Guns or Money? How Defense Networks and Economic Lending Coevolve in Unexpected Ways

Defense cooperation agreements (DCAs) and government-to-government loans are linked by more than just surface similarities. This article explores how these two forms of economic-cooperation coexist yet can sometimes clash on deeper levels.

At the bilateral level, governments often pursue complementary interests—using one to encourage the other—but their actions also shape broader networks in distinct ways:

• Bilateral Interests: Governments use issue linkages and side payments between pairs of countries to foster mutual benefits across both defense collaboration and economic lending. These interactions aim to strengthen ties through reciprocity.
• Network-Level Effects: DCAs tend to build 'security communities'—groups of nations with shared defense interests—while loans establish asymmetric political hierarchies that can undermine cooperative efforts:
• Highly active borrowers depend on loan networks for geopolitical positioning, potentially undermining the collaborative spirit expected in DCA partnerships
• Governments deeply involved in lending are more susceptible to using financial leverage as a tool for exerting influence incompatible with building equal-defense partnerships
• Conflict Contexts: When one network dominates (e.g., extensive loans), governments may be less inclined or able to foster truly cooperative defense relationships.

The study develops a longitudinal model of multiplex network coevolution that reveals both reinforcing and conflicting dynamics between these two spheres—providing scholars with new insights into the complex interplay between economic cooperation and security collaboration.