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Grand Strategy and Foreign Economic Policy: British Grand Strategy in the 1930s

Variation in the need for military and political support from military allies affects the degree to which foreign economic policies will discriminate in favor of military allies and against adversaries and other countries. Powers in need of such support will pursue discriminatory foreign economic policies in order to change the configuration of domestic interests to favor not only closer economic relations but also closer political relations. By strengthening domestic support for an alliance, policymakers make it more difficult for their allies to renege on alliance commitments. Stronger political relations in turn reinforce the deterrent effect of the alliance. Because the net strategic benefits from closer relations in their case are lower, powers that can go it alone without support from allies will refrain from discriminatory policies. Shifts in strategic need make it possible to explain variation in the links between security considerations and foreign economic policies within alliances over time and also across alliances. British grand strategy in the 1930s illustrates how shifts in strategic need influence the degree to which foreign economic policies discriminate in favor of potential military allies.