Foreign Affairs Magazine

The Rise of the Brand State
By Peter van Ham

From Foreign Affairs, September/October 2001

Look at the covers of the brochures in any travel agency and you will see the various ways in which countries present themselves on the world's mental map. Singapore has a smiling, beautiful face offering us tasty appetizers on an airplane, whereas Ireland is a windy, green island full of freckled, red-haired children. But do these images depict real places, existing geographical sites one can visit? Or do the advertisements simply use cultural stereotypes to sell a product?

Over the last two decades, straightforward advertising has given way to branding -- giving products and services an emotional dimension with which people can identify. In this way, Singapore and Ireland are no longer merely countries one finds in an atlas. They have become "brand states," with geographical and political settings that seem trivial compared to their emotional resonance among an increasingly global audience of consumers. A brand is best described as a customer's idea about a product; the "brand state" comprises the outside world's ideas about a particular country.

We all know that "America" and "Made in the U.S.A." stand for individual freedom and prosperity; Herms scarves and Beaujolais Nouveau evoke the French art de vivre; bmws and Mercedes-Benzes drive with German efficiency and reliability. In fact, brands and states often merge in the minds of the global consumer. For example, in many ways, Microsoft and McDonald's are among the most visible U.S. diplomats, just as Nokia is Finland's envoy to the world. In today's world of information overload, strong brands are important in attracting foreign direct investment, recruiting the best and the brightest, and wielding political influence.

These days, individuals, firms, cities, regions, countries, and continents all market themselves professionally, often through aggressive sales techniques. Indeed, having a bad reputation or none at all is a serious handicap for a state seeking to remain competitive in the international arena. The unbranded state has a difficult time attracting economic and political attention. Image and reputation are thus becoming essential parts of the state's strategic equity. Like branded products, branded states depend on trust and customer satisfaction. We talk about a state's personality in the same way we discuss the products we consume, describing it as "friendly" (i.e., Western-oriented) and "credible" (ally), or "aggressive" (expansionist) and "unreliable" (rogue).

This preference for style over substance is increasingly shaping Europe's political landscape, affecting even NATO and the European Union (EU). Although no doubt unsettling to conservative thinkers, this is actually a positive development, since state branding is gradually supplanting nationalism. The brand state's use of its history, geography, and ethnic motifs to construct its own distinct image is a benign campaign that lacks the deep-rooted and often antagonistic sense of national identity and uniqueness that can accompany nationalism. By marginalizing nationalist chauvinism, the brand state is contributing greatly to the further pacification of Europe.

COOL BRANDS

Branding acquires its power because the right brand can surpass the actual product as a company's central asset. Smart firms pour most of their money into improving their brands, focusing more on the values and emotions that customers attach to them than on the quality of the products themselves. Since markets are flooded with indistinguishable, mass-produced items, firms have tried to individualize their goods by associating them with an "attitude brand," pushing a particular lifestyle or a cool image rather than a plain T-shirt, soft drink, or shoe. In today's secular age, the brand has become a sort of surrogate religion. The British management consultant Peter York has even argued that Nike's "swooshffitick logo means precisely what the crucifix meant to an earlier generation in ghettos -- it promises redemption, vindication and a way out."

These days, the power of the brand is being applied to all kinds of products and services and is crossing national and cultural barriers with astonishing ease. Naomi Klein, whose best-selling book No Logo has become a sort of bible for the anticorporatist movement, makes this point in reference to the famous Absolut vodka advertisements, where the actual product disappeared "and its brand was nothing but a blank bottle-shaped space that could be filled with whatever content a particular audience most wanted from its brands." Artful marketers can brand even the most basic products and services, as Richard Branson's Virgin Group has done with music, cola, airlines, and even financial services. The lack of a brand name means certain death for companies aspiring to play a global role.

