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date: 19 December 2018

Economic Diplomacy

Summary and Keywords

Mainstream studies of diplomacy have traditionally approached international relations (IR) using realist and neorealist frameworks, resulting in state-centric analyses of mainly political agendas at the expense of economic matters. Recently, however, scholars have begun to focus on understanding international relations beyond security. Consequently, there has been a significant shift in the study of diplomacy toward a better understanding of the processes and practices underpinning economic diplomacy. New concepts of diplomacy such as catalytic diplomacy, network diplomacy, and multistakeholder diplomacy have emerged, providing new tools not only to recognize a greater variety of state and nonstate actors in diplomatic practice, but also to highlight the varied and changing character of diplomatic processes. In this context, two themes in the study of diplomacy can be identified. The first is that of diplomat as agent, in IR and international political economy. The second is how to fit into diplomatic agency officials who do not belong to the state, or to a foreign ministry. In the case of the changing environment caused by globalization, economic diplomacy commonly drives the development of qualitatively different diplomatic practices in new and existing economic forums. Four key modes of economic diplomacy are critical to managing contemporary globalization: commercial diplomacy, trade diplomacy, finance diplomacy, and consular visa services in relation to increased immigration flows. The development of these modes of economic diplomacy has shaped the way we think about who the diplomats are, what diplomats do, and how they do it.

Keywords: international relations, economic diplomacy, state actors, nonstate actors, international political economy, globalization, commercial diplomacy, trade diplomacy, finance diplomacy, consular visa services

Introduction

International developments are driven by and also impact on a number of factors that are economic, social, cultural, and political in nature, none more so than the processes and effects of changes in the structure of the world economy. To what extent, if any, does the study of diplomacy (the “study of diplomacy” is consciously referred to here rather than “diplomatic studies” since the latter may unhelpfully separate diplomacy from the broader literature of International Relations and International Political Economy) 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 and 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 toward 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, multistakeholder diplomacy – which provide new tools not only to recognize a greater variety of state and nonstate actors in diplomatic practice, but also to highlight the varied and changing character of diplomatic processes. Diplomacy, in this view, is not confined to interstate relations in an international system, but is more 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 IR and IPE. The second theme is how to fit into diplomatic agency officials who do not belong to the state, or to a foreign ministry.

Against this background, the essay highlights how, by focusing on economic matters, the study of diplomacy has evolved conceptually in order to accommodate key system-level processes such as regionalization and globalization, the changes to the organization of diplomacy within governments, 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 II 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, indebtedness of developing countries from the 1980s onward, 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 of 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 and toward analysis of the interdependence of economic, social, and political issues, as well as the interconnectedness of state and nonstate 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 to an understanding of both 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 negotiations to achieve a low carbon economy, intellectual property rights bargaining, e-commerce agreements, and 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 a recognition 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 diplomacy studies from an IPE perspective are intentionally seeking to signpost the role of agency in the world economy, something that is often missing from IPE. IPE is predominantly concerned with the relationship between states and markets and 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 to both create and manage economic interdependence and dependence. Diplomats, so the study of economic diplomacy would contend, 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 levels (see, for example, Pigman 1998; Hocking 1999a; 2004; Lee and Smith 2008).

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 (Gardner 1980; Watson 1982; Barston 1997; Marshall 1997). Generally diplomacy (including economic diplomacy) is “the means by which states pursue their foreign policies” (Berridge 2005). 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 (Watson 1982; Hamilton and Langhorne 1995; Barston 1997; Marshall 1997; Berridge 2005; Jönsson and Hall 2005). 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 Hogan 1987; Zimmerman 1993; Kunz 1997; Davis 1999). 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 or a different set of diplomatic actors (see for example the entry on economic diplomacy in Berridge and James’s 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” (Meyer 1998). 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 and Hudson 2004). Thailand provides one example. The Foreign Ministry’s own account of its historical development (found on its webpages at www.mfa.go.th) emphasizes how trade interests in China drove Thai diplomacy in the thirteenth century and Thai diplomatic relations with Europe in the seventeenth century.

The newer approaches to economic diplomacy recognize that diplomacy cannot be compartmentalized into separate economic and political activity, and that, in practical 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” (Hocking 2007). 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 national diplomatic system (NDS) rendering of diplomatic structures and process, the foreign ministry becomes the integrator or coordinator of diplomacy. That is, it works 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 coordinate and facilitate integrated diplomacy.

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 and 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 (Hocking 2007). Then 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 twentieth century and all of the twenty-first century the global economy has become ever more integrated through either 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. This neglect both derives from, and 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 new and existing economic forums. It involves networks of state and nonstate actors at domestic and systemic levels in pursuit of private as well as public interests (Pigman 2005). These networks operate in, are influenced by, and also influence 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) that break down the barriers between the domestic and the international, the agendas of economic diplomacy are found more at the boundaries of international relations. Climate change, for example, is an issue that transcends national boundaries yet has enormous economic implications in relation to strategies for low carbon economic growth. Equally interesting is the need for studies of diplomacy to encapsulate the increasing domestication of 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 UK’s “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 Canada’s public diplomacy on climate change (Melissen 2005).

