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Continuities and Change in IPE at the Start of the Twenty-first Century Read chapter Read first chapter

2019 | OriginalPaper | Chapter

2. Financial Statecraft

Author : Leslie Elliott Armijo

Published in: The Palgrave Handbook of Contemporary International Political Economy

Publisher: Palgrave Macmillan UK

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Abstract

Financial statecraft traditionally means the use, by incumbent national governments, of foreign assistance and financial sanctions to influence other countries. Armijo’s contemporary definition also includes state efforts, both bilateral and in coalition, to leverage national monetary and financial capabilities for greater voice and authority in global governance, markets, and multilateral regulation. The US’ postwar dominance, resting on economic and military might, established a world order founded in Western, mostly liberal, leadership. Today, China’s rise reflects high domestic savings, investment, and growth, while its persistent balance of payments surplus pushes towards capital outflows. Incumbents in China, and other emerging powers, now will exercise financial statecraft in service of their global and regional visions.

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Footnotes
1
Thanks to Eric Werker for obliging me to clarify this point.
 
2
In 2009, South Africa was not yet a member of the BRICs.
 
3
The discussions in this section and the next draw on ideas developed in Armijo et al. (2017).
 
4
Although collective Western sanctions associated with Iran’s nuclear programme were lifted in 2015, US President Trump has frequently threatened to reimpose them, leading many foreign investors to continue to shun Iran. Haass (2017).
 
5
Chinese flight capital invested in Western countries is also huge, but doesn’t constitute Chinese FS, as these are not government-managed capital flows. The Asia Society estimated that China was the leading foreign real estate investor in the US, with a cumulative US$ 350 billion invested through 2015. Bullough (2017).
 
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Metadata
Title
Financial Statecraft
Author
Leslie Elliott Armijo
Copyright Year
2019
Book
The Palgrave Handbook of Contemporary International Political Economy

Print ISBN: 978-1-137-45442-3

Electronic ISBN: 978-1-137-45443-0

Copyright Year: 2019

DOI
https://doi.org/10.1057/978-1-137-45443-0_2