Weingast B.R., Wittman D. The Oxford Handbook of Political Economy
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832 international conflict
of conflict into investigations of all other aspects of politics. Where once national
interest was at the forefront of research on international affairs, increasingly the
study of the political ambitions of and institutional constraints faced by leaders is
supplanting concern about the national interest. Indeed, insights from spatial models
and other approaches to domestic politics challenge the fundamental meaning of “the
national interest.” When it is possible to assemble many majority coalitions around
competing interests within the same population of national decision-makers it is
difficult to say that the interests backed by one coalition are closer to the national
interest than the policies backed by another coalition (McKelvey 1976, 1979;Schofield
1978).
In this chapter I touch upon some debates regarding international affairs and the
ways we go about studying conflict and peace. International relations scholarship can
loosely be divided into those who focus on such structural aspects of the international
system as the global distribution of power, or the alignment of nations into two
blocs—the bipolar world of the cold war—or many blocs and those who attend to
the ways in which domestic political dynamics shape international relations. For
much of the post–Second World War years, structural perspectives including neo-
realism (Waltz 1979; Glaser 1992;Schweller1994, 1997), liberalism (Keohane and
Nye 1977;Keohane1984), and power transition theory (Organski 1958; Organski and
Kugler 1980; Tammen et al. 2000;Lemke2002) have contended for domination as
explanations of variance in cooperative and conflict-prone behavior. By structural
perspectives I mean theories, such as those just listed, for which the central concern
is how aggregate characteristics of the international system such as the distribution of
power or distribution of wealth among states (as rational unitary actors) determines
interactions leading to international conflict or cooperation.
Neorealism treats international affairs as anarchic; that is, a self-help system lacking
a dominant power that can enforce agreements. It hypothesizes that political stability
in the form of the survival of states is ensured by national efforts to maximize
security through alignments. Its focus is on explaining conflict and constancy in
relations among states under the supposition that war is the natural state of affairs.
Liberalism countered by assuming that international relations are hierarchic rather
than anarchic and that a hegemonic power, such as the United States, stands atop the
international system. Its focus is on the prevalence of cooperation rather than conflict
and so naturally draws researchers into investigations of such international political
economy arenas as trade policy, the use of economic sanctions, and international
banking policy. The power transition shares with liberalism a focus on hierarchical
power relations but centers its attention on how domestic economic growth might
influence the risk of system-transforming wars; that is, wars that fundamentally alter
who is on top and, therefore, what policies or norms of action are imposed on the
community of nations.
During the past decade there has been a shift away from structural perspectives
toward ones that look at how domestic political institutions constrain and create
incentives that shape cooperation and conflict (Putnam 1988; Bueno de Mesquita
and Lalman 1992;Fearon1994;DownsandRocke1995;Schultz1998, 2001a; Bueno
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de Mesquita et al. 1999;Werner1996; Goemans 2000; Bueno de Mesquita et al. 2003;
Gartzke and Gleditsch 2004).
The purpose of this chapter is to survey both categories of perspectives and to high-
light how different the view of international politics is when focused on political lead-
ers responding to domestic political incentives rather than unitary states responding
to aggregate characteristics of the collectivity of states. To this end, this chapter
proceeds as follows. Section 2 examines structural perspectives. Section 3 discusses
the evolving research programs that look inside the state to grasp how conflict or
cooperation relates to ordinary politics. Section 4 illustrates the differences across
approaches by selecting two empirical issues, briefly evaluating how different ap-
proaches address these issues. The two empirical puzzles are (1)thedifference be-
tween the record of nation-building following military intervention and the claimed
intentions of interveners, and (2) reconciliation of the existence and use of foreign aid
as a policy instrument and the record of its ineffectiveness in alleviating poverty.
