The Intersection of Interdependence and Stability

Posted on December 24, 2012


An extract from the paper I presented at the Inter University Seminar on Armed Forces and Society in Kingston, CA.

The National Security Strategy (NSS) of 2010 describes a strategic approach that seeks to leverage the attributes of sturdy alliances, a strong economy (interdependence) and a professional military, a strong and evolving democracy, and a dynamic citizenry (stability) in pursuit of a “just and sustainable international order that can foster collective action to confront common challenges.” The NSS asserts, “…without such an international order, the forces of instability and disorder will undermine global security.” To proceed with this strategic approach it is necessary to define interdependence and stability as well as describe where states are arrayed against the attributes of interdependence and stability.

In their seminal work, Power and Interdependence, Robert Keohane and Joseph Nye establish that interdependence affects the international system and the behavior of the states. They suggest that increased interdependency should reduce inter-state conflict and therefore increase stability in the international system. Their particular emphasis was on the government actions to regulate the international system through international regimes. However, despite the importance of interdependence as a factor in international stability, it is unclear in international relations literature what the precise linkage is between interdependence and domestic stability.

Joseph Nye presents a close association of international interdependence and domestic affairs as the effect of interdependence blurs the distinctions of foreign and domestic policy. He suggested that foreign policy concerns would become domestic policy concerns and that domestic institutions will grow in relationship to international institutions. These distinctions were limited to the question of what national interests would be as dynamics converge; a state’s foreign policy agenda will be affected by domestic policy problems as interdependence sensitivity and vulnerability increases. Therefore, the purpose of this study is to investigate the relationship between interdependence and stability in achieving the objectives of the National Security Strategy (NSS) of 2010. The following hypotheses are submitted:

H1: As a state’s interdependence improves so does its stability.

H2: As the integration of interdependence and stability improves so may the ability to achieve an international order that fosters collective action to confront common challenges.

Using a 176-country and 72-country samples with variables of interdependence and stability collected for 2007, empirical analysis was conducted to determine the relationship between a state’s international interdependency as a determinant of domestic stability. The variables of interdependence and stability populated using data collected from the A.T. Kearny/Foreign Policy Globalization Index, the Swiss Economic Institute Index of Globalization (interdependence) and the Worldwide Governance Indicators (WGI) Project (stability). The applicability of each data set is based on the following definitions of interdependence and stability.

Building on the concept within international political economics, interdependence described here is the aggregate measure of a state’s relationships with others such that each is mutually dependent and/or vulnerable in the international system. Globalization refers to the increase of globalism where globalism refers to the overall condition of the international system that involves networks of interdependence at multi-continental distances. Both interdependence and globalization are multi-dimensional measuring economic, political, military, social/cultural networks and interactions. The data resident in the A.T. Kearny/Foreign Policy Globalization Index and the Swiss Economic Institute Index of Globalization measures each state’s connectivity, contributions, and actions with the international system (interdependence) and neither aggregate the overall condition of the system (globalization). Therefore, these indices are representative of the definition: the aggregate measure of a state’s relationships with others such that each is mutually dependent and/or vulnerable in the international system.

From these indices, two models were created. Model 1 (A.T. Kearney/Foreign Policy Globalization Index) was limited to 72 countries and measured twelve variables which are grouped into four bins: political engagement, personal contact, economic integration, and technological connectivity. Model 2 (Swiss Economic Institute Index of Globalization) included 176 countries and measured twenty three variables which are grouped in three bins: economic, social and political.

For this study, data from the World Bank’s initiative, “WGI Project” was used to create an aggregate measure of state stability. Building on the WGI Project definition of governance, stability is broadly described here as an aggregate measure of a state’s dominant or statutory institutional arrangements by which authority in a country is exercised, the capacity to effectively formulate and implement sound policies, and the respect of citizens and the state for the institutions that govern economic and social interactions among them. The WGI project measured dimensions of governance that include: voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law, and control of corruption.

Empirical analysis of both samples confirms a measure of correlation between the independent variables of interdependence and stability. Evidence of high correlation coefficients implies that improvement in interdependence plays a significant role in improving stability (Model 1: (r = 0.84722) (R2 = 0.7178); Model 2: (r = 0.74506) (R2 = 0.5551)). The coefficient of determination revealed that further study that expanded the sample size to be more representative of the international system resulted in similar outcomes of high correlation.

This initial study limited the sample data to a single year, 2007. Future study should expand the sample size to include a larger time horizon. Data is currently available for the following data sets: Model 1 Interdependence (2003-2007) and Stability (1996-2010); Model 2 Interdependence (2001-2007) and Stability (1996-2010).

This study investigated the relationship between interdependence and stability in achieving the objective of the NSS to shape an international order that can “foster collective action to confront common challenges.” Evidence suggests that improvement in a state’s interdependence improves its’ stability. This insight will be informative in leveraging tools that are resident in diplomacy, development, and defense to target the variables of interdependence. Defense programs that may improve partner nation’s interdependence include: military engagement, security cooperation, security force assistance, foreign military sales and financing, international military education and training, contingency plan shaping activities, and building partner capacity