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Word version of:

Lee, Donna and Brian Hocking (2010) Economic Diplomacy in Robert A.


Denemark (ed.) The International Studies Encyclopedia, Vol. II, pp 1216-1227.
Wiley Blackwell.

ECONOMIC DIPLOMACY

Introduction
International developments are driven by and impact on a number of economic,
social, cultural and political factors - none more so than those relating to the processes
and structures of the world economy. To what extent, if any, does the study of
diplomacy have the analytical tools to highlight and explain major global economic
developments such as regionalization, globalization, and economic development?
This is a question often ignored by scholars of diplomacy but one which those who
study International Relations (IR) are constantly confronting. Mainstream studies of
diplomacy have traditionally approached international relations using realist and
neorealist frameworks (see Lee & Hudson 2004) and this has determined both focus
and approach, resulting in state-centric analyses of mainly political agendas.
Consequently, much of the literature has tended to undervalue economic matters,
failing to reflect on how theories and concepts of diplomacy can explain key
international processes such as imperialism, globalization and development.

In recent years, however, there have been significant ontological and conceptual shifts
in the study of diplomacy. Scholars have highlighted the necessity of understanding
international relations outside the narrow state-centric security nexus. In the light of
this, the essay focuses on how contributors to this developing debate have moved the

study of diplomacy towards a better understanding of the processes and practices of


economic diplomacy. Several scholars have imported analytical tools from other
social science fields and in particular International Political Economy (IPE) and
Business Studies to highlight the importance, and impact, of economic actors and
economic interests to diplomatic practice and processes. In so doing they have
developed new concepts of diplomacy catalytic diplomacy, network diplomacy,
multi-stakeholder diplomacy which provide new tools not only to recognize a
greater variety of state and non-state actors in diplomatic practice but also to highlight
the varied and changing character of diplomatic processes. Diplomacy, in this view, is
not confined to inter-state relations in an international system, but also involves the
social, economic, cultural and political relations among networks of political actors in
formal and informal domestic and systemic environments. In essence the study of
diplomacy has shifted from a focus on the diplomacy of economics in which the key
theme was the economic tools of statecraft to the study of economic diplomacy in
which two themes emerge. The first is that of diplomat as agent in International
Relations (IR) and IPE. The second theme is how to fit non-state and non-foreign
ministry officials into diplomatic agency.

Against this background, the essay highlights how, by focusing on economic matters,
the study of diplomacy has evolved conceptually in order to accommodate key
systemic level processes such as regionalization and globalization, the changes to the
organization of diplomacy within governments and the development of new forms of
diplomatic practice alongside the emergence of `new diplomatic actors.

Economics Matters

Key developments such as the creation of the post World War Two Bretton Woods
institutions (mainly the World Bank [WB] and the International Monetary Fund
[IMF]), the oil crises of the 1970s, the decline of American hegemony, developing
country debt from the 1980s onwards, the East Asian financial crisis in the 1990s, and
the rise of the Chinese and Indian economies in the 2000s, provide evidence of the
high stakes involved in international economic relations as well as their political and
social importance. Such developments can change our understanding of the way the
world works and force major intellectual shifts in IR such as the emergence of
theories of interdependence, hegemonic decline, development, economic and political
transition, regionalization, and globalization. Within each of these intellectual shifts
we see a significant movement away from the narrow focus on states and security
issues towards analysis of the interdependence of economic, social and political issues
as well as the interconnectedness of state and non-state actors in the international
system.

But the literature on diplomacy has been far less influenced by these developments
than has the IR canon more generally. Thus the economic dimensions of diplomatic
practice continue to attract little attention. However, there is growing recognition that
economic diplomacy is significant both to an understanding of the concept and
practice of diplomacy. Not only have we begun to recognize and to explain the
everyday impact of diplomacy in the economic sphere and the role of diplomats in the
development and regulation of markets, we have also begun to examine the role of
diplomats in global economic governance. This is appropriate because, contrary to
some of the governance literature, diplomats remain highly significant players in the
creation and maintenance of the practices and institutions and rules of international

economic relations, Diplomats are often invisible servants of the world economy and
any account of developments in world economic history needs to acknowledge their
role. Equally significant is the lead role that diplomats play in the unnoticed everyday
events in the development of markets, whether that be in selling socks for Britain as
one diplomat described his commercial activities, or negotiating a new loan with the
IMF.

