Digital Interdependence and Power Politics

This paper presents the first empirical analysis demonstrating how international security influences global data flows. Firms exchange data traffic to achieve fast, stable, and affordable access to digital infrastructure, driving digital interdependence. While international security shapes economic interdependence, the mechanisms linking the two – sanctions, tariffs, boycotts, and contracts – create little risk for Internet interconnection, which is commonly exempted from sanction and tariff regimes, not directly consumed by the public, and not enabled through traditional contracts. I theorize that international conflict generates cybersecurity externalities as state and non-state actors directly weaponize digital interdependence. Firms and their networks sit directly in the path of future conflicts. Leveraging network topographical measurements from computer engineering, I test whether conflict expectations increase states’ mutual reliance to move data. I find robust evidence that power politics shapes digital interdependence and use additional analyses to argue that externalities, rather than state preferences, drive this process.