War Finance in the 21st Century: Insights from Ukraine, Syria, and Beyond

War finance has become increasingly globalized in the 21st century. The traditional image of war finance—a state raising taxes or selling war bonds to its citizens—has given way to an intricate web of international coalitions, global financial flows, and technological innovations. War-time coalitions have expanded beyond traditional military alliances to include sophisticated financial cooperation. New sovereign lenders have emerged to challenge Western financial dominance, creating alternative funding pathways for states facing Western restrictions. Financial technology continues to transform how resources can be mobilized for war, creating both new opportunities and vulnerabilities.

When we began writing our chapter in The Oxford Handbook of Geoeconomics and Economic Statecraft in early 2022, the Russian invasion of Ukraine was providing a real-time illustration of this new reality. Within days of the invasion, a coalition of Western nations not only provided direct military aid to Kyiv, but also wielded unprecedented financial weapons against Moscow. Russia was cut off from the SWIFT financial messaging system, while its central bank was prevented from accessing portions of its international reserves. At the same time, technological innovation democratized war finance on the Ukrainian side. Individuals from across the globe could make cryptocurrency donations or  to the National Bank of Ukraine to support Ukraine’s military effort in real-time, bypassing relief organizations and traditional state-mediated channels. 

Since then, the landscape has continued to evolve dramatically. Ukraine has successfully restructured its debt with private investors and secured substantial loans from international organizations. The European Union, through its European Peace Facility, took the unprecedented step of directly funding lethal aid to a country under attack. Similarly, the G7 has provided coordinated financial support packages. Additional support from more than 40 countries through various financial and military assistance programs has created a complex web of international backing. 

Meanwhile, the initial impact of Western financial sanctions on Russia has been partially mitigated by alternative financial arrangements with countries like China and India, demonstrating how market actors and state allies can help circumvent even sophisticated financial restrictions.

This globalization of war finance extends beyond interstate conflicts. Civil wars, which now far outnumber conflicts between states, increasingly tap into international funding sources. The fluid nature of international support is particularly evident here. As of early 2025, U.S. foreign aid mechanisms are being dismantled, which will hamper how partner states fight or recover from conflict. For example, in Syria, with rebels achieving victory, the international community must now carefully consider how external support will affect rebel governance and post-conflict reconstruction.

While the United States remains central to this global financial web, its position is being challenged. Domestic anti-foreign aid sentiment will limit how well American support can bolster partner states. In addition, China’s growing role in international finance, particularly through its Belt and Road Initiative, suggests a future where financial power is more dispersed. Recent political developments, including potential changes in U.S. foreign policy priorities, could accelerate this transformation.

War finance is no longer just about raising revenue—it’s about cultivating relationships and navigating a complex global system where financial and military power are increasingly intertwined. The ability to maintain robust, adaptable international financial support networks has become as critical to military success as battlefield capabilities. As both interstate and civil conflicts continue to evolve, those who can best navigate this new financial landscape will hold a decisive advantage.

Rosella Cappella Zielinski is an associate professor of political science at Boston University. Patrick E. Shea is a senior lecturer in international relations at the University of Glasgow’s School of Social and Political Sciences.

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