ALGORITHMIC ECONOMIC DIPLOMACY AS A PARADIGM SHIFT: THEORY-BUILDING FOR THE AI AGE

Abstract

The rapid diffusion of artificial intelligence and algorithmic systems is reshaping the conduct of economic diplomacy in ways that challenge established analytical frameworks. While existing scholarship on digital (economic) diplomacy has focused primarily on communication technologies, platforms, and networked interaction, it increasingly struggles to account for the structural implications of algorithmic mediation. This article addresses this gap by developing a theory-building framework for understanding economic diplomacy in the context of algorithmic governance. Drawing on conceptual analysis informed by diplomatic studies, international political economy, and science and technology studies, the article traces the evolution of economic diplomacy across three analytically distinct stages: modern public economic diplomacy, digital or postmodern economic diplomacy, and a contemporary algorithmic configuration characterized as late postmodern. It argues that algorithmic systems do not merely extend digital practices but may constitute a qualitative shift in how economic knowledge, diplomatic agency, and power are structured, particularly in data-intensive and highly regulated environments. The article contributes by proposing a definition of algorithmic economic diplomacy, identifying diagnostic criteria that distinguish it from earlier paradigms, and offering a stage model that captures both continuity and transformation in economic statecraft. By conceptualizing economic diplomacy as increasingly shaped by algorithmic infrastructures, the article provides a foundation for future empirical research and for ongoing debates on accountability, governance, and power in AI-mediated international economic relations.