With all this emphasis on brands, old-style political actors worry about being left behind. Globalization and the media revolution have made each state more aware of itself, its image, its reputation, and its attitude -- in short, its brand. In Belgium, for example, Prime Minister Guy Verhofstadt has hired a team of image-makers to rebuild the country's reputation after years of scandals involving government corruption, child pornography, and dioxin-polluted chickens. In an attempt to clear the air, Belgium has decided to introduce a new logo and hip colors and will sport the cool Internet suffix ".be" as its international symbol. The overall aim of the campaign is to emulate Virgin, which, according to one Belgian advertising expert, "isn't big, but you see it everywhere you look."

Dig a little deeper, and it becomes apparent that other European countries are joining the branding bandwagon. Tiny Estonia now not only takes exception to the label "post-Soviet state," it also dislikes being called a "Baltic" country. Toomas Hendrik Ilves, the country's foreign minister, refers to Estonia as a "pre-EU" or a "Scandinavian" country. Lacking blue-chip brands such as Finland's Nokia or Sweden's Volvo, Estonia may also try to push itself as a "green country" to attract environmentally conscious individuals and foreign direct investment. Poland's Ministry of Foreign Affairs, meanwhile, has set up a special promotional program aimed at improving the country's image, which most EU citizens still associate with devout Catholicism, backwardness, and conservatism.

In a way, these countries are following the lead of the "Cool Britannia" campaign launched by Prime Minister Tony Blair's government, itself built on the brand of "New Labour." The phrase, a pun on the patriotic hymn "Rule Britannia," is meant to emphasize the image of the United Kingdom as a global hub for the media, design, music, film, and fashion industries. The campaign was first developed by a task force of the country's artistic elite, formed to advise the government on how to make the country seem hip, enterprising, and cool. Although this group no longer has much influence, the shift from "Rule Britannia" to "Cool Britannia" should offer a lesson to the conservative (and not-so-cool) realist scholars of international politics: the change of slogans is not merely rhetorical window-dressing. On the contrary, it implies a shift in political paradigms, a move from the modern world of geopolitics and power to the postmodern world of images and influence.

Smart states are building their brands around reputations and attitudes in the same way smart companies do. Globalization and the harmonizing effects of European integration put pressure on states to develop, manage, and leverage their brand equity. Europe's emerging brand states know that most of them offer similar "products": territory, infrastructure, educated people, and an almost identical system of governance. To stand out in the crowd, assertive branding is essential. Despite the current world economic sluggishness sparked by the American economic downturn and the resulting decline in brand-building expenditures, most states still see branding as a long-term, cumulative effort that will influence foreign investment decisions and the state's market capitalization.

EUROPE'S BEAUTY PAGEANT

Creating a brand is not only economically desirable, it has considerable political and strategic implications, affecting even the dynamics of NATO and EU enlargement. Hard-nosed security analysts will argue that a state's image is irrelevant: objective economic, political, and strategic calculations determine, for example, whether a former communist state receives foreign direct investment and is offered NATO or EU membership. They claim that reducing Europe's security game to a "beauty pageant" oversimplifies a complicated geostrategic process. But if things were as straightforward as these analysts claim, political life would be eerily transparent and predictable. Why should we assume that the public readily buys into the seductive meanings of consumer capitalism but remains rational and objective when making political decisions?

Consider the countries of eastern Europe, many of which have massive image problems that impede their economic development and their chances of joining Europe's main political and security institutions. In his book Inventing Eastern Europe, the historian Larry Wolff describes how western Europeans have historically ascribed barbaric qualities to the peoples living in the East. For Voltaire and Diderot, eastern Europe was a space dominated by poverty, gloom, and backwardness. In 1945, the British historian Hugh Seton-Watson observed that the peoples of eastern Europe "have unpronounceable names and live in plains and forests, on mountains and by rivers which might be in another world." The Cold War deepened this European divide. Today, the conflicts in Chechnya and Kosovo certainly do not help make the East more reputable. For example, although Bulgarians and Albanians see themselves as living in southeastern Europe, most people in the West refer to that region as simply "the Balkans," a name that immediately evokes ethnic conflict, crime, and instability.

