As an economist and business school professor, I teach about markets, valuations and the fundamental principles of negotiations. In any negotiation, strong positioning is the most important factor.
A key concept taught in bargaining courses is BATNA (best alternative to a negotiated agreement) — which means the most optimal option each party would have without a negotiated outcome. Success in negotiations depends on the ability to accurately assess the other party’s BATNA and, crucially, on the strength of your own. The stronger your nonnegotiated option, the more leverage you have in the negotiation.
Why is this relevant to thinking about the Russia-Ukraine war?
There have been various calls for a diplomatic solution to the war, and they tend to be accompanied by the suggestion that negotiating a settlement runs counter to providing weapons to Ukraine. This is erroneous. Military aid and diplomacy are not mutually exclusive because both are needed in negotiating an outcome. They are, in fact, complementary.
Assistance from the United States, Britain, the European Union and Ukraine’s other allies would strengthen Ukraine’s negotiating position. Far from undermining negotiations, this gives Ukraine, the victim, more bargaining power to reach an outcome that might be acceptable, instead of immediate subjugation. Those who focus on Ukraine making territorial concessions or blame the United States for expanding the war only weaken Ukraine’s bargaining position.
Will poor negotiation tactics lead to lasting peace? That’s extremely unlikely, for the following reasons.
Next to bargaining power, the other crucial factor to a successful negotiation is trust. Here, two conditions are necessary: 1) both parties need to be willing to reach an agreement (i.e., negotiate in good faith), and 2) both parties need to respect this agreement.
Neither of these conditions would be met with appeasement of Vladimir Putin. First, Russia’s only current proposal is the subjugation of Ukraine. Russia has openly mocked a diplomatic proposal put forth by Italy, confirming the absence of Russia’s good-faith negotiations. Second, there is no sign that Russia intends to respect any commitments it might make in a “winning” position.
Russia broke all international agreements that ensured respect for Ukraine’s borders, including the 1994 Budapest Memorandum and the 1997 Treaty on Friendship, Partnership and Cooperation. Throughout negotiation attempts during the current war, Russia never reduced the intensity of its shelling of Ukrainian territory. And potentially trust-building outcomes, such as a prisoner exchange for the Azovstal steelworks defenders, have yet to be achieved.
Of course, wars do end in treaties and settlement agreements, but history has taught that not all settlement agreements end wars. Think about the Munich Agreement of 1938. Did ceding Czechoslovakian lands to Germany end the war? No, it facilitated the unfolding of the worst war in human history. Why would ceding Ukrainian lands to Russia work out any better? We need the kind of agreement that will actually hold long term, without Russia resuming its aggression, whether in Ukraine or elsewhere, in a few years.
In other words, the question we should be asking is not whether the war will end in a negotiated outcome (it will). But rather what kind of outcome is acceptable, and how can we get there?
The answer to the first of these questions necessarily lies with Ukrainians, citizens of a sovereign nation. They are interested in a diplomatic solution, but they plead for more weapons, because this war is existential, and they will fight, with the support of allies or without.
On Feb. 24, the first day of Russia’s full-scale invasion, President Volodymyr Zelenskyy summed up the sentiment of his people: “We have been left alone to defend our state.” Three months later, 80% of Ukrainians are still against concessions or appeasement. At this point, standing with the Ukrainian people means buttressing that nation’s bargaining position enough to negotiate an outcome that leaves it free and territorially undivided.
So how can we get there? The suggestion that more help from the United States and other allies is prolonging the war or causing more Ukrainian deaths is akin to saying that arming an assault victim with a knife would prolong her suffering. That would be true if the assistance is deliberately insufficient. In Ukraine’s case, a salient point of debate is whether limiting the kind of military assistance supplied is the right policy.
Instead of promoting nebulous concepts of “diplomacy,” we should turn to the principles of negotiations and focus on concrete questions. What type of weapons does Ukraine need to reverse Russian advances and actually draw Putin to the negotiating table? How can we strengthen Ukraine’s BATNA position sufficiently to arrive at an acceptable settlement? In the absence of trust, how do we make sure that there is no resumption of aggression going forward? And finally, how can the international community help ensure that negotiations are structured so that the important phrase “never again” will hold true?
Anastassia Fedyk is an assistant professor at the UC Berkeley Haas School of Business and a co-founder of Economists for Ukraine. Yuriy Gorodnichenko, Bohdan Kukharskyy and Ilona Sologoub contributed.
