13 The New Geoeconomics of Internal Conflict in Western Democracies

In the contemporary international system, the analytical boundary between external rivalry and internal stability has become structurally porous. Western democracies, long treated as consolidated orders insulated from large-scale domestic violence, increasingly display vulnerabilities that were historically associated with fragile or transitional states. These vulnerabilities are not reducible to episodic political polarization or cultural contestation. They are embedded in the political economy of adjustment to globalization, technological change, and the strategic management of interdependence. From a geoeconomic perspective, internal conflict in advanced democracies is best understood not as an anomalous deviation from “normal politics,” but as a possible endogenous outcome of economic transformation when distributional shocks, spatial divergence, and informational fragmentation erode legitimacy and reconfigure the incentives of political actors.

13.1 Changing risk factors

The classic civil war literature emphasizes low income, weak state capacity, and insurgency-friendly conditions as predictors of internal violence, particularly when governments lack the coercive reach to suppress rebellion and when conflict becomes self-sustaining through rural sanctuary and protracted war dynamics (Fearon and Laitin (2003)). By these criteria, Western democracies appeared structurally protected. Yet this inference relied on an implicit mapping between “fragility” and “poverty,” and between “institutional maturity” and “immunity.” More recent work argues that wealth and institutional longevity do not eliminate conflict risk; they can transform it by shifting conflict away from territorial secession and toward forms of asymmetric disruption, radicalization, and contestation over the legitimacy of the state itself (Walter (2022)). In post-industrial democracies, the relevant mechanisms often operate through perceived relative loss, asymmetric exposure to trade and automation, and the erosion of shared expectations about mobility, dignity, and fairness. These are fundamentally political-economic phenomena, and therefore geoeconomic in character.

A central feature of the contemporary transformation is the reorganization of opportunity across space and social groups. Advanced democracies have experienced durable concentration of growth and high-wage employment in metropolitan regions with dense human capital, while peripheral, industrial, and many rural areas have faced long-run stagnation or decline. This spatial divergence becomes politically consequential when it aligns with identity cleavages and with narratives of recognition and status. In the “cultural backlash” account, economic marginalization interacts with status anxiety to produce durable opposition to liberal institutions perceived as serving cosmopolitan winners rather than national communities (Norris and Inglehart (2019)). The geoeconomic insight is that the political salience of distribution is amplified when the perceived losers of globalization do not merely lose income, but lose voice and future prospects, and when adjustment policies fail to preserve credible trajectories of inclusion.

Under these conditions, polarization and democratic erosion are better conceptualized as endogenous responses than as exogenous shocks. Polarization transforms distributive disputes into existential contests over identity and control of the state, weakening the informal norms that sustain democratic institutions. When political competition becomes zero-sum, constitutional constraints are reinterpreted as obstacles rather than as shared commitments, and actors face stronger incentives to bypass institutional procedures. The historical and comparative logic developed by Levitsky and Ziblatt (2018) emphasizes that democratic breakdown is often preceded by a gradual erosion of mutual toleration and institutional forbearance, rather than by sudden coups. A geoeconomic extension of this argument highlights that institutional forbearance is more difficult to sustain when a large share of the electorate believes that the prevailing economic order systematically excludes them, and when political entrepreneurs can credibly frame the status quo as both illegitimate and unresponsive.

The erosion of social capital deepens these vulnerabilities. Long-run declines in civic engagement, associational life, and interpersonal trust weaken the “bridging” connections that enable societies to absorb economic shocks without converting them into identity conflict. In Putnam’s account, the decline of civic infrastructure reduces the capacity for cooperative problem-solving and increases the ease with which grievances become politicized in divisive terms (Putnam (2000)). Geoeconomically, this erosion matters because social trust functions as a coordination technology: it lowers transaction costs and supports compliance with institutional outcomes. When it weakens, the costs of compromise rise, and the returns to mobilization through antagonistic identity narratives increase.

13.2 The role of the informational environment

The informational environment further amplifies this dynamic. Digital platforms lower the coordination costs of mobilization, increase the speed at which grievance narratives diffuse, and often reward polarizing content. From a geoeconomic standpoint, the information ecosystem is not merely a cultural arena; it is a critical domestic infrastructure that conditions political stability and thereby shapes national power. Disinformation, whether generated domestically or injected by external actors, interacts with underlying economic grievances to weaken cohesion and to raise doubts about procedural legitimacy. In this sense, internal conflict becomes entangled with external rivalry: adversaries can exploit domestic fragmentation as a form of indirect coercion, imposing strategic costs without conventional confrontation, a logic consistent with broader accounts of interdependence as leverage in the contemporary international system (Farrell and Newman (2019)).