The study of economic diplomacy is concerned not only with the broader diplomatic
agendas as they emerge from the processes of market integration such as high carbon
economy

negotiations,

intellectual

property

rights

bargaining,

e-commerce

agreements, transnational finance negotiations, but also with changes in diplomacy


and especially with the emergence of new modes of diplomacy, new diplomatic actors
and new formal and informal structures of diplomacy. Many of those who study
economic diplomacy are making a conscious effort to address the lack of attention to
these new structural and agency developments by mainstream studies of diplomacy.

The study of economic diplomacy also informs our understanding of the international
political economy in that it forces us to recognize that diplomats (as agents) are
significant actors and part of a dense, yet largely unexplored, network of market
actors in the world economy. After all, as an example, current commercial diplomacy
the promotion of inward and outward investment as well as exports involves the
search for competitive advantage in the world economy by diplomat-business
networks. An IPE agenda that includes analysis of current diplomatic practice with its
emphasis on agency will better expose the connections between human agency and
systemic transformation and stability and thus add to debates about the relationship

between structure and agency in IPE. Those who come to the study of IPE from a
study of diplomacy perspective, are intentionally seeking to signpost the role of
agency in the world economy. Since IPE is predominantly concerned with the
relationship between states and markets, it tends to place emphasis on structures and
process in this relationship rather than agency. By focusing on the role of diplomats as
agents, research into economic diplomacy can provide insights into the political
processes involved in the creation, regulation, and development of markets.

Economic diplomacy scholars focus on the role of diplomatic actors and the linkages,
activities and institutions in which they work as they seek both to create and manage
economic interdependence and dependence. Diplomats are key players in negotiations
to establish market rules and regulations, the dissemination of norms and cultures in
the international economy, the promotion and implementation of economic policies,
and the advocacy of public and private economic interests. And by introducing nonstate actors into the frame through, for example, the concept of catalytic diplomacy,
some scholars of economic diplomacy have been able to bring to our attention the
contests between competing social forces at the domestic and systemic level (see for
example Hocking 1999a, 2004; Lee & Smith 2008; Pigman 1998).

Conceptualizing Economic Diplomacy


The emergence of explicit concepts of economic diplomacy is a relatively recent
development in the study of diplomacy that dates from the 1980s. The key theoretical
issue in the study of economic diplomacy is the extent to which economic diplomacy
is tied to the state and public interests or whether it pertains to a broader range of
social actors and interests. This classic debate lingers, of course, in analyses of

diplomacy per se. It is also at the very root of our understanding of the practice and
purpose of economic diplomacy. If diplomacy is tied to state actors and state interests
then economic diplomacy tends to be limited to the use of traditional diplomatic tools
to achieve the economic goals of the state. Understood in this state-centric realist
framework, economic diplomacy is seen primarily as intergovernmental, conducted
by foreign service officials and as a means for advancing the economic interests of the
state in foreign countries and the world economy. This prominent line of argument in
the conventional view of economic diplomacy sees a constitutive relationship between
diplomacy and state sovereignty, as well as a constitutive relationship between
diplomatic systems and an anarchic system of sovereign states (Barston 1997;
Gardner 1969; Marshall 1997; Watson 1982). Generally diplomacy (including
economic diplomacy) is the means by which states pursue their foreign policies
(Berridge 2002; 3). Economic diplomacy is the pursuit of economic security within an
anarchic international system. A brief review of the contents of the major diplomacy
textbooks shows that economic diplomacy is generally defined as the use of
traditional diplomatic tools such as intelligence gathering, lobbying, representation,
negotiation and advocacy to further the foreign economic policies of the state
(Barston 1997; Berridge 2002; Hamilton & Langhorne 1995; Jnsson and Hall 2005;
Marshall 1997; Watson 1982). At the power play end of economic diplomacy is what
Baldwin (1985) calls economic statecraft which is the strategic use of positive and
negative economic sanctions such as trade embargoes as well as aid programs by
states and other actors such as the United Nations to coerce other states to cooperate
(see also Davis 1999, Hogan 1987; Kunz 1997; Zimmerman 1993). Thus economic
diplomacy conceived in this realist way is concerned with the economic agenda in
diplomacy which can be distinguished from the political agenda. It does not involve a

