Mutual Optimism as a Cause of Conflict: Secret Alliances and Conflict Onset

Abstract

A prominent theory in International Relations posits that mutual optimism, due to two sides holding divergent estimates of their relative bargaining power, causes interstate conflict. This paper develops a theory of mutual optimism in which conflicting bargaining power estimates arise from asymmetric information about which, if any, third parties will join either side in a military dispute. We contend that secret alliances can generate mutual optimism which increases the probability of conflict. By exploiting secret alliances as a measurable source of private information, we provide the first systematic test of mutual optimism that directly assesses a state’s secret capabilities. Optimism is present when a state’s secret allies are more numerous or powerful than anticipated by opponents. Our empirical tests and numerous robustness checks strongly support the theoretical expectation. We conclude that mutual optimism is an empirically, as well as theoretically, important cause of interstate conflict.