Where does business interest end and a conflict of interest begin? A Social Network Analysis of German and Russian Geo-Economics

Lindsey Smith

I will be taking the 2^nd module

Background: German and Russian business relations are said to have a special connection. With Germany’s export-leaning, industrialized economy and Russia’s market potential and abundance of raw materials, this is no surprise. However, when looking at the prominence of former Chancellor Gerhard Schroeder on the shareholder’s board of Russia’s Nord Stream, the special connection reaches unexpected heights. As Chancellor, Schroeder was a key advocate for the project, which proposed a direct gas pipeline between Russia and Germany. To say the least, his appointment to the board is questionable.

As an export economy, Germany places a premium on stable economic relationships to fuel its need for raw materials and provide markets for its goods. This approach can blur the line between national and economic interests, giving businesses a key role in shaping foreign policy. While such principles give some context to the extreme case of Nord Stream, nevertheless, it also raises concerns as to where a business interest ends and a conflict of interest begins.

Question: My question is layered: 1) How interconnected are the board members of German and Russian companies? 2) How much influence do these board members have in German politics? 3) Will this network reinforce patterns of Germany’s policy toward Russia, especially when business is involved?

Hypothesis: While I think the Schroeder case was an outlier, I would not be surprised if board members demonstrated a strong political influence; even without connections to Russia. Such findings would strengthen a case for German business influence in foreign policy shaping. However, without strong connections to Russia, the findings would weaken the idea that German geo-economic priorities are exclusive to Russia.

Methodology: 

•  I plan to build a two-mode network demonstrating board members’ connections to corporations and political institutions. I will examine the board members for top German and Russian companies, as well as leadership in German lobby and interest groups.
• What will be the most important network measures? The network map will be important in itself in indicating key power players and institutions. Also, after converting the network from a two-mode to one-mode networks, centrality measures will be important quantifying power and influence.
• What data do you need? Easy/hard to get? I was unable to find a database listing German board members and their affiliations. However, board membership is well documented on corporate websites. Lobby and interest group membership is also listed on the EU transparency register. While it may take time to compile, it is easy to find.
• What will the SNA help you do? SNA will help me identify key players and institutions in German-Russian geo-economics.

Conclusion: With national interest influenced strongly by economic interests, Germany can be a confusing diplomatic partner at times. However, highlighting key areas of overlap in business and politics may help isolate whose influence is worth swaying on key initiatives.