Checkbook diplomacy involves using economic clout as a political tool, to either cultivate favor with specific nations or to contribute to global diplomacy in some way. This type of diplomacy can take a number of forms, ranging from offers of economic support for military actions to arrangements for special low-interest loans for developing nations. Some nations have been criticized for their use of checkbook diplomacy, perhaps most notably the People's Republic of China and the Republic of China, which governs the island of Taiwan.
In the case of China and Taiwan, both nations spent large amounts of money in order to be officially recognized by other foreign powers. They contributed to foreign aid, invested in other nations, and cultivated powerful trade deals with potential allies. Both nations hoped to utilize money as a tool, essentially buying respect from the international community; in the case of the Republic of China, checkbook diplomacy seemed to work, with several governments officially recognizing the Republic of China after its extensive campaign.
Checkbook diplomacy can also take other forms. For example, both Japan and Germany have curtailed military abilities, as part of their terms of surrender after the Second World War. As a result, these nations have historically had trouble supporting international military efforts. However, both have healthy economies, and they have provided substantial funding to military efforts and police actions all over the world so that they demonstrate a desire to cooperate internationally.
As can be seen from the above two examples, sometimes checkbook diplomacy seems suspiciously like an attempt to buy diplomatic favors, while at other times it is simply used to strengthen diplomatic ties. Many nations engage in checkbook diplomacy to varying degrees, using their economic power to provide aid to disaster victims, negotiate trade relations, and to support international organizations. Increasing economic cooperation around the world is often cited as a positive thing, especially when aid reaches developing nations which are in sore need of it.
Some critics of checkbook diplomacy feel that it is too distant, and that nations should instead be rolling up their sleeves and helping the international community. For example, after a major disaster, funds are certainly helpful, but so are doctors, engineers, and a wide variety of other personnel. These critics sometimes liken checkbook diplomacy to an absentee parent who tries to bribe a neglected child with toys, rather than putting in the physical effort required to build a strong relationship.