Economic Diplomacy of Germany, Poland and Lithuania ; Vokietijos, Lenkijos ir Lietuvos ekonominė diplomatija

Abstract

Economic Diplomacy is a big challenge in the modern day world and opportunity. It allows states to create and maintain bonds with other countries in order to benefit its economy, which is important in an era of reoccurring financial crisis. However, different strategies are developed by different states and it is interesting to see what objective characteristics of the country influence Economic Diplomacy practices and how it does so. This research takes a look into three different states in an attempt to investigate how different characteristics, such as relative power, size and historical background, affect Economic Diplomacy decisions and priorities. Germany, Poland and Lithuania were selected for the research as they provide an opportunity for the comparative analysis of the most different cases. At first, this paper considers the theoretical aspect of Economic Diplomacy, defining the term and naming most relevant theoretical approaches to it. Then, main contextual differences between the states included in the study are established. These differences in political system, relative power and size, and historical background allow for more in depth comparative analysis, because it is possible to place results into a broader context, revealing which countries proportionally are doing better. Finally, Economic Diplomacy structures, priorities and outcomes are analysed. Neorealism perspective allows for a better view of power struggles within the global arena of political economy that all these states are incorporated into. The research reveals that Economic Diplomacy in Lithuania was the most broadly articulated from this selection of states. There is a special institution and strategies devoted specifically for this practice. However, as so far, outcomes are relatively poor because of historical context – inefficient governance and undeveloped image do not allow simple solutions to be effective. Poland can be singled out as a relative leader in FDI field, since it manages to attract significant FDI flows as well as become an important FDI source country. Germany is a big power, immersing into global power games. While Poland and Lithuania are looking for investments, Germany is housing many international corporations and is focusing its Economic Diplomacy towards more global goals and expansion of export market. All of these results confirm initial assumption that power, size and historical background are important, power remaining the most significant one.