Soft Power

Joseph S. Nye defines soft power as follows: “Co-optive [or soft] power is the ability of a country to structure a situation so that other countries develop preferences or define their interests in ways consistent with its own. This power tends to arise from such resources as cultural and ideological attraction as well as rules and institutions of international regimes” (Nye, 2004a, p. 77). To put it shortly, “soft power occurs when one country gets other countries to want what it wants” (Nye, 1990). Thus, soft power is basically about winning the hearts and minds of others.
Actors who possess soft power exert a degree of control over the discursive (or knowledge) structure in world politics, and shape the world view of others to their own advantage. Influence over the minds of others brings us in the constitutive rather than interactive realm.
Hard power, in contrast, refers to situations when actor A makes actor B do something based on a cost-benefit-analysis, namely under pressure of a threat or a reward, but without genuine change of mind (for a discussion see Nye, 2004b, pp. 6-8).
Given established definitions in the academic literature, the distinction between hard and soft power has nothing to do with the use of military versus non-military, economic means. Economic pressure either through sanctions, or development aid or trade benefits, also amounts to the exertion of hard power. If the recipient of aid also starts to embrace the world view of the powerful, only then soft power applies.