This book develops a unified theory of economic statecraft to clarify when and how sanctions and incentives can be used effectively to secure meaningful policy concessions from a target state. The authors argue that economic statecraft succeeds not when its economic costs and benefits affect the economic calculus of target states, but when it imposes meaningful political costs. It does so when it generates or highlights significant threats to the target's strategic interests internationally or when it generates domestic political pressures that the target government cannot escape. To gauge these threats and pressures, the book develops two novel measures: one (TSI) weighs the threats economic statecraft poses to the target's strategic interests; while the other (stateness) assesses the degree to which the target state is insulated from domestic political pressures that senders attempt to generate or exploit. It argues that states with high TSI are more likely to comply with the sender's demands, as are those with low stateness facing pressures to comply generated through the target society. By contrast, target governments with high stateness are more likely to comply when TSI persuades them, since they can use the insulation of stateness to stand firm against domestic opposition. Through detailed studies of three cases of economic incentives and three cases of economic sanctions, the book confirms that states are not affected in a uniform manner by economic statecraft. Instead, the geopolitical context within which economic stimuli are sent and state-society relations in the target state determine the political costs confronting the target, which in turn, determines whether it complies or not. The book concludes by examining the implications of these findings for policymakers wishing to employ economic sanctions or incentives in contemporary crises, such as the Iranian and North Korean nuclear stand-offs and the genocide in Darfur. This book will be of much interest to students of statecraft, sanctions, diplomacy, foreign policy, and international security in general.