Updated for the 2026-2027 CFA® Level I curriculum.
Geopolitics studies how power, geography, and national interests shape relationships between states. For CFA Level I, the exam tests one core skill: classifying a relationship as cooperative, competitive, or mixed. This note builds that classification framework using actors, interests, institutions, and interdependence.
Quick Answer
Geopolitics is the study of how geography, power, and national interests shape relationships between states and other actors. These relationships fall on a continuum from cooperation to competition rather than into two fixed categories. The same two countries often cooperate in one area, such as trade, while competing in another, such as technology or resources. Interests, relative power, and interdependence determine where a relationship sits on that continuum at any given time.
Key Takeaways
Geopolitics examines how geography, power, and national interests drive interactions among states and other actors.
State actors (governments, militaries) and non-state actors (firms, alliances, international institutions) both shape outcomes.
National interests fall into categories: security, economic, resource, technological, and ideological.
Cooperation mechanisms include treaties, alliances, trade agreements, and shared institutions.
Competition mechanisms include rivalry over resources, technology races, and security dilemmas.
Economic interdependence raises the cost of conflict but does not eliminate competition.
Relationships sit on a continuum and can shift by domain, meaning cooperation and competition often coexist.
What You Need to Know for CFA Level I
Classify a described relationship as cooperative, competitive, or mixed based on stated facts, not assumptions.
Explain why two countries can cooperate in one domain and compete in another at the same time.
Recognize the five interest categories: security, economic, resource, technological, and ideological.
Apply the classification to neutral, hypothetical scenarios rather than real-world predictions.
Distinguish this framework from specific geopolitical tools, which belong to a separate note.
What Geopolitics Examines
Geopolitics looks at how geography, resources, and trade routes interact with state power and security goals. The field studies both state actors, such as governments and militaries, and non-state actors, such as firms, alliances, and international institutions.
A simple framework helps organize this. For any relationship, identify the actor, the actor's interest, and the constraint on its behavior.
Actor-interest-constraint framework:
Element | Question It Answers | Example |
|---|---|---|
Actor | Who is acting? | A national government, a trade bloc, a multinational firm |
Interest | What does the actor want? | Secure energy supply, protect a trade route, gain technology access |
Constraint | What limits the actor's options? | Military capacity, treaty obligations, economic dependence on a rival |
This framework applies to any geopolitical scenario on the exam. Identify the actor, name the interest, then check what constrains action. The constraint often explains why a country cooperates on one interest while competing on another.
The Cooperation-Competition Continuum
Cooperation and competition are not opposite boxes. They sit on a single continuum, and a relationship's position can differ by domain and shift over time.
At the cooperative end, states sign trade agreements, join shared institutions, and coordinate on standards. At the competitive end, states pursue relative gains, restrict access to technology, or contest control of a resource or route. Most real relationships sit in the middle, mixing both behaviors across different domains.
Two countries can occupy different points on this continuum depending on the domain in question. A trade relationship might sit near the cooperative end while a technology relationship for the same two countries sits near the competitive end. The exam rewards candidates who classify by domain instead of assigning one label to an entire relationship.
Why Countries Cooperate
Countries cooperate when the benefits of coordination exceed the cost of acting alone. Common motives include shared security threats, gains from trade, provision of public goods, and reduced risk through repeated interaction.
Motive | Benefit to the Actor | Constraint That Still Applies |
|---|---|---|
Shared security threat | Combined defense capacity | Must trust the partner's commitment |
Trade gains | Access to larger markets | Domestic industries may resist |
Public goods | Shared infrastructure or standards | Free-riding by other members |
Repeated interaction | Predictability and lower risk | Requires ongoing enforcement |
Institutions often support cooperation by lowering the cost of coordination and monitoring commitments. This note treats institutions only as evidence of cooperative behavior. Detailed coverage of specific institutions belongs on a separate note.
Why Countries Compete
Countries compete when they prioritize relative position over joint gains, or when interests directly conflict. Common drivers include control of strategic resources, technology leadership, security dilemmas, and domestic political pressure to appear strong.
