The Art of Economic Persuasion

Positive Incentives and German Economic Diplomacy
Patricia A. Davis
How the government and private interests in Germany cooperated to create friendly relations with Poland before the fall of communism


Much has been written about a state's use of the threat of military force or economic sanctions to change the behavior of another state. Less is known about the use of positive measures such as economic assistance and investment as a means of influence. This study looks at the ways in which government officials use economic instruments for foreign policy gains. More specifically, it examines the means by which a government can enhance its efforts at economic persuasion by inducing domestic business trade and investing in the target nation. The author demonstrates the domestic conditions under which the state can use commercial economic incentives to achieve foreign policy goals, especially where these incentives are meant to induce cooperative behavior from another state. Using the process of German-Polish reconciliation in the 1970s and 1980s as a case study, The Art of Economic Persuasion, argues that complex institutional links between the German government and the German business community enabled the government to encourage commercial relations with Poland, which supported the government's policies.

With singular access to archives of business associations in Germany as well as numerous interviews with German and Polish officials, the author carefully retraces German foreign policy towards Poland in the 1970s and 1980s.

The Art of Economic Persuasion is a theoretical addition to the literature on international political economy and international relations. It will be of interest to specialists in international relations, foreign policy, and international political economy, as well as economists, political scientists, and historians of Germany, Poland, the United States, and Cold War relations.

Patricia Davis is Assistant Professor of Government and International Studies, University of Notre Dame.

Look Inside

List of Figures          vii
List of Tables          ix
Acknowledgments          xi
List of Abbreviations          xiii
Part 1. The Theory and Tenets of Economic Persuasion
1. Introduction          3
2. Institutional Structures and Linkages: Managed Foreign Economic Policy          25
3. Extracting Domestic Resources: Reward Power          46
Part 2. German-Polish Reconciliation: A Case Study of Applied Economic Persuasion
4. Change through Rapprochement: From Isolation to Resolution          67
5. From Stabilization to Damage Limitation          87
6. From Ambivalent Adaptation to Normalization          105
Part 3. Conclusion
7. The Utility of Economic Persuasion: A Reappraisal          137
Notes          163
Bibliography          183
Index          195

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  • 6 x 9.
  • 216pp.
  • 13 drawings, 5 tables.
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  • Hardcover
  • 2000
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  • 978-0-472-10988-3

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  • $94.95 U.S.

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