Modelling Economic Leverage

The United States uses various military, diplomatic, and economic means in dealing with the Soviet Union. This Note examines policies toward the Soviets that apply economic suasion by manipulating international trade. Although alternative suasion strategies are examined, the emphasis is on leverage. The discussion begins with a textbook exposition of how each of the strategies affects the Soviet Union. Next is a selective review of the recent literature on the use and effectiveness of each. Finally, a model is presented of how the strategy of leverage works, and in the context of that model the author discusses some of the factors affecting the likelihood that a leverage attempt will succeed. The Note ends with a chapter summarizing the model, its uses, and its limitations, and the relation of the model to other aspects of research on economic suasion and the Soviet Union.