For centuries, states have used economic rewards, violent means, or a combination of the two to influence the behavior of other states. Yet despite the historic use of positive and negative sanctions, scholars of international relations have not been able to agree on whether one strategy is more or less likely to ensure the intended outcome. Randall Newnham seeks to sort this issue out in an ambitious and finely written volume that focuses on German-Russian relations from the Middle Ages until the end of the Cold War.

Central to Newnham's efforts at addressing the form of economic statecraft that is likely to generate intended results is his introduction of a new typology of linkage strategies. This typology broadens the theoretical horizon that has pre-occupied most studies of economic sanctions and is based on two dimensions. Following in the footsteps of pioneering scholars in the field, such as Albert Hirschman, Klaus Knorr, and David Baldwin, Newnham distinguishes between linkage strategies that aim to award or take away resources from the receiver country (positive or negative sanctions). However, unlike most scholars in the field, he adds a second dimension by distinguishing between influence attempts that directly tie economic awards or punishments to political actions in the target state and influence attempts that are broader in nature and, in many cases, seek changes at a later date. He terms these two approaches specific and general linkage strategies and makes a persuasive case that the latter (such as lending or withdrawing moral support) ought to be given more attention in the study of economic statecraft.

The fourfold typology of linkage strategies (positive general, positive specific, negative general, and negative specific) structures the analysis of 21 case studies of German-Russian relations from around 1850 until 1992. The case studies, including the Bismarckian era, the Weimar period, the Second World War, and the Cold War, are erudite and one of the strongest aspects of the book. The sections on German-Soviet negotiations over the reunification of Germany deserves particular mention for the thoughtful and elegant presentation, including a precise “smoking gun”–type analysis of the conditions under which the Soviet Union consented to German unification. Anyone interested in the diplomacy of unification ought to make Newnham's excellent analysis the place of departure.

The book offers three general conclusions. First, Newnham argues that positive economic sanctions are more likely to achieve intended consequences in target states. Linking political changes in the target country to positive economic incentives has beneficial psychological and spillover effects in target states and tends to increase the willingness of the political and economic elites to alter policy course. However, Newnham cautions against assuming that positive sanctions always work; in many cases, the final outcome will depend upon factors that are not controlled by the initiator state (as was the case several times during the twentieth century when German overtures toward Russia were compromised by the latter's global security concerns). Meanwhile, negative sanctions fail because they create strong resentment in the target state that increases its unwillingness to comply with the intentions of the initiator state. Furthermore, negative sanctions create incentives for third countries to fill the void left by the sanctioning state and thus undermine their ability to influence target states.

Second, Newnham finds no conclusive relationship between the compliance in target states and whether an initiator country employed specific or general forms of linkage strategies. This might seem to negate the value of the typology he has constructed. However, as he makes clear, the distinction is important for it broadens the empirical horizon of statecraft and also helps us to determine more concretely whether positive or negative sanctions are likely to be more successful.

Finally, Newnham offers important observations about competing explanations in the existing literature on sanctions. For example, he argues that the German-Russian case illustrates that relative military strength is often immaterial to determining outcomes in the economic sphere (as long as the militarily weaker state has a deterrent capability), and that the political regime type in the target state is not a conclusive variable in determining outcomes.

Although Deutsche Mark Diplomacy departs in important ways from recent studies of economic sanctions (most obviously in its typology and its focus on only one bilateral relationship), it shares with many studies a bias toward analyzing the politics in the initiator state. Newnham's case studies of German policy are solid, but the analysis of why Russia and the Soviet Union chose to respond in particular ways is not studied with the same vigor. While the German side of the story is anchored in primary research and an exhaustive use of secondary material, the Russian side of the narrative is shorter and relies on secondary sources. One must wonder whether a complete theory of influence, such as one of diverse forms of economic statecraft, does not require equal attention to both sides. To this reader, a theory of why the weaker party responds in diverse fashion over time and areas ought to be an equally integral part of the analysis of any power relation. While it may be beyond the scope of Newnham's study to provide a theory of why Russia responded to German statecraft according to the patterns he illustrates, a theory of influence that lacks a theory of how the target country responds is by some measures an incomplete theory of statecraft. Absent a theory of target state responses, questions of causality arise—including how we know that it was in fact German actions (and not, say, U.S. threats or Russian domestic affairs) that caused Russia to alter its behavior. Although the author is careful when answering this question, only in some case studies is he able to establish a concrete link between German policy and Russian responses (such as in the unification case).

Newnham's typology and solid empirical case material are certain to ensure that his study will become a central text for scholars with a general interest in the topic of state power and statecraft, as well as those with more specific interests in economic sanctions and German-Russian relations. The author is careful not to attempt to generalize too much from the German-Russian case, and he confines his comments about the implications of his analysis for other cases to a few paragraphs. Given the solid nature of his study, however, one would have wished for a longer and perhaps even more speculative discussion about the role of statecraft in the post–Cold War era. The world we live in, as he reminds us, continues to be characterized by the use of positive and negative sanctions of diverse kinds, and while policymakers may not be able to reach an agreement on which form to use, Newnham is well placed to outline a broader agenda for future academic research.