A security dilemma arises when one state's defensive action appears threatening to another, prompting a response that escalates tension even though neither state sought conflict. This condition helps explain competitive behavior without requiring a prediction about outcomes.
Condition-based interpretation: if a resource, route, or technology is scarce and both actors depend on it, expect competitive behavior. If the same resource is abundant or substitutable, expect a more cooperative posture. The exam tests whether you can apply this condition to a described scenario, not whether you can predict a real conflict.
Worked Example
Northland and Estara are two fictional countries with three points of contact.
Trade in agricultural goods
Both countries signed a tariff-reduction agreement five years ago and have expanded trade volume each year since. This reflects cooperation. Both gain from specialization, and neither faces a scarce, contested resource in this domain.
Climate standards
Northland and Estara co-chair a regional body that sets shared emissions targets for shipping and manufacturing. This reflects cooperation. The institution lowers the cost of coordinating a public good that benefits both states.
Semiconductor technology
Both countries are racing to build domestic chip production and have each restricted technology exports to the other over the past two years. This reflects competition. Each treats chip capacity as a strategic, scarce resource tied to security and economic interests.
A shipping route
A narrow strait connects both countries to major export markets. Estara recently increased naval patrols near the strait after Northland proposed a new port facility nearby. This reflects competition. Both states depend on the same limited route, creating a security dilemma.
Interpretation
Northland and Estara's overall relationship is mixed. They cooperate where interests align and gains are joint, in trade and climate standards. They compete where interests conflict and a resource or route is scarce, in technology and shipping access. This is the classification skill the LOS tests: identify the domain, apply the actor-interest-constraint framework, and locate the relationship on the continuum for that domain rather than for the country pair as a whole.
Common Exam Traps
Treating cooperation and competition as mutually exclusive. A single country pair can cooperate in one domain and compete in another. Do not assign one label to the entire relationship.
Assuming economic interdependence removes security competition. Interdependence raises the cost of conflict. It does not eliminate competing security or technology interests.
Using geography as the only driver. Geography shapes constraints and opportunities, but interests, institutions, and relative power also determine behavior.
Confusing an institution with a geopolitical tool. An institution supports coordination and monitoring. A tool, such as a sanction or tariff, is an instrument a state applies. Keep this distinction; tools receive full coverage on a separate note.
Relying on unsourced current-event claims. The exam tests the framework using described scenarios. Do not import outside assumptions about real countries or ongoing conflicts.
Practice Question
Two fictional countries, Velara and Kestrion, share a river used for both irrigation and hydropower. Velara and Kestrion jointly fund a river-management commission that allocates water rights and coordinates flood response. At the same time, both countries have increased military spending along their shared border after Kestrion announced plans to build a new dam upstream of Velara's largest farming region.
Based on this information, the relationship between Velara and Kestrion is best described as:
Cooperative, because the river-management commission shows sustained institutional coordination.
Competitive, because rising military spending signals an unresolved security dilemma.
Mixed, because the countries cooperate on water management while competing over control of the dam's resource impact.
Correct Answer: C
Velara and Kestrion cooperate in one domain, joint water management through a shared institution, while competing in another, control over a resource that affects farming and security. This matches the continuum framework: classify by domain rather than assigning one label to the full relationship.
Option A. Focuses only on the institutional evidence and ignores the military buildup tied to the dam dispute.
Option B. Focuses only on the security signal and ignores the functioning cooperative institution.
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FAQs About Geopolitics
What does geopolitics mean in CFA Level I?
At Level I, geopolitics refers to the study of how power, geography, and national interests shape relationships between states and other actors. The exam focuses on classifying these relationships along a cooperation-to-competition continuum rather than memorizing current events.
Can countries cooperate and compete at the same time?
Yes. Countries frequently cooperate in one domain, such as trade or shared infrastructure, while competing in another, such as technology or a contested resource. The exam expects you to classify by domain rather than apply a single label to the entire relationship.