Global Politico-Economic Dynamics during a Local Conflict: Reciprocal Patterns of Cooperation and Sanctions

Reinhard A. Weisser

doi:10.1515/bejeap-2022-0167

Published by De Gruyter October 24, 2022

Global Politico-Economic Dynamics during a Local Conflict: Reciprocal Patterns of Cooperation and Sanctions

Reinhard A. Weisser

From the journal The B.E. Journal of Economic Analysis & Policy

https://doi.org/10.1515/bejeap-2022-0167

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Abstract

Employing global daily news coverage on interactions between stakeholders in G20 countries, this research offers a near-real-time analysis of changing interaction patterns between Russia and other G20 economies after the onset of open military conflict. Building on an event study over eight months, further analyses of reciprocal response dynamics point to potentially costly short-term consequences of sanctions, such as the breakdown and diversion of international cooperation amongst major economies in a broader sense. Once such a reciprocal cooperation decay has set in, re-establishing international cooperation between major societal actors may take considerable time.

Keywords: international cooperation; conflict responses; GDELT; big data

Corresponding author: Reinhard A. Weisser, Department of Economics, Nottingham Business School, Nottingham Trent University, Nottingham, NG1 4BU, UK, E-mail: reinhard.weisser@ntu.ac.uk

Appendix

$Figure A.1: Interaction mode substitution. Results are based on Eq. (1). Reported marginal effects represent the change of substitution probabilities for P a 1 ( m | a 2 ) ${P}_{{a}_{1}}(m\vert {a}_{2})$ in the time since 24/02/2022 compared to the two months prior. 95% confidence intervals are depicted.$

Figure A.1:

Interaction mode substitution. Results are based on Eq. (1). Reported marginal effects represent the change of substitution probabilities for P a 1 ( m | a 2 ) in the time since 24/02/2022 compared to the two months prior. 95% confidence intervals are depicted.

Table A.1:

Variable overview and descriptive statistics.

Variable	Description	N	min	max	mean	95th pctile	std. dev.
Reciprocal responses (A1 @ A2)	Outcome variables, informing how primary actor responds to secondary actor today
Verbal or material cooperation	Substitution probability, P a 1 , t VMCoop \| a 2	90,440	0	1	0.674	1	0.353

	Attention probability, P G 19 ( EU 24 ) ,t RUS \| VMCoop	3,808	0	0.840	0.139	0.413	0.126
Verbal cooperation	Substitution probability, P a 1 , t VCoop \| a 2	90,440	0	1	0.576	1	0.345
Material cooperation	Substitution probability, P a 1 , t MCoop \| a 2	90,440	0	1	0.099	0.429	0.173
Verbal or material conflict	Attention probability, P G 19 ( EU 24 ) ,t RUS \| VMConf	3,808	0	0.881	0.205	0.602	0.191

Past experiences (A2 @ A1)	Explanatory variables, representing how secondary actor interacted with primary actor in the past (14-day moving average)
Verbal cooperation	Substitution probability, P a 2 , t VCoop \| a 1	90,440	0	0.960	0.576	0.796	0.187
Material cooperation	Substitution probability, P a 2 , t MCoop \| a 1	90,440	0	0.524	0.099	0.205	0.061
Sanction imposed	Sanctioning actor’s perspective, P a 2 ( SI \| a 1 )	90,440	0	0.242	0.003	0.018	0.012
	Sanctioned actor’s perspective, P a 1 a 2 \| SI	90,440	0	0.900	0.028	0.155	0.093
Sanction threat	Sanctioning actor’s perspective, P a 2 ( ST \| a 1 )	90,440	0	0.146	0.000	0.001	0.003
	Sanctioned actor’s perspective, P a 1 a 2 \| ST	90,440	0	0.821	0.008	0.063	0.040
Bilateral relevance	Rescaled measure, indicating how important secondary actors are for primary actors (100 corresponds to highest in-sample relevance)
Migration	Total number of migrants from one actor’s country living in the other in 2000 and vice versa, divided by the respective maximum	190	0	100	2.789	11.733	9.015
Trade	Total bilateral trade volume (imports plus exports) in 2020, divided by the respective maximum	190	0.038	100	4.892	27.268	11.283
Distance	Distance between capitals, divided by the maximum, reverse scaling such that the maximum corresponds to the closest pair	190	0	98.651	55.797	94.052	22.974

Reported descriptive statistics typically refer to the G20 definition, including 19 individual member states and the European Union (integrated as the EU24 aggregate without the individually represented members Germany, France, and Italy). Sample size N refers to unique observations on the A1 × A2 × T level.

Table A.2:

Robustness checks for alternative G20 and sanction definitions (any cooperation, A1 @ A2).

