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Foreign influence and domestic policy

Aidt, Toke S; Albornoz, Facundo; Hauk, Esther

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Toke S Aidt

Esther Hauk


In an interconnected world, economic and political interests inevitably reach beyond national borders. Since policy choices generate external economic and political costs, foreign state and non-state actors have an interest in influencing policy actions in other sovereign countries to their advantage. Foreign influence is a strategic choice aimed at internalizing these externalities and takes three principal forms: (i) voluntary agreements , (ii) policy interventions based on rewarding or sanctioning the target country to obtain a specific change in policy and (iii) institution interventions aimed at influencing the political institutions in the target country. We propose a unifying theoretical framework to study when foreign influence is chosen and in which form, and use it to organize and evaluate the new political economics literature on foreign influence along with work in cognate disciplines.

Journal Article Type Article
Acceptance Date Jan 4, 2021
Online Publication Date Jun 1, 2021
Publication Date Jun 1, 2021
Deposit Date Jan 20, 2021
Publicly Available Date Jan 20, 2021
Journal Journal of Economic Literature
Print ISSN 0022-0515
Peer Reviewed Peer Reviewed
Volume 59
Issue 2
Pages 426-487
Keywords Foreign influence; international agreements; institutions; foreign lobbying; aid; sanctions; conflict
Public URL
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