"Fifty-four Forty or Fight!"

Abstract

This paper develops an explanation for historical differences in the ways in which territorial disputes between sovereign states have been resolved. The main innovation in the analysis is to allow for three possible equilibria:·A an unfortified border; ·A a fortified but peaceful border; and ·A armed conflict.The analysis shows that the possibility of a credible agreement to divide a contested territory and to leave the resulting border unfortified depends on the effectiveness of spending on arms by one state relative to another and on the importance that states attach to the potential costs of future armed conflicts. The analysis also shows that, if all relevant parameters are common knowledge, then, even if an agreement to have an unfortified border would not be credible, states can resolve a territorial dispute peacefully by dividing the contested territory and fortifying the border. Finally, the paper points out that unverifiable innovations, especially innovations in military technology, can cause a peaceful settlement to break down, resulting in an armed conflict that in turn can provide the basis for a new peaceful settlement. Today a territorial dispute between the United States and Canada, much less an armed conflict over the border between the United States and Canada, is unimaginable. In the decades following the Oregon Treaty the United States and Great Britain peacefully resolved territorial disputes that arose over the San Juan Islands, rights to hunt fur seals, and the boundary of Alaska. These agreements completed the demarcation of the current borders between the United States and Canada, which have now been both undisputed and unfortified for many years.1 The origin of the slogan is obscure. Both Edwin Miles (1957) andHans Sperber (1957) conclude that, contrary to some accounts, it was not used during the election campaign of 1844, but originated during the congressional debates that followed the election. 1In sharp contrast to the peaceful resolution of the dispute over the Oregon territory, in the same year, 1846, a territorial dispute between the United States and Mexico led to armed conflict, with disastrous consequences for Mexico. As the result of the Mexican-American War the United States annexed previously Mexican territories that now comprise Arizona, California, Nevada, New Mexico, Utah, and parts of Colorado and Texas. 2As a schoolboy I learned with pride that the United States and Canada enjoyed the world's longest unfortified border between sovereign states. In addition, my elders led me to believe that this happy state of affairs resulted from the moral superiority of Americans and Canadians, especially in contrast to Mexicans and also to Europeans, who, being greedy and quarrelsome, fortified their borders and, even worse, regularly engaged in wasteful and destructive territorial conflicts, the Second World War that had just ended being the latest example.This paper develops a analysis that yields a less invidious explanation for historical differences in the ways in whic...