Indirect Geoeconomic Influence: A Switching Dynamical Systems Framework for Mechanism Design

2026-08-08

AI Summary

This study investigates how to reshape the internal political-economic structure of a target state—without directly intervening in its policy-making—so as to catalyze endogenous forces that organically generate policy pressures aligned with the preferences of the influencing actor. To this end, the work proposes an innovative framework based on switched dynamical systems, modeling political-economic evolution as a regime-dependent dynamic process. The state transition kernel is treated as a designable variable, and a structured switching vector decomposition mechanism governs transitions between “permissive” and “adversarial” regimes. Integrating combinatorial optimization, regime-contingent equilibrium analysis, and language model–assisted generation, the project derives comparative static relationships between mechanism credibility and identifiability, validates the approach through simulations in a reduced switching space, and demonstrates via small-scale blind experiments the efficacy of language models in generating viable mechanism prototypes.

Abstract

We develop a formal framework for analyzing indirect geoeconomic influence. The influencing state (sender) does not attempt to change a target nation's policy directly. Instead, the sender restructures the target's internal political economy so that its own citizens, firms, and institutions generate the compliance pressure. The framework rests on a switching dynamical system (SDS) in which a target's political economy evolves under mode-dependent rules. We analyze two modes: a permissive mode, in which a mechanism transmits pressure toward the sender's preferred policy, and a contested mode, entered naturally once the target detects and attributes the mechanism. Crucially, the sender's mechanism design shapes the transition into the contested mode rather than paying a static toll for legibility. This inverts the usual regime-switching problem: rather than estimating a latent transition kernel from data, the designer engineers the kernel to steer regime occupancy over a planning horizon. A structured switch vector decomposes any mechanism along discrete design dimensions, and a combinatorial optimizer searches this space for high-performing archetypes scored on compliance, time-to-threshold, and a durability ratio. We characterize mode-conditional equilibria and derive comparative statics on credibility and legibility, showing that the legibility penalty is scaled by the salience of the government channel and therefore interacts with the mechanism's cost incidence. We illustrate the framework with two stylized mechanisms, report a proof-of-concept simulation over a reduced switch space, and report a small blind-audit study of the pipeline's optional language-model generation stage.

Problem

• indirect geoeconomic influence
• switching dynamical systems
• mechanism design
• political economy
• regime switching

Innovation

• switching dynamical systems
• mechanism design
• indirect geoeconomic influence
• regime transition engineering
• structured switch vector