different type of diplomacy nor a different set of diplomatic actors (see for example
the entry on economic diplomacy in Berridge and Jamess Dictionary of Diplomacy,
2003: 91). And similar concepts such as trade diplomacy and commercial diplomacy
are, for the most part, also conceived in this way.

And yet, as one former Ambassador has written

it is increasingly difficult to distinguish between what is political in diplomacy and


what is economic, and indeed, whether there is a dividing line between the two which
has any validity at all.1

Indeed, some studies have shown that the very origins of diplomacy in most countries
lie in developing cordial relations in order to facilitate trade (see Lee & Hudson
2004). Thailand provides one example. The Thai Foreign Ministrys own account of
its historical development (found on its web pages at www.mfa.go.th) emphasizes
how trade interests in China drove Thai diplomacy in the 13 th Century and Thai
diplomatic relations with Europe in the 17th Century.

The newer approaches to economic diplomacy recognize that diplomacy cannot be


compartmentalized into separate economic and political activity and that, in practical
1

Excerpts from speech by Christopher Meyer, British Ambassador to the United

States,
March 24, 1998, Foreign and Commonwealth Office, The Future of Diplomacy
available at http://britain-info.org/bistext/embassy/24mar98.stm. (accessed May
2000).

terms, most countries would find such a separation simply unworkable. In all
countries economic diplomacy is a key strand in diplomatic strategy and it therefore
becomes necessary for states to develop an integrated or coordinated diplomacy. This
coordinated diplomacy involves a multiplicity of actors and individuals built around
policy networks drawn from several government ministries, including the foreign
ministry , as well as the private and civil sector actors placed in national, regional and
international levels (Hocking 2004). When we think of diplomacy we need to move
beyond simply thinking of the foreign ministry and its officials in overseas missions.
A more useful concept is the `national diplomatic system (NDS). 2 This concept better
captures the diverse and complex nature of coordinated diplomacy. Economic
diplomacy may be driven by the foreign ministry, but it involves those with economic
responsibilities and interests inside and outside of government at all levels of
governance. In the NDS rendering of diplomatic structures and process, the foreign
ministry becomes the integrator or coordinator of diplomacy. That is, working with
partners such as other government departments, as well as business and civil groups
to deliver diplomatic goals. Some countries have developed new institutional
structures within government as a way of formalizing this coordinating role. Australia,
Canada, Fiji and Mauritius, for example, have merged their trade and foreign
ministries into one department as a bureaucratic way of integrating diplomacy. Others
such as the United Kingdom and the Czech Republic, have kept the two ministries
distinct but have created new joint bodies to co-ordinate and facilitate integrated
diplomacy.

The concept of the NDS is developed in Hocking (2007)

In a global, interdependent economy, economic diplomacy subsumes more issues,


thus expanding the potential number of national and systemic players with economic
interests and responsibilities in the diplomatic process (Bayne & Woolcock 2007). In
this understanding of diplomacy it is necessary for scholars to identify the linkages
between this diverse set of public and private actors and interests - that is, the nature
of the diplomatic networks and the relationships between public and private within
diplomatic systems.3 Consequently, changes to diplomatic practice can be understood
in terms of changes to diplomatic networks and to the NDS within states that vary
through time and across issues.