Indeed, opinion polls indicate that public support in the West for both NATO and EU enlargement is modest. Ordinary Americans and western Europeans are reluctant to share these luxury brands with too many others, for such dilution will diminish the prestige that comes with exclusivity. Membership in NATO or the EU symbolizes status and place in the international community.

For eastern Europe, NATO remains the main institution in the security realm, spreading democracy and stability through numerous "products": the Partnership for Peace, the Membership Action Plan, and the NATO-Russia Permanent Joint Council, for instance. In central Europe, the NATO logo has become a symbol of respectability and the ultimate marker of "Westernness"; NATO's image has been enhanced in the last ten years by its heritage, having won the Cold War and liberated the "captive nations" of the communist bloc. Similarly, NATO's military operation in Kosovo in 1999 strengthened its image as the only organization willing to go to war to defend human rights and stop ethnic cleansing. But it is important to recognize that the Kosovo campaign was no altruistic affair on the part of the West. Rather, it sought to illustrate NATO's continued relevance in managing European security. The only other alternative -- doing nothing -- would have damaged NATO's image beyond repair.

Whereas NATO emphasizes security, the EU radiates self-confidence and affluence. Knowing that "Europe" will never inspire affection in its citizens similar to that enjoyed by the nation-state, the EU is in the midst of a campaign to brand itself as a beacon of civilization and prosperity in an otherwise disorderly and disoriented world. The EU's striking logo -- a blue flag with a circle of 12 stars -- is already omnipresent. The application of "euro" to everything from trains and soccer championships to a unit of currency will make it one of the most frequently used names across the continent and one of the world's most popular brands.

To protect the NATO and EU brands, these organizations make the cost of membership quite high. It is so high, in fact, that to realistically vie for membership, a state must already have acquired the amenities -- security and affluence -- promised by NATO and the EU. This is a manifestation of Europe's so-called "mortgage paradox": just as commercial banks will not give a mortgage to financially unsound clients, NATO and the EU will not offer membership to poor or unstable applicants. Until these countries adopt the EU's elaborate catalogue of economic and political rules (the infamous acquis communautaire) or follow NATO guidelines on civil-military relations, membership will remain elusive. Although both organizations are officially in the business of "spreading stability," they will open their doors only to states that no longer need membership to become stable and prosperous. Indeed, NATO's official policy precludes accepting new members that are "consumers" of security; it will accept only countries able to make a significant contribution to European stability. In a similar way, the EU will invite in only countries with functioning market economies. Although few analysts dare to highlight this state of affairs, NATO and the EU can offer only the confirmation of security and affluence.

But this paradox does not diminish the importance of NATO or EU membership. In today's branded society, being able to "afford" NATO or EU membership gives the state emotional satisfaction and important public exposure. With the Soviet threat gone, security and prosperity have turned from survival tools into luxury items. NATO and the EU wear their logos proudly, telling their clientele that buying their "product" implies that one is safe and sophisticated. These branding efforts reinforce the "customer's" sense of self and offer security and a sense of belonging. It is little surprise, therefore, that the new NATO members -- Poland, Hungary, and the Czech Republic -- wear their membership as a badge of achievement and exclusivity. For these countries, the rationale of their alliance membership is simple: "Because I'm worth it!"

IDENTITY POLITICS

The traditional diplomacy of yesteryear is disappearing. To do their jobs well in the future, politicians will have to train themselves in brand asset management. Their tasks will include finding a brand niche for their state, engaging in competitive marketing, assuring customer satisfaction, and most of all, creating brand loyalty. Brand states will compete not only among themselves but also with superbrands such as the EU, CNN, Microsoft, and the Roman Catholic Church (boasting the oldest and most recognized logo in the world, the crucifix). In this crowded arena, states that lack relevant brand equity will not survive. The state, in short, will have become the State(r).¶

Peter van Ham is Senior Research Fellow at the Netherlands Institute of International Relations "Clingendael" in The Hague and the author of European Integration and the Postmodern Condition.