Growth, Import Dependence, and War

Bonfatti, Roberto; O’Rourke, Kevin

doi:10.1111/ecoj.12511

Cited by 17 publications

(7 citation statements)

References 35 publications

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“…11 Also see Bonfatti and O'Rourke (2018), who consider the role of increasing trade dependence for two adversarial countries with the rest of the world, in a dynamic, leader-follower setting, to influence the likelihood of a preemptive war by the follower. In that analysis, similar to ours, understanding the emergence of conflict between the two countries does not hinge on differences in the size of their economies.…”

Section: Introductionmentioning

confidence: 99%

Arming in the global economy: The importance of trade with enemies and friends

Garfinkel

Syropoulos

Yotov

2020

Journal of International Economics

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We analyze how trade openness matters for interstate conflict over productive resources. Our analysis features a terms-of-trade channel that makes security policies trade-regime dependent. Specifically, trade between two adversaries reduces each one's incentive to arm given the opponent's arming. If these countries have a sufficiently similar mix of initial resource endowments, greater trade openness brings with it a reduction in resources diverted to conflict and thus wasted, as well as the familiar gains from trade. Although a move to trade can otherwise induce greater arming by one of them and thus need not be welfare improving for both, aggregate arming falls. By contrast, when the two adversaries do not trade with each other but instead trade with a third (friendly) country, a move from autarky to trade intensifies conflict between the two adversaries, inducing greater arming. With data from the years surrounding the end of the Cold War, we exploit the contrasting implications of trade between enemies versus trade between friends to provide some evidence that is consistent with the theory.

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Section: Introductionmentioning

confidence: 99%

Arming in the global economy: The importance of trade with enemies and friends

Garfinkel

Syropoulos

Yotov

2020

Journal of International Economics

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“…Unlike Figure 4, we assume now that the cost of war is low enough so that empire-building is an equilibrium for some parameter values. The …rst new result is that there is an age of empires if and only if the following condition holds: 18 We see here the role played by the assumption that core localities cooperate. If core localities choose empires noncooperatively, there might be equilibria in which empires are formed when…”

Section: Globalization and Political Structurementioning

confidence: 77%

Globalization and Political Structure

Gancia¹,

Ponzetto²,

Ventura³

2016

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The first wave of globalization witnessed a decline in the number of countries from 125 to 54. Political consolidation was often achieved through war and conquest. The second wave of globalization (1950-present) has led instead to an increase in the number of countries to a record high of more than 190. Political fragmentation has been accompanied by the creation of peaceful structures of supranational governance. This paper develops a theoretical model of the interaction between globalization and political structure that accounts for these trends and their reversal. We show that political structure adapts to steadily expanding trade opportunities in a non-monotonic way. Borders hamper trade. In its early stages, the political response to globalization consists of removing borders by increasing country size. War is then an appealing way of conquering markets. In its later stages, however, the political response to globalization is to remove the cost of borders by creating international economic unions. As a result, country size declines and negotiation replaces war as a tool to ensure market access.JEL Codes: D71, F15, F55, H77, O57

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“…Tooze (2006) and Michael Barnhart (1987) have shown how a concern to achieve strategic self-sufficiency was both a cause and an effect of the drive to war during the interwar period in Germany and Japan respectively. Roberto Bonfatti and O'Rourke (2018) show more generally how a follower country's strategic dependence on imported raw materials can, in conjunction with the naval hegemony of an established power, give the follower country an incentive to launch pre-emptive wars in the hope of gaining strategic self-sufficiency. Higher costs of war in high-wage globalized economies can also give politicians an incentive to gamble on rapid offensives, in the hope of striking a knockout blow (Eloranta and Harrison 2010, p. 137).…”

Section: World War Imentioning

confidence: 99%