The Art of Economic Persuasion: Positive Incentives and German Economic Diplomacy

Notes

Notes Chapter 1 1. Some of the most de‹nitive works on the art of force are those by Thomas Schelling, including Arms and In›uence (1966) and The Strategy of Con›ict (1963). Regarding coercive diplomacy the seminal works by Alexander George are still setting the tone. See his coedited volumes The Limits of Coercive Diplomacy (1971) and Force and Statecraft (with Gordon Craig; 1990). The continued relevance of Coercive Diplomacy is con‹rmed by its recently revised edition, appearing in 1994. 2. I take the concept of persuasion from Nelson and Eglinton (1993) who apply it in terms of linking aid conditionality to a broad spectrum of desired reforms in the developing countries. However, for them persuasion relies almost exclusively on diplomatic techniques: “Persuasion can take the form of direct discussion between diplomats or technical experts, or less direct forms such as seminars or joint research” (28). Yet their desired outcome is the same as mine in that it is noncoercive , i.e., it persuades the target government that the desired behavior is in its own best interest. 3. My discussion of the concept and utility of economic persuasion has been drawn mainly from contemporary works, including Mastanduno 1992; van Ham 1992; Hanson 1988; as well as Hanson, “Soviet Responses to Western Trade Policies ,” paper presented at the Annual Meeting of the International Studies Association , London, England, March 29–April 1, 1989; Rode and Jacobsen 1985; and Baldwin 1985. 4. Hanson does, however, generate one fallacy in his study. He abruptly maintains that “economic aid in the conventional sense is simply not a part of EastWest economic relations” (1988, 8). I argue this interpretation is too narrow as the case of German-Polish relations illustrates. 5. Freeman (1997) develops a similar conception of economic persuasion. He speaks of strategic versus tactical uses of economic measures. A strategic use serves the purpose of “bolstering the independence and enhancing the national strength and potential of another state” whereas a tactical use would include applying commerce as a lever to “move foreign leaders’ minds” (47). 6. This will become clear in my analysis of Bonn’s behavior after the imposition of martial law in Poland in 1981 (see chapter 5). By only halfheartedly supporting sanctions against Poland and the Soviet Union, Bonn damaged its image as a reliable NATO ally, but at the same time it also demonstrated Bonn’s prudent recognition of the need to come to terms with Soviet in›uence in Eastern Europe, as well 163 as with Poland’s internal problems. Moreover, such ambivalent behavior allowed Bonn to maintain its reputation as a reliable trading partner and supporter of détente in Europe. 7. For more sophisticated discussions of the “three faces of power,” see Elkin 1987; Gaventa 1980; Lukes 1974; Bachrach and Baratz 1962; and Dahl 1961. 8. One of the more astute observers of the German political scene noted as late as 1989 that the question of German uni‹cation had been transformed from an issue of enlarging territory into merely an issue of enlarging human contacts (Hanrieder 1989). 9. Theo Sommer, “Aus dem Bollwerk in die Zukunft,” Die Zeit (Hamburg), June 2, 1989, quoting Lord Ismay, ‹rst General-Secretary of NATO. 10. Francois Mauriac, as cited in Hanrieder 1989, 138. 11. Not the least of these tangible costs is the fact that over one-fourth of Poland’s $42 billion debt with the West in 1990 was owed to private German banks and the federal government in Bonn. Of‹cial from the German Federal Ministry of Finance, Division of East-West Finance, interview by author, May 9, 1990, Bonn, Germany, tape recording. 12. These are what Peter Katzenstein refers to as “para-public institutions.” The term comes from his analysis of public policy making in Germany, Policy and Politics in West Germany: The Growth of a Semisovereign State (1987) and is discussed more fully in chapter 3. 13. That business was dissatis‹ed with the prevailing national strategy of economic isolation is evident in the fact that the umbrella trade association for ‹rms active in Eastern Europe came out in support of the Social Democratic Party in the elections of 1969 precisely because it supported the SPD’s platform of normalized political relations with Eastern Europe. Given the SPD’s institutionalized opposition to the positions of business, this was a very unusual stance for business to take. Chapter 2 1. Such interpretations are not binding for the treaty partner, however. An example of such...