An Analysis of Economic Warfare

American Economic Review · 2013 · Volume 103 · Issue 3

Abstract

I develop a framework for assessing economic warfare, which describes efforts to undermine adversaries' sources of income. The ability to target adversarial market participants is a primary determinant of the success of such efforts, as is the elasticity of demand in the relevant market. An application of the framework to US efforts to suppress the Afghan opium trade yields pessimistic results. Inelastic demand and poorly targeted enforcement have led these efforts to increase the drug trade resources flowing toward the Taliban.

Keywords

Conflict, Conflict Resolution, Alliances, International Conflicts, Negotiations, Sanctions, Economic Development: Agriculture, Natural Resources, Energy, Environment, Other Primary Products, Formal and Informal Sectors, Shadow Economy, Institutional Arrangements, Agricultural Policy, Food Policy

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