Since the 1950s, international flows of trade, investment, capital, and technology have gradually been liberalized. This process was driven by the ambition to make international resource allocation more efficient and has significantly contributed to the globalization of production, rising incomes, and reduced poverty. However, the liberalization process has now stalled. International economic and security-related conflicts have eroded trust in the idea that national interests can be achieved without government intervention. The actions of many countries today directly contradict the principles that once guided liberalization.
Some examples include:
- The use of tariffs—or threats of tariffs—to coerce trading partners to take actions they prefer not to take.
- Restrictions on the export of strategic goods, services, investments, and technologies.
- Screening of inbound foreign investments to protect domestic industries of particular economic or security importance.
- Use of subsidies and protective tariffs to support key industries.
- Securing access to critical raw materials through bilateral agreements.
Companies are also increasingly factoring in geopolitical considerations. For instance, production is being relocated closer to home or core markets and countries perceived as politically more reliable.
IFN’s Geoeconomics Program analyzes this evolving landscape. Geoeconomics is a rapidly growing field at the intersection of economics and geopolitics, focusing on how economic policy instruments are used to achieve national political or strategic objectives. The program spans several of IFN’s core areas, including international trade and investment policy, industrial policy, and energy and climate policy. It is characterized by a broad methodological approach, combining theoretical and quantitative analyses, case studies, and policy recommendations.
By combining high academic expertise with practical relevance, the research contributes to providing decision-makers in both the public and private sectors with well-founded insights to address future challenges.
Researchers: Fredrik Heyman, Henrik Horn, Martin Ljunge, Erik Lundin, Pia Nilsson, Pehr-Johan Norbäck, Matilda Orth, Fredrik Sjöholm