The strategic form that internal conflict might take in advanced democracies is also changing. It is unlikely to resemble classical civil wars centered on territorial control and conventional battles. Instead, it is more plausibly expressed as protracted, low-intensity violence and intimidation, organized around disruption of critical infrastructures and symbolic targets rather than around conquest of territory. Betz’s strategic argument explicitly frames prospective internal conflict in Western states as “systems disruption” targeting vulnerable critical infrastructure, with violence that may metastasize from low-grade disorder into broader internal conflict dynamics (Betz (2025)). Even when one disagrees with the forecasting horizon or the magnitude of the risk, the geoeconomic logic is coherent: in densely networked economies, attacks on energy grids, transport nodes, supply chains, and communication systems can generate outsize economic effects and political pressure because modern life is highly dependent on a small number of interconnected lifelines.

This reasoning also clarifies why urban–rural divides become operationally salient. Cities concentrate financial, political, and symbolic power, but depend on extended hinterlands for energy, food, water, and transport continuity. Peripheral regions often host critical infrastructure that sustains metropolitan systems. In an internal conflict scenario, this spatial asymmetry creates incentives for asymmetric strategies aimed at disruption of flows rather than seizure of centers. The implication is not that internal conflict is inevitable, but that the strategic logic of disruption is structurally available in advanced democracies precisely because their economies are highly interdependent and infrastructure-intensive.

The systemic implications would extend well beyond domestic politics. If internal instability were to become sustained in major democratic economies, global supply chains, financial markets, and institutional leadership would be disrupted. External projection of influence would be constrained by internal legitimacy crises and by the diversion of state capacity toward domestic security. Internal cohesion would thus become a geoeconomic asset: a determinant of international bargaining power, alliance credibility, and the capacity to sustain long-horizon industrial and technological strategies.

13.3 Policy implications

None of this implies fatalism. A geoeconomic framing also clarifies pathways to resilience. Policies that reduce extreme inequality, address spatial divergence through credible regional development strategies, strengthen social insurance against concentrated adjustment shocks, and improve the governance of the information ecosystem can reduce the incentives and opportunities for conflict entrepreneurship. In analytical terms, the central objective is to restore the credibility of inclusive growth and the legitimacy of institutional mediation. In strategic terms, the objective is to treat internal stability as part of national power—an asset that must be maintained deliberately in an era when interdependence can be exploited externally and when distributional fractures can be weaponized domestically.

