Economists' View of Qatar Cutoff Is a Little Scary - Bloomberg

Economists' View of Qatar Cutoff Is a Little Scary - Bloomberg:

"Experts on international relations typically approach foreign affairs using different tools than economists use. The analysts -- with their knowledge rooted in a deep study of a particular country or region -- deploy complex, interdisciplinary models with many moving parts and less formalism. Economic models of foreign policy are more likely to assume some kind of rational behavior, use more game theory and treat the capture of wealth as a significant political end. Suffice to say, economic models have not taken over the study of international relations, but periodically it is worth checking in to see what they say. And right now there is a big red light flashing: the trade and border shutdowns that Saudi Arabia and six other countries have directed at Qatar, a highly vulnerable nation that imports most of its food. Those events could be the most significant of Donald Trump’s presidency so far. Some reports indicate the Saudis are demanding Qatar cut off links with Iran, limit its ties to Hamas and the Muslim Brotherhood, and shutter the Al-Jazeera news network, among other conditions. Whether or not that exact account is true, clearly the blockading coalition wants concessions and basically has committed some acts of war to demand them. If Qatar gives in, this could begin an unraveling of yet more global alliances. You don’t have to endorse Qatar’s financial support for terrorist groups (not uncommon in the region, by the way) to find that a very disturbing prospect."



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