G20 def.	43 countries						19+EU	19+EU
Sanction def.	P a 2 ( S \| a 1 )			P a 1 a 2 \| S			P a 2 ( a 1 \| S )	P_S(a₂, a₁)
Past experienced interactions (A2 @ A1)	1 day	7 days	14 days	1day	7 days	14 days	7 days	7 days
Coop. (material)	0.192***	0.545***	0.666***	0.191***	0.543***	0.665***	0.433***	0.433***
	(0.004)	(0.009)	(0.011)	(0.004)	(0.009)	(0.011)	(0.017)	(0.017)
Coop. (verbal)	0.228***	0.598***	0.725***	0.227***	0.596***	0.723***	0.551***	0.550***
	(0.002)	(0.003)	(0.003)	(0.002)	(0.003)	(0.003)	(0.007)	(0.007)
Sanction imposed	0.048	0.184***	0.382***	−0.065***	−0.085***	−0.068***	−0.046***	−0.585***
	(0.030)	(0.058)	(0.072)	(0.006)	(0.008)	(0.009)	(0.010)	(0.047)
Sanction threat	0.193**	0.571***	0.746***	−0.085***	−0.135***	−0.133***	−0.086***	−0.121***
	(0.076)	(0.182)	(0.248)	(0.010)	(0.015)	(0.018)	(0.009)	(0.034)
Obs.	429,828	429,828	429,828	429,828	429,828	429,828	90,440	90,440
R² (adj.)	0.3125	0.3575	0.3703	0.3127	0.3576	0.3703	0.2161	0.2162

***p < 0.01, **p < 0.05, *p < 0.1. Past interactions over the prior 7 or 14 days are moving averages. Estimations are based on the model represented in Eq. (3). The 43-countries specifications include all individual G20 member states plus the 24 EU countries not being individual members.

Table A.3:

Heterogeneous responses of major economies to sanction events initiated by other actors.

Past experienced	EU27		USA		CHN		RUS		Other G20
interactions (A2 @ A1)	Verbal	Material	Verbal	Material	Verbal	Material	Verbal	Material	Verbal	Material
Sanction imposed	−0.112***	0.039**	−0.061***	0.033***	−0.163***	0.019	0.189***	−0.015	−0.079***	−0.032***
	(0.028)	(0.016)	(0.023)	(0.011)	(0.030)	(0.019)	(0.051)	(0.025)	(0.015)	(0.009)
Sanction threat	−0.043**	0.027***	−0.040*	−0.047***	−0.048	0.024	−0.109***	−0.013	−0.031	−0.032
	(0.017)	(0.011)	(0.022)	(0.012)	(0.069)	(0.044)	(0.035)	(0.018)	(0.047)	(0.024)
Obs.	3,808	3,808	3,808	3,808	3,808	3,808	3,808	3,808	49,504	49,504

***p < 0.01, **p < 0.05, *p < 0.1. Sanction definition is P a 1 a 2 | S , taking the perspective of the sanctioned actor. Past 14-day cooperative interaction probabilities, and feasible actor and day FE included.

Table A.4:

Reciprocal overall cooperation for various FE specification.

Past experienced	Baseline (1)	(2)	(3)	(4)	(5)
interactions (A2 @ A1)
Coop. (mat.)	0.579***	0.579***	0.591***	0.096***	0.094***
	(0.022)	(0.022)	(0.023)	(0.026)	(0.026)
Coop. (verb.)	0.686***	0.684***	0.697***	0.191***	0.189***
	(0.008)	(0.008)	(0.008)	(0.014)	(0.014)
Sanction imposed	−0.097***	−0.097***	−0.091***	−0.069***	−0.069***
	(0.010)	(0.010)	(0.011)	(0.010)	(0.010)
Sanction threat	−0.104***	−0.106***	−0.105***	−0.017	−0.019
	(0.014)	(0.014)	(0.015)	(0.015)	(0.014)
Obs.	90,440	90,440	90,440	90,440	90,440
FE specification	A1, A2,	A1, A2,	A1 by week,	A1 by A2,	A1 by A2,
	date	week	A2 by week	date	week
FE number	276	72	1,326	617	413

***p < 0.01, **p < 0.05, *p < 0.1. Sanction definition is P a 1 a 2 | S , i.e. the sanctioned party’s perspective. Past experienced interactions are 14-day moving averages. G20 definition is 19 countries plus EU24. Estimations are based on the model represented in Eq. (3), yet with modified fixed effects.

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Received: 2022-05-02

Revised: 2022-10-03

Accepted: 2022-10-08

Published Online: 2022-10-24

Global Politico-Economic Dynamics during a Local Conflict: Reciprocal Patterns of Cooperation and Sanctions

Abstract

References

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