The impact and significance of globalization for diplomacy have been highlighted in a number of ways. Here we focus on four key modes of economic diplomacy that are seen as critical to managing contemporary globalization: commercial diplomacy, trade diplomacy, and finance diplomacy, as well as consular visa services in relation to increased immigration 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 and Naray 2007). Globalization in this sense is seen to increase economic vulnerability and/or open 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. Throughout the last two decades in particular, governments have increased commercial diplomatic activities by increasing funding for export and investment support in foreign ministries 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 the network and in many cases are formally placed into overseas missions and consuls through secondment programs (Lee 2004). Business involvement is also channeled through other government departments as well as through links with national and local chambers of commerce and the like. 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

The scholarship on trade diplomacy has also begun to shape the way we rethink diplomacy by highlighting the role of nonstate 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), and the extension of the trade talks agenda to include new issues such as internet gambling, highlight the need to recognize and understand new actors, new topics, and new forums of economic diplomacy, and 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 nonstate actors in multilateral, regional, and bilateral trade relations (Hocking and McGuire 2002; Pigman 2004; Heron 2007). Indeed, in an early attempt to reconceptualize diplomacy in order to reflect the growing interaction of the foreign ministry with other, nonstate actors, Hocking (1999b) developed the concept of catalytic diplomacy to highlight the growing linkages between official and nonofficial 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 that have to be negotiated and implemented. The 2000s have also witnessed an increase in the number of bilateral free trade agreements between states, which, added to the network of regional trade agreements such as the North American Free Trade Agreement, the European Union, the Southern African Development Community, and the 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, in particular providing detailed accounts of GATT/WTO rounds (Winham 1986; Croome 1999; Lee 1999; Lee and Wilkinson 2007). For many, trade diplomacy is a zero-sum game of hard intergovernmental bargaining between rational-actor states pursuing maximum concessions from others while conceding as 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 neoliberal game theoretic approach, Putnam (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 games” (Level I refers to international bargaining, and Level II refers to domestic-level bargaining between interest groups). With others, Putnam 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, domestically based interest groups. This work usefully details the complicated diplomatic process 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 it highlights the endogenous and exogenous sources of diplomatic processes and practice. Putnam’s 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. 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 as powerful as states 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 chief executive 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 Sell’s seminal work on IPR negotiations demonstrates not only the large number of players involved in the negotiations (business, states, lawyers, interstate organizations, users of intellectual property), 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 was, for example, a 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 business knowledge capital, whereas when the issue shifted to one of global public health in the Doha Round (following the Doha Declaration on the TRIPS Agreement and Public Health in 2001) business retreated and public health nongovernmental organizations (NGOs) became the prominent actors. 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. In a key ontological move away from structural accounts of trade negotiations, Hocking (2004) highlights the many other actors involved, reflecting the “multi-stakeholders” in economic diplomacy. Similar to commercial diplomatic process, business is seen to operate within and merge with the state in trade diplomacy processes such that the distinction between public (state) and private (business) interests is difficult to draw.

International trade governance has become an increasingly contested area since the infamous “Battle of Seattle” at the 1999 WTO Seattle Ministerial Meeting. Other actors have been drawn into trade diplomacy as part of this contestation. NGOs such as Oxfam and the International Centre for Trade and Sustainable Development have become critically engaged with the WTO process as participants involved directly in negotiations, often as members of smaller and developing countries’ state delegations because they can provide much needed expertise and resources. Other actors participate as highly visible protest groups challenging the WTO process (which is seen as undemocratic and unaccountable) as well as attacking the dominant neoliberal ideas which, it is argued, 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 and Kwa 2004) or the more historical institutional approach of Wilkinson (2006). Studies of the recent emergence of developing countries in WTO negotiations (Narlikar 2003; Clapp 2006) 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 (Rana 2002; 2004). 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 (Narlikar and Tussie 2004; Lee 2007; Taylor 2007). This work usefully discusses and draws attention to the diplomatic practices of countries otherwise neglected in the study of economic diplomacy, such as the BRICSAM states (the BRICSAM countries are the members of the Association of Southeast Asian Nations, and Brazil, Russia, India, China, South Africa, and Mexico) (Antkiewicz and Whalley 2005), as well as regional organizations such as the Caribbean Community (CARICOM), the East African Community, and so on.

Finance Diplomacy

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 and prosperity 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 toward shaping a broader conceptualization of economic diplomacy since it points to the role of nontraditional diplomatic actors such as finance ministries, central banks such as the Bank of England, business groups and the banking sector, as well as nontraditional diplomatic forums such as the World Economic Forum (Pigman 2007).

Influential work on the Group of Seven (G7) and 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; Kirton 1999; Budd 2003; 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 two-level 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 newly created BRICSAM organization, which is a network of states, NGOs, and business (Cooper et al. 2007), have expanded analysis of finance diplomacy to include networks of state and nonstate actors as well as new regimes.

Immigration and Consular Work

One feature of globalization is the increased flow of people across borders. Migrations, coupled with the increased threat of terrorism in the 2000s, have increased the volume as well as the 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 and 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 (Fernández 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. In view of 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 facilitate cooperation and signal recognition. Alternatively, nonissuance is a diplomatic tool to enhance the security interests of the state, or part of a coercive diplomacy strategy to signal protest or nonrecognition, as in the case of UK visa policy toward Zimbabwe from 2002 (Stringer 2004).

Conclusion

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 public–private networks comprising state and nonstate actors. Although, as conventional approaches have been quick to point out, there is a danger here in that “anyone can be a diplomat in this conceptualization of diplomacy” (see Langhorne 1997; Sharp 2001) and that if one goes too far in this direction then economic diplomacy as something distinct from international economic relations simply disappears.

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International Centre for Trade and Sustainable Development. At www.ictsd.org, accessed Apr. 2009. Offers detailed insight into the involvement of NGOs in trade diplomacy.

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Clingendael Discussion Papers in Diplomacy. At www.clingendael.nl/cdsp/publications/discussion-papers/archive.html, accessed Apr. 2009. The publications of the Clingendael Institute in The Hague include a number of papers on economic and commercial diplomacy.

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Georgetown University’s Institute for the Study of Diplomacy. At www.guisd.org/, accessed Apr. 2009. Over 50 case studies that can be used for teaching economic diplomacy can be purchased from this site.