Diplomacy and Globalization

For much of the 20th Century onwards the global economy has become more
integrated either through regionalization or a process many describe as
globalization. Indeed globalization is currently one of the most widely used and
contested - concepts in IR. Some scholars of diplomacy have been fairly slow to fully
address the impact of the process and effects of globalization upon diplomatic practice
and organization.4 This neglect both derives from, as well as exposes, the limitations
of conventional realist approaches to diplomacy already discussed. And yet, as we
have also already indicated, diplomats can be seen as the agents of globalization given
their direct involvement in the creation, development, and regulation of markets and
capital through trade and finance negotiations, as well as commercial activity. In the
context of this changing environment caused by globalization, economic diplomacy
commonly drives the development of qualitatively different diplomatic practices in
3

See Hocking (2002) for a detailed case study of such linkages.


Important exceptions include Langhorne (1995); Hocking (1999a); Moses & Knutsen (2002);
Stemmet (2002).
4

new and existing economic forums. It involves networks of state and non-state actors
at domestic and systemic levels in pursuit of private as well as public interests. 5 These
networks operate in, influence and are influenced by, an increasingly integrated and
interdependent world economy; that is a globalizing economy.

For the purposes of this necessarily brief piece, let us set aside the many critiques of
the concept of globalization and assume that it is primarily an economic process
driven by new technologies which heightens interdependence and integration. Put
simply, globalization means that there is much more economic activity occurring in
national, regional and international markets due to ever increasing flows of capital,
trade, services, people, ideas and information between states, firms and individuals.
Such changes, quite naturally, have increased the need for and significance of
integrated diplomacy to help facilitate as well as manage and govern economic
development and market integration. Furthermore, if we understand globalization to
include higher levels of integration of progressively more competitive markets as a
result of increasing liberalization of international trade and finance, then diplomacy
becomes an important tool for managing increased economic risks and opportunities.
Finally, since globalization is one of many processes (such as regionalization and
dependency) which breaks down the barriers between the domestic and the
international, the agendas of economic diplomacy are found more at the fading
boundaries between international and domestic relations. Climate change, for
example, is an issue that transcends national boundaries yet has enormous economic
implications in relation to low carbon economic growth strategies. Equally interesting
is the need for studies of diplomacy to encapsulate the increasing domestication of
5

See Pigman (2005) for a detailed discussion of some of the new non-state actors in economic
diplomacy.

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diplomacy which results from the breakdown of domestic-systemic barriers in the


world economy. This is encapsulated in the growing concern in NDSs with public
diplomacy. Increasingly, this is seen as more than the management of image such as
the UKs Cool Britannia branding exercise designed to attract foreign direct
investment into the British economy. Public diplomacy also has a broader concern
with promoting the strategic objectives of the state in the economy, such as Canadas
public diplomacy on climate change.6

The impact and significance of globalization for diplomacy has been highlighted in a
number of ways. Here we focus on four key modes of economic diplomacy which are
seen as critical to managing contemporary globalization; commercial diplomacy, trade
diplomacy, finance diplomacy, and consular visa services in relation to increased
migration flows. How has the development of these modes of economic diplomacy
shaped the way we think about who the diplomats are, what diplomats do, and how
they do it?

Commercial Diplomacy

One of the key developments has been the growth of commercial diplomacy within
the NDS (Coolsaet 2004; Lee 2004; Potter 2004; Rana 2004) as well as
internationally (Kostecki & Naray 2007). Globalization in this sense is seen to
increase economic vulnerability and/or opening up new opportunities for trade and
investment growth in the world market. Globalization has also facilitated the growth
of international business and generally increased competitive pressures on business.
The impact on diplomacy is twofold. First has been the institutional impact.
6

For a detailed study of public diplomacy see Melissen (2005).

11

Throughout the last two decades in particular governments have increased


commercial diplomatic activities by increasing funding for export and investment
support in foreign ministry s and other agencies as well as creating new or bolstering
existing institutional frameworks. Second has been the drawing in of private actors
from business. Responding to competitive pressures and the need to find and exploit
new markets for domestic goods and services, commercial diplomacy primarily
involves export and investment support and advocacy for domestic business.
Commercial diplomacy focuses on building networks of diplomats and business
groups based in overseas missions to promote trade and investment as well as
business advocacy.

