Borrowed Power: Debt Finance and the Resort to Arms

Slantchev, Branislav L.

doi:10.1017/s0003055412000378

Cited by 38 publications

(34 citation statements)

References 33 publications

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“…Despite historical accounts, the empirical conflict literature rarely addresses the political consequences of alternative war financing strategies. The scarce political science scholarship that does address the relationship between credit and war focuses almost exclusively on credit's contribution to material power often in the context of major power competition (Rasler and Thompson , ; Schultz and Weingast , ; Slantchev ). As one would expect, the ability to outspend and outlast adversaries provides an advantage to states in fighting wars and deterrence.…”

Section: On Borrowed Dimementioning

confidence: 99%

“…Modern economic historians and several political scientists have addressed the relationship between access to sovereign credit and military power within the framework of major power competition or under the assumption of unitary state actors (Rasler and Thompson ; Kennedy ; Brewer ; Schultz and Weingast ; Slantchev ) . While they make important contributions, this paper adds that credit influences the domestic political economy of foreign policy decisions beyond serving as a source of power.…”

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confidence: 99%

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The Fiscal Autonomy of Deciders: Creditworthiness and Conflict Initiation

DiGiuseppe

2014

Foreign Policy Anal

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Liberal theory claims that the constraint taxpayers impose on military expenditure is an important mechanism through which democracy and international commerce help prevent conflict. However, leaders with affordable access to sovereign credit have often overcome this constraint by raising revenue on credit markets. By minimizing or deferring the economic burden imposed on taxpayers and the macroeconomic stress associated with alternative financing strategies, I argue that these leaders have greater autonomy to pursue an aggressive foreign policy if they so desire. Leaders that lack creditor confidence risk increased political opposition and removal from office if hostilities generate macroeconomic stress or disturb the domestic fiscal balance. They also face a higher likelihood of defeat or retreat, and the subsequent political consequences, if they pursue conflict without sufficient resources. Estimates of a heteroskedastic probit model support this hypothesis and indicate that creditworthy states initiate conflict with a greater mean probability and greater variance than their noncreditworthy counterparts.

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Section: On Borrowed Dimementioning

confidence: 99%

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confidence: 99%

The Fiscal Autonomy of Deciders: Creditworthiness and Conflict Initiation

DiGiuseppe

2014

Foreign Policy Anal

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“…Although we do not focus on the use of credit to fund wars (for example, Schultz and Weingast ; Slantchev ), our analysis bears on this relationship because the ability of governments to borrow rests on expectations about future streams of public revenues.…”

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confidence: 99%

The Domestic Politics of Strategic Retrenchment, Power Shifts, and Preventive War

2014

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We present a formal model of international bargaining between two states in which one government must negotiate with a domestic opposition faction to secure tax revenue for military spending. The model examines how robust the international order is to domestic political crises that activate a stark trade-off to a governing coalition. Namely, offering fiscal relief to stave off domestic revolution can simultaneously undermine the larger international political order by facilitating military spending that can, under some circumstances, result in sizable shifts in the relative distribution of military power between states. We find that two key domestic conditions influence the likelihood of preventive war: the distribution of income within the state's economy and the relative economic stake that opposition groups possess in international settlements. Patrick J. McDonald is an associate professor of Government at the University of Texas at Austin. His current research examines systemic theories of international politics.

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“…In that case, Fearon's puzzle would not longer apply since players would be choosing war because it is the most efficient way to divide the benefit. This might seem uninteresting until one asks what might make war, which we all agree is costly and risky, a more efficient dispute resolution mechanism than peace (Coe, 2011;Slantchev, 2012). Whatever interesting answers this line of inquiry provides, its indebtedness to the original puzzle is beyond doubt.…”

Section: Making the Abstract Concretementioning

confidence: 99%