or
Die- Britain’s Defence Trade with Iran and Iraq (London, Cassell, 1996), pp.2-21
88
Margaret P. Doxey, International Sanctions in Contemporary Perspective, (London, Macmillan Press, 1987), p. 91
89Gary C. Hufbauer, Economic Sanctions Reconsidered- History and Current Policy , p.70
90Maeghan O´Sullivan, Shrewd Sanctions, Statecraft and State Sponsors of Terrorism, (Washington, D.C.,
Brookings Institution, 2003), p. 27
91
for the human impact of UN sanctions on the Iraqi populationseeDenis Halliday, “Sanctions have an impact on all of us” in Middle East Report, No. 209, (Winter, 1998), p.3; Roger Normand, “Iraqi Sanctions, Human Rights and Humanitarian Law”, Middle East Report, No. 200, (July-September, 1996), pp.40-46
associated with a sanction regime, lend support to the claim that constructive engagement together with a sanction regimes, specifically aimed at the government’s ability to manoeuvre (e.g. military adventures, control of financial flows) could produce the expected outcome at less cost to a country’s population.
The third criterion to employ when considering the use of sanctions refers to the cost to the government imposing negative sanctions. Evidently, the imposition of sanctions in an interdependent relationship always imposes costs on A as well as B. Whilst the cost that A suffers from imposing sanctions on B should be taken into the overall assessment of how successful the sanctions regime was, the associated financial, economic and possibly political detriments are also fundamental determinants to A on whether it is wise and desirable to employ them in the first place. A’s decision to employ sanctions or not largely - though not exclusively - depends on A’s own vulnerability on changing the relationship with B. If A’svulnerability is such that A is unable to substitute for the loss of B with available alternatives, A is unlikely to employ sanctions. If, however, A’s sensitivity is such, that it can react quickly to its own implemented changes in the relationship without inflicting costly changes on itself, the use of sanctions against B might seem more desirable.
Within the context of our discussion of constructive engagement (which follows the dictum of “rational persuasion”) the use of positive sanctions seems to offer an overall more holistic approach to maintaining communication and solving problems between