# The New Geoeconomics of Internal Conflict in Western Democracies In the contemporary international system, the analytical boundary between external rivalry and internal stability has become structurally porous. Western democracies, long treated as consolidated orders insulated from large-scale domestic violence, increasingly display vulnerabilities that were historically associated with fragile or transitional states. These vulnerabilities are not reducible to episodic political polarization or cultural contestation. They are embedded in the political economy of adjustment to globalization, technological change, and the strategic management of interdependence. From a geoeconomic perspective, internal conflict in advanced democracies is best understood not as an anomalous deviation from “normal politics,” but as a possible endogenous outcome of economic transformation when distributional shocks, spatial divergence, and informational fragmentation erode legitimacy and reconfigure the incentives of political actors. ## Changing risk factors The classic civil war literature emphasizes low income, weak state capacity, and insurgency-friendly conditions as predictors of internal violence, particularly when governments lack the coercive reach to suppress rebellion and when conflict becomes self-sustaining through rural sanctuary and protracted war dynamics (@fearon_laitin2003). By these criteria, Western democracies appeared structurally protected. Yet this inference relied on an implicit mapping between “fragility” and “poverty,” and between “institutional maturity” and “immunity.” More recent work argues that wealth and institutional longevity do not eliminate conflict risk; they can transform it by shifting conflict away from territorial secession and toward forms of asymmetric disruption, radicalization, and contestation over the legitimacy of the state itself (@walter2022). In post-industrial democracies, the relevant mechanisms often operate through perceived relative loss, asymmetric exposure to trade and automation, and the erosion of shared expectations about mobility, dignity, and fairness. These are fundamentally political-economic phenomena, and therefore geoeconomic in character. A central feature of the contemporary transformation is the reorganization of opportunity across space and social groups. Advanced democracies have experienced durable concentration of growth and high-wage employment in metropolitan regions with dense human capital, while peripheral, industrial, and many rural areas have faced long-run stagnation or decline. This spatial divergence becomes politically consequential when it aligns with identity cleavages and with narratives of recognition and status. In the “cultural backlash” account, economic marginalization interacts with status anxiety to produce durable opposition to liberal institutions perceived as serving cosmopolitan winners rather than national communities (@norris_inglehart2019). The geoeconomic insight is that the political salience of distribution is amplified when the perceived losers of globalization do not merely lose income, but lose voice and future prospects, and when adjustment policies fail to preserve credible trajectories of inclusion. Under these conditions, polarization and democratic erosion are better conceptualized as endogenous responses than as exogenous shocks. Polarization transforms distributive disputes into existential contests over identity and control of the state, weakening the informal norms that sustain democratic institutions. When political competition becomes zero-sum, constitutional constraints are reinterpreted as obstacles rather than as shared commitments, and actors face stronger incentives to bypass institutional procedures. The historical and comparative logic developed by @levitsky_ziblatt2018 emphasizes that democratic breakdown is often preceded by a gradual erosion of mutual toleration and institutional forbearance, rather than by sudden coups. A geoeconomic extension of this argument highlights that institutional forbearance is more difficult to sustain when a large share of the electorate believes that the prevailing economic order systematically excludes them, and when political entrepreneurs can credibly frame the status quo as both illegitimate and unresponsive. The erosion of social capital deepens these vulnerabilities. Long-run declines in civic engagement, associational life, and interpersonal trust weaken the “bridging” connections that enable societies to absorb economic shocks without converting them into identity conflict. In Putnam’s account, the decline of civic infrastructure reduces the capacity for cooperative problem-solving and increases the ease with which grievances become politicized in divisive terms (@putnam2000). Geoeconomically, this erosion matters because social trust functions as a coordination technology: it lowers transaction costs and supports compliance with institutional outcomes. When it weakens, the costs of compromise rise, and the returns to mobilization through antagonistic identity narratives increase. ## The role of the informational environment The informational environment further amplifies this dynamic. Digital platforms lower the coordination costs of mobilization, increase the speed at which grievance narratives diffuse, and often reward polarizing content. From a geoeconomic standpoint, the information ecosystem is not merely a cultural arena; it is a critical domestic infrastructure that conditions political stability and thereby shapes national power. Disinformation, whether generated domestically or injected by external actors, interacts with underlying economic grievances to weaken cohesion and to raise doubts about procedural legitimacy. In this sense, internal conflict becomes entangled with external rivalry: adversaries can exploit domestic fragmentation as a form of indirect coercion, imposing strategic costs without conventional confrontation, a logic consistent with broader accounts of interdependence as leverage in the contemporary international system (@farrell_newman2019). The strategic form that internal conflict might take in advanced democracies is also changing. It is unlikely to resemble classical civil wars centered on territorial control and conventional battles. Instead, it is more plausibly expressed as protracted, low-intensity violence and intimidation, organized around disruption of critical infrastructures and symbolic targets rather than around conquest of territory. Betz’s strategic argument explicitly frames prospective internal conflict in Western states as “systems disruption” targeting vulnerable critical infrastructure, with violence that may metastasize from low-grade disorder into broader internal conflict dynamics (@betz2025). Even when one disagrees with the forecasting horizon or the magnitude of the risk, the geoeconomic logic is coherent: in densely networked economies, attacks on energy grids, transport nodes, supply chains, and communication systems can generate outsize economic effects and political pressure because modern life is highly dependent on a small number of interconnected lifelines. This reasoning also clarifies why urban–rural divides become operationally salient. Cities concentrate financial, political, and symbolic power, but depend on extended hinterlands for energy, food, water, and transport continuity. Peripheral regions often host critical infrastructure that sustains metropolitan systems. In an internal conflict scenario, this spatial asymmetry creates incentives for asymmetric strategies aimed at disruption of flows rather than seizure of centers. The implication is not that internal conflict is inevitable, but that the strategic logic of disruption is structurally available in advanced democracies precisely because their economies are highly interdependent and infrastructure-intensive. The systemic implications would extend well beyond domestic politics. If internal instability were to become sustained in major democratic economies, global supply chains, financial markets, and institutional leadership would be disrupted. External projection of influence would be constrained by internal legitimacy crises and by the diversion of state capacity toward domestic security. Internal cohesion would thus become a geoeconomic asset: a determinant of international bargaining power, alliance credibility, and the capacity to sustain long-horizon industrial and technological strategies. ## Policy implications None of this implies fatalism. A geoeconomic framing also clarifies pathways to resilience. Policies that reduce extreme inequality, address spatial divergence through credible regional development strategies, strengthen social insurance against concentrated adjustment shocks, and improve the governance of the information ecosystem can reduce the incentives and opportunities for conflict entrepreneurship. In analytical terms, the central objective is to restore the credibility of inclusive growth and the legitimacy of institutional mediation. In strategic terms, the objective is to treat internal stability as part of national power—an asset that must be maintained deliberately in an era when interdependence can be exploited externally and when distributional fractures can be weaponized domestically.