War on the Rocks

This article is the second in an 11-part series examining how the United States should organize, lead, and integrate economic statecraft into strategy, defense practice, and the broader national security ecosystem. This special series is brought to you by the Potomac Institute for Policy Studies and War on the Rocks. Prior installments can be found at the War by Other Ledgers page. 

Who actually runs America’s economic statecraft?

The answer matters because in today’s great power competition, national security increasingly hinges on economic decisions made across a sprawling federal system — and often outside government altogether.

At its core, economic statecraft refers to the deliberate use of the government’s economic policy tools and authorities to shape the behavior of commercial actors in ways that produce, mitigate, or manage national security externalities. Firms, not states, are the actors conducting global economic activity. The consequences of their transactions — from investment to supply‑chain structuring — often create strategic ripple effects. States can use government policy tools to intervene to align private incentives with national security priorities. This is the essence of contemporary economic statecraft.

What are the roles and responsibilities of the numerous U.S. government players involved in exercising economic statecraft authorities? This discussion about institutional architecture begins by offering a straightforward way to categorize the many authorities associated with economic statecraft. It then maps the landscape of key U.S. government players in this space before closing with several suggestions for how economic tools of national power can be used more effectively.

Read the full article at War on the Rocks.

William Norris, Ph.D., is director of the economic statecraft program and an associate professor at the Bush School of Government and Public Service at Texas A&M University.