For many developing countries, commercial diplomacy also

includes tourism promotion as a primary activity. Diplomatic networks provide


commercial intelligence, tourism marketing, business links and partner searches, as
well as business assistance. Conceptually, studies of commercial diplomacy point to
complex organizational networks involving ministries of commerce (often with trade
promotion agencies/departments), trade and finance, in addition to the foreign
ministry. Business groups are also, not surprisingly, key players in these networks and
in many cases are formally placed into overseas missions and consuls through
secondment programs.7 Business involvement is also channeled through other
government departments as well as though links with national and local chambers of
commerce. In this conceptualization of commercial diplomacy, business actors are
merged with the state rather than autonomous and as such both public and private
interests are included in diplomatic representation.

Trade Diplomacy

See Lee (2004) for details of the UK experience of this.

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The scholarship on trade diplomacy has also begun to shape the way we re-think
diplomacy by highlighting the role of non-state actors, networks, ideas and
institutions in diplomatic processes and outcomes. New ways of conceptualizing
diplomacy have emerged from studies of trade. Developments in international trade
relations such as the growth of regional trade organizations, the creation of the World
Trade Organization (WTO), the extension of the trade talks agenda to include new
issues such as internet gambling, highlight the need to recognize and understand the
new actors, new topics and new forums of economic diplomacy point to the necessity
of moving beyond the predominant realist conception of diplomacy. Earlier
conventional classic studies of trade diplomacy such as Curzon (1965) and Hudec
(1975) provide state-centric accounts of power-based diplomacy in the General
Agreement on Tariffs and Trade (GATT). This is not surprising given the
intergovernmental nature of the GATT/WTO regimes. Recent work continues to
emphasize the roles of states in trade diplomacy but also points to the role of non-state
actors in multilateral, regional and bilateral trade relations (Hocking and McGuire
2004; Heron 2007; Pigman 2004). Indeed, in an early attempt to reconceptualize
diplomacy in order to reflect the growing interaction of the foreign ministry with
other non-state actors Hocking (1999b) developed the concept of catalytic diplomacy
to highlight the growing linkages between official and non- official diplomatic actors
in diplomatic machinery.

The world economy is now governed by a set of economic institutions with rules and
procedures. With the creation of the WTO in 1995, trade between states is
increasingly governed by international rules which have to be negotiated and
implemented. The first decade of the 21st Century has also witnessed an increase in

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the number of bilateral free trade agreements between states which, added to the
network of regional trade agreements such as North American Free Trade Agreement,
the European Union, Southern African Development Community, and South Asian
Association for Regional Cooperation all extend the agenda and need for trade
diplomacy. Much of the literature on trade diplomacy focuses on multilateral trade
negotiations and particular providing detailed accounts of GATT/WTO Rounds
(Croome 1999; Lee 1999; Lee & Wilkinson 2007; Winham 1986). Trade diplomacy is
often regarded as a zero sum game of hard intergovernmental bargaining between
rational-actor states in pursuit of maximum concessions from others whilst conceding
little as possible (Odell 2000; Steinberg 2003). Much of our understanding of the
diplomacy of economic negotiations has been imported from prominent IPE scholars
such as John Odell. Odell (2000) makes use of game theoretical models to tease out
the diplomatic processes involved in negotiations in the world economy in order to
explain cooperative behavior bargaining and outcomes among self-interested states in
forums such as the WTO.

Adopting a similar neo-liberal game theoretic approach, Putnum (1988) has been
influential in highlighting the importance of domestic as well as international factors
in international economic negotiations. In this seminal work he developed the highly
influential concept of two-level games8 and, with others, also introduced the concept
of double-edged diplomacy (Evans et al. 1993) to highlight how

diplomatic

processes involve bargaining at both domestic and systemic levels, as well as the
opening up of economic diplomacy to include legislators and, consequently, domestic
based interest groups. This work usefully details the complicated diplomatic process
8

Level I refers to international bargaining and Level II refers to domestic level bargaining between
interest groups.

14

in international economic negotiations in which diplomats must not only negotiate


with other states at the systemic level but also negotiate with powerful political actors
back home in the national sphere. In so doing he highlights the endogenous and
exogenous sources of diplomatic processes and practice.

