Economic Origins of War and Peace

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Economic Origins of War and Peace

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Title: Economic Origins of War and Peace
Author: Coe, Andrew
Citation: Coe, Andrew. 2012. Economic Origins of War and Peace. Doctoral dissertation, Harvard University.
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Abstract: Why do wars happen, and what do societies fight over? Why are international relations sometimes fearful and aggressive and other times harmonious? I show that these questions can be fruitfully explored by importing some basic economic theory into the existing bargaining theory of war. A separate essay analyzes the interactions between the United States and countries that may be pursuing nuclear weapons. "Costly Peace: A New Rationalist Explanation for War" posits a new explanation for war: sometimes peace is more costly (in the sense of leaving both sides worse off in expectation) than war. This means that some wars improve overall welfare relative to peace. I develop models for three common sources of costly peace tailored to particular wars and analyze them to expose the common underlying logic for war. The costs of: arming explain the Iraq War; imposition explain the civil conflicts within Iraq after the earlier Gulf War; and predation explain the American War of Independence. "The Modern Economic Peace" develops a theory of the origins of international disputes, in which the economic conflict of interests between two states is determined by the benefits and costs of transferring wealth from one state's economy to the other's. Whether such a transfer happens depends on the military situation between the two states and also the characteristics of their economies and governments. Nations with sensitive, integrated ("modern") economies of comparable size and representative governments have little to fight over. This might explain not only the puzzling comity of the West, but also long-run global patterns in organized violence, economic liberalization, and democratization. "A Model of Arms Proliferation and Prevention" is co-authored with Muhammet Bas. We develop a formal model of bargaining between two states, where one can invest in developing nuclear weapons and the other imperfectly observes its efforts and progress over time, and use it to analyze the occurrence of proliferation and war, the viability of non-proliferation agreements, and the role of intelligence-gathering and estimates. The model explains some of the complex phenomena that occur in these interactions, such as mistaken wars, cyclical crises, and the failure of non-proliferation deals.
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