Troops or Cash? Analyzing the Interdependencies Between Security & Financial Cooperation

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Date

2017-02-09

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Ohio State University. Mershon Center for International Security Studies

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Abstract

How are defense cooperation and economic cooperation related? Research into this important question has focused primarily on trade and militarized conflict or, more relevantly, trade and military alliances. Yet, these approaches suffer from "apples to oranges" comparisons. Militarized conflict and defense pacts are both intergovernmental phenomena, monopolized by public actors, while trade is largely the realm of private economic actors. Furthermore, existing research is limited to bilateral relations, ignoring the more complex ways in which economics and defense influence one another. This paper introduces two broad innovations. First, we shift attention from trade and conflict to defense cooperation agreements (DCAs) and bilateral loans. Importantly, both DCAs and loans reflect deliberate governmental policies, which facilitates direct comparisons between the two. Second, we conceptualize DCAs and loans as "coevolving multiplex networks." We model not only the simultaneous bilateral relationship between DCAs and loans, but also more complex higher-order influences, where ties to third parties affect governments' willingness to sign defense agreements with, or make loans to, one another. Our analysis reveals that (1) defense and economic cooperation mutually increase the other, (2) countries that are highly active creditors in the loan network make for unattractive defense partners, (3) countries that borrow from the same creditors are more likely to cooperate in defense, and (4) governments tend to make loans to the same debtors as their defense partners. In light of significant changes in the international landscape, such as the rise of China and India as new creditors, this study refines our understanding of how governments wield the dual tools of defense and financial policy.

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The media can be accessed here: http://streaming.osu.edu/knowledgebank/Mershon17/Jonas_Bunte.mp4

Keywords

security, financial cooperation, troops

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