| dc.description.abstract | Due to the Ukraine-Russia conflict, the US-China trade war, and the COVID crisis there is
increased awareness for the (economic) dependence of countries. This study attempts to
identify the direction and size of the relationship between the foreign policy strategy and the
economic dependency factor of a buffer state. With a case study on six buffer states, this
study answers the following question: how does a foreign policy strategy affect the economic
dependence of a buffer state? The research question is divided into two parts. First, it is
established whether the economic dependency of foreign policies differ via the KruskalWallis test and the Dunn test. The second part elaborates on the contrasts per foreign policy.
These differences are analysed by a regression and a yearly relative change in economic
dependency. Three conclusions are drawn: the foreign policy strategies differ significantly
from each other, there is a positive relationship between the predilection & third-power
strategy and the economic dependency factor, and the volatility of economic dependency is
the largest in the third-power strategy and the smallest in the multivector approach. The
positive relationships show that an implementation of those policies increase the economic
dependence of the buffer state. A higher volatility of this economic dependence can result in a
higher volatility of tax revenue, an unstable domestic economy, and inefficient interest rates.
Policy makers of buffer states but also foreign companies, investors, or immigrants looking to
join the buffer state must incorporate the implications of the chosen foreign policy into their
personal consideration. Further research should be conducted on this relationship to simplify
this consideration for the involved parties | |
