The emperor has no clothes. Using economic power for geopolitical ends and geopolitical power for economic ends has now become an explicit and fully acknowledged strategy. The study of this two-way relationship – referred to as “geo-economics” – has made a significant return within the field of economics. While the Nobel Prize recently recognized research into the drivers of economic growth, a recent study by Tianyu Fan, a doctoral candidate at Yale University (“The Geopolitical Determinants of Economic Growth, 1960-2024“), demonstrates that geopolitical factors are a major determinant of growth, a reality that economists had previously underestimated.

According to the study, between 1960 and 2024, the degree of geopolitical alignment with major powers accounted for a variance in gross domestic product (GDP) of between -30% and +30% across countries. For example, the normalization of international relations after the end of apartheid contributed up to 70% to South Africa’s long-term growth.

The main challenge in quantifying the role of geopolitical factors in growth previously lay in measurement problems. Researchers primarily used a country’s voting record at the United Nations General Assembly as a measure of alignment. But this metric is highly imperfect. First, countries with poor bilateral relations might vote together on a resolution about a third country; second, countries often vote in regional blocs or based on strategic considerations; and finally, the number of votes is limited, providing little temporal variability.

Fan adopted a completely different approach. With the help of artificial intelligence and search engines, he meticulously combed through all online archives from media, governments and academic publications. He built a detailed and granular database reflecting, for each country, the quality of its bilateral relations with each of the other 192 members of the UN between 1960 and 2024.

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