External Ambition and Economic Performance

Abstract

Realist approaches to international politics raise the possibility that external policies based on expanding military power may undermine the economic bases of that power. The links between external strategy and economic performance can be classified as fiscal (macroeconomic effects), structural (microeconomic and structural effects), and protectionist (effects on foreign economic policy). The case of prewar Japan suggests that, for countries at an intermediate position in the international power hierarchy and in the international division of labor, the positive effects of external ambition on economic performance may dominate. Other cases—National Socialist Germany, contemporary developing countries, and the postwar superpowers—seem to confirm that international position is a principal determinant of these effects.