Putnams insights into the domestic context of trade negotiations at least begin to
recognize the conflicted nature of states interests in trade diplomacy. Stopford and
Strange (1991) also highlight these conflicts within states by underscoring the
complex and dynamic character of trade relations in a continuously changing
international political economy structure {cross reference to IPE and negotiation
theory}. In drawing in the changing structural context to economic diplomacy they
successfully challenge the assumption built into rational actor models of trade
diplomacy that state interests can be fixed and, indeed, known. Stopford and Strange
conceptualize economic diplomacy as triangular dominated by state-state, state-firm
and firm-firm relations. In this triangular diplomacy business diplomats are key
players and a strategically successful state will seek allies with powerful firms to
increase its structural power. Langhorne (2005) has referred to the ambassador-like
role of the CEO of Microsoft Bill Gates, for example, in his study of the growing
influence of transnational firms in contemporary diplomacy. One of the key issue
areas where transnational business has been active in trade diplomacy is in intellectual
property rights (IPRs). Susan Sells seminal work on IPR negotiations demonstrates
not only the large number of

players (business, states, lawyers, inter-state

organisations, IP users) involved in the negotiations but also that the network of
players functions quite differently from one period to another as the nature of, and
conflicts within, the issue changes (Sell 2003). Business groups were, for example, a

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key promoter of the 1995 WTO Agreement on Trade Related Aspects of Intellectual
Property Rights (TRIPs) during the Uruguay Round talks in order to protect their
knowledge capital, whereas when the issue shifted to one of global public health in
the Doha Round9 business groups retreated and public health NGOs became the
prominent actors {cross reference to IPE section}. As the issue of IPRs clearly shows,
it is important not to limit our conceptualization of agency in trade diplomacy to states
and firms.

Other influential studies of trade diplomacy suggest an even more complex process of
trade negotiations. Hocking (2004) introduces the concept of multi-stakeholders to
the study of economic diplomacy to highlight the growing involvement of private
actors. In trade diplomacy, business is seen to operate within and merge with the state
such that the distinction between public (state) and private (business) interests is
difficult to draw.

International trade governance has become increasingly contested since the infamous
Battle of Seattle at the 1999 WTO Seattle Ministerial Meeting. Other actors such as
NGOs and civil protest groups have been drawn into trade diplomacy as part of this
contestation. Some are directly involved in the negotiations (Oxfam and International
Centre for Trade and Sustainable Development are often members of smaller and
developing country delegations because they can provide much needed expertise and
resources)10. Others form highly visible protest groups challenging the WTO process
(which is seen as undemocratic and unaccountable) as well as the dominant neo-

Following the Doha Declaration on the TRIPs Agreement and Public Health in 2001.
The home pages of both these NGOS offer detailed insight into their involvement in trade diplomacy.
For Oxfam go to www.oxfam.org and for the ICTSD go to www.ictsd.org.
10

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liberal ideas which, they argue, create poverty in developing countries and increase
inequality between the powerful industrialized countries and the powerless less
developed countries (Scholte et al. 1999; Wilkinson 2006).

The study of trade diplomacy has certainly improved our understanding of the WTO
process and the workings and effects of institutional environments on trade talks
whether it be the very detailed discussion of WTO negotiations (see Jawara & Kwa
2004) or the more historical institutional approach of Wilkinson (2006). Studies of the
recent emergence of developing countries in WTO negotiations (Clapp 2006; Narlikar
2003) are also significant not least because they bring a welcome move away from a
focus on the major industrialized countries, thereby making the study of diplomacy
more inclusive.11 In this context there has also been recent analysis of the diplomatic
strategies mainly focusing on strategic alliance building of the new coalition
groups within the WTO such as the G20 and the Africa Group (Lee 2006; Narlikar &
Tussie 2004; Taylor 2006) which usefully discusses and draws attention to the
diplomatic practices of otherwise neglected countries in the study of economic
diplomacy such Brazil, India and many African states, the BRICSAM states 12
(Antiewicz & Whalley 2005) as well as regional organizations such as the Caribbean
Community, the East African Community and so on.

