The Politics of Information in an Age of Economic Coercion

Guillaume Beaumier, Abraham Newman, and Rong Qin

Abstract Global communication flows increasingly face efforts to renationalize information and its control. Most notably, countries from around the globe have adopted data localization rules requiring companies to keep data about their users on their national territory. While existing research often focuses on regime type (i.e. autocratic incentives) to explain such policies, we argue states will vary in their choice of data localization laws and the costs they are ready to incur based in part on international factors. In particular, we argue that data flows are not only a channel of economic opportunity but also of potential vulnerability as information systems can be used as a tool of surveillance and coercion by global adversaries. As states perceive their risk of being a future target increase, they will be more likely to accept the economic costs of closure and adopt stringent data localization rules. Using a new dataset of data localization laws adopted between 1973 and 2023 worldwide, we conduct a mixed-effects generalized linear regression analysis, highlighting that states opposing the United States-led liberal order were more likely to adopt hard data localization rules after Edward Snowden’s revelations demonstrating the US’s ability to use the Internet as a source of global surveillance. We pair these quantitative results, with a case study of China, to illustrate how Snowden’s revelations served as a salience shock, prompting U.S. rivals to prioritize security considerations over economic ones when assessing the risks and benefits of open digital networks. Empirically, the paper provides a novel dataset related to national data localization efforts. Theoretically, our argument joins those interested in explaining economic closure in contrast to openness and underscores how economic coercion might restructure the alignment of the global economy.

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