The Political Economy of Edward Snowden

It seems like Edward Snowden has offered his citizenship to at least 21 countries via auction from Moscow’s airport transit area. It is not yet clear if anyone will bid but it is interesting nonetheless to analyze what mr. Snowden is trying to sell and why anyone would buy.

Snowden essentially has two assets: sensitive information and the ability to give a leader a temporary boast in popularity. From his willingness to freely share sensitive information it would appear that Snowden is betting on the latter (although he may be holding back more information). Unfortunately for the U.S. he has already spent considerable time with representatives from two governments that the U.S. would least like this information to be shared with.

Any leader bidding for Snowden’s citizenship faces a time inconsistency problem: how can Snowden be assured that a leader doesn’t just use him for immediate popularity gains (perhaps to help win an election?) and then throws him under the bus? From this perspective, a European country would be ideal (Switzerland comes to mind). This is not because European leaders are more trustworthy but because most countries there have legal systems that heavily constrain extradiction. Snowden could even fight it all the way up to the European Court of Human Rights if it came to that.

It would make little sense for the U.S. to keep pressuring such a country to give up Snowden after he was granted asylum knowing that the legal branch credibly constrains the executive. This could make the political cost for European countries lower. On the other hand, there is plenty of time to make credible threats now and Switzerland doesn’t really need another U.S. investigation into one of its banks. Perhaps Norway is the best candidate? They have enough oil (and few other exports) to withstand U.S. pressure, although the U.S. has a unique ability to hurt most countries in multiple ways.

I have little doubt that mr. Snowden’s revelations this week were aimed at creating a domestic fury in European countries that could conjure up sufficient support for asylum. I have more doubts that it will work. To start with, most asylum laws do not allow applications from abroad so leaders have a simple legal argument to hide behind. Moreover, in the midst of an economic crisis it is less clear that standing up to the U.S. in a way that could mean foregoing economic gains yields many political benefits.

The main credibility problems for Latin American countries is that the ideological composition of governments may change and thereby the incentives to extradite. Some Russian officials (and Ron Paul) suggested that Snowden might also face extra-legal risks there, alluding to a history of U.S. assassinations (let’s hope for mr. Snowden that Donald Trump does not win the next elections). Snowden may also be concerned about his long-term security in Russia.  It would seem that mr. Snowden is the kind of individual who might soon find himself in trouble with the Russian government. Compared to that government turnovers have the virtue of being at least somewhat predictable. Yet, granting asylum is also controversial within Ecuador and Venezuela and it is not clear that the political benefits are that straightforward.

Another option is, of course, that mr. Snowden strikes some kind of bargain with the U.S. government.Or he might end up living in the transit zone for another 17 years, as an Iranian refugee apparently did in France. If an offer from Venezuela or so materialized, I would take it if I were Snowden. Perhaps the most likely outcome, though, is that he will remain in Russia. I don’t think this will harm U.S. Russia relations all that much in the long run. You can cancel a trade deal with Ecuador over an affair like this but not with Russia (which has now entered the WTO). It would merely be a continuation (although somewhat intensified) of existing spats over human rights. Perhaps one of the former Soviet republics will take him of Russia’s hands.

More thoughts?

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