Finance Diplomacy

11

Retired Indian Ambassador Kishan Rana (2002; 2005) has added a notable Indian perspective to the
study of contemporary diplomacy.
12
The BRICSAM countries are The ASEAN countries, Brazil, China, India, Mexico, Russian and
South Africa.

17

Another key issue area in the global economy is international finance and in the
context of globalization, finance diplomacy is mainly concerned with attempts by
governments to create stability in a regime which lacks the rules and laws of the
international trade regime. Much like studies of trade diplomacy, the literature goes a
long way to shaping a broader conceptualization of economic diplomacy since it
points to the role of non traditional diplomatic actors such as finance ministries,
central banks such as the Bank of England, business groups and the banking sector, as
well as non traditional diplomatic forums such as the World Economic Forum
(WEF).13

Influential work on the Group of Seven (G7) Group of Eight (G8) as well as the IMF
and WB not surprisingly (since G7/G8 summitry is wholly intergovernmental and the
IMF and WB are instruments of governments) tends to reinforce a state-centric
approach to financial diplomacy (Bayne 1998; Budd 2003; Kirton 1999; Wicks 2007).
Most studies of financial diplomacy are concerned with the failure of financial
diplomacy to avert the various financial crises of recent years such as the Asian
Financial Crisis of the 1990s and studies of the IMF and WB generally focus on the
economic effects of the policies of these organizations rather than the diplomatic
process of the negotiations. In one notable exception, Kahler (1993) adopts the twolevel approach to financial diplomacy developed by Putnam to account for the failure
of the IMF to reach agreement with developing countries. Kahler finds Level II
factors within the IMF as well as the recipient countries best explain the failure to
reach agreement despite the apparent structural power of the IMF. Recent
developments such as the G20 meetings of Finance Ministers as well as the now
regular meetings of the fast developing countries and interested parties through the
13

For a detailed study of the WEF see Pigman (2007).

18

newly created BRICSAM organization which is a network of states, NGOs and


business (Cooper et al. 2008) have expanded analysis of finance diplomacy to include
networks of state and non-state actors as well as new regimes.

Migration and Consular Work

One feature of globalization is the increased flow of people across borders. Growing
levels of migration and tourism as well as the enhanced threat of terrorism in the first
decade of the 21st Century have increased the volume and significance of consular
visa services while at the same time redefining and reconstituting the concept of
`consularity (Dickie, 2007). Thus national diplomatic systems are responding to
enhanced population mobility the threat posed by terrorism and organized crime by
locating a police presence in key missions. A recent study of the development of a
common European Union Visa policy has pointed to the changes to the management
of the consular function emerging from this diplomatic collaboration. These include
high levels of intergovernmental cooperation between consular services across Europe
(Fernndez, 2008).

Consular visa services are another example of diplomatic developments facilitating


the merger of the domestic and international arenas of diplomacy in a similar fashion
to the developments in public diplomacy. Studies of visa services again demonstrate
how changes in the world economy such as increasing flows of migrant workers
change diplomacy and the way we view it. Given the transnational and global threat
posed by diseases such as SARS, as well as the need to control the flow of suspected
terrorists across borders visa issuance has become a critical diplomatic instrument to

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facilitate cooperation and signal recognition. Alternatively, non-issuance is a


diplomatic tool to enhance the security interests of the state or part of a coercive
diplomacy strategy to signal protest or non-recognition as in the case of UK visa
policy towards Zimbabwe from 2002 (Stringer 2004).

What then has been the impact of the developments reviewed in this essay? In sum, it
has both empirical and conceptual dimensions. Empirically we are drawn into a wider
(perhaps more representative) world of economic diplomacy covering a broader
agenda and a wider set of diplomatic actors. Conceptually we see economic
diplomacy as a set of formal and informal processes and linkages between publicprivate networks comprising state and non-state actors. Both sets of insights pose
significant challenges for the way diplomacy is analysed and practiced.

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