2 Structural Theories
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In this section I summarize key claims and evidence from the two most prominent
structural theories: neorealism and the power transition. Although liberalism is an
equally important strand of theorizing, its focus on cooperation places it somewhat
outside my purview. Therefore, other than in passing commentary, I overlook the
strengths and weakness of this approach. Those interested in this aspect of inter-
national relations research might see Morrow (1994), Levy (1998), and Simmons
(1998) for insights into alternative ways to think about problems of coordination and
cooperation. Space constraints preclude discussing other structural perspectives.
2.1 Neorealism
The structural point of view is most prominently represented in Kenneth Waltz’s
(1979) neorealist theory. Neorealism begins with a handful of seemingly straight-
forward, innocuous, and parsimonious assumptions. These include the view that
international politics is anarchic, states seek to maximize their security against threats
to sovereignty; bipolar environments produce substantially less uncertainty about the
responses of other states to crises than do multipolar environments; and states seek to
increase their power unless doing so is expected to put their security at risk later on.
By definition, an anarchic international system, as intimated earlier, is one in
which states cannot make binding commitments enforced by some supernational
authority or hegemonic state. Therefore, international politics is best characterized
as a non-cooperative game. It is a game in which all states are assumed to share
common goals: to make themselves secure and, subject to achieving security, to make
834 international conflict
themselves more powerful. Neorealists also assume that international interactions
arise in a prisoner’s dilemma setting (Waltz 1979, 109; Gowa and Mansfield 1993),
but, incongruously, also argue that because power is relative, gains for one state must
mean losses for others (Waltz 1979, 170–1;Grieco1988), suggesting a zero sum game.
Of course, one cannot logically hold simultaneously that international affairs are
characterized as a prisoner’s dilemma and as a zero sum game. Some have tried to
repair this contradiction by introducing additional parameters into a simple game
form that allows the game, under different parameter values, to morph into either
the prisoner’s dilemma or a zero sum game (Snidal 1991;Powell1991). In the end
there is not much evidence to support the belief that much insight into international
affairs is acquired by focusing on the extent to which decision-maker utility functions
revolve around relative gains or absolute gains.
Neorealistsgoontoarguethattoimprovesecurityortogainpower,statescluster
together in blocs that serve as self-help mechanisms. When all states are aligned into
only two blocs with each bloc dominated by one especially powerful state, everyone
can be certain about how everyone else will react to a crisis. With more than two blocs
and more than two large powers, crises engender more uncertainty because a pair of
states in a dispute involving two blocs cannot be certain about how those in other
blocs will respond. Here, the literature conflates the idea of bipolarity or multipolarity
with complete and perfect information or uncertainty.
The core hypotheses of neorealism are generally thought to be that:
1. Bipolar systems, because they involve little or no uncertainty, are more stable
than multipolar systems (Waltz 1979);
2. Power tends to become balanced because imbalances place some states’ survival
at greater risk (Niou, Ordeshook, and Rose 1989); and
3. Alliance partners’ responses to threats in a multipolar environment depend
on perceived dependence on one’s allies or complacency toward the alliance
structure (Christensen and Snyder 1990).
Several formal models attempt to capture essential elements of neorealism. One
reason why there is more than one such model is that neorealists tend to disagree
about the exact meaning of some fundamental concepts, such as security or stability
(Elman and Vasquez 2003; Volgy and Bailin 2003). Different formalizations emphasize
different meanings attributed to core concepts while placing the informal arguments
of neorealists in a political economy framework that helps uncover precise implica-
tions and potential sources of inconsistency.
Niou, Ordeshook, and Rose (1989), for instance, present a model of an anarchic,
self-help system in which states seek survival above all else. Their model demon-
strates that stability has two distinct characteristics that are conflated in informal
examinations of neorealism and the balance of power. One, which they call system
stability, refers to environments in which no states—that is, no members of the
international system—cease to exist so that the composition of the system remains
fixed. The other, which they call resource stability, is achieved when the distri-
bution of power does not change among the states in the international system.
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They note that the international system can experience system stability without
resource stability.
Niou et al. deduce four theorems that seem consistent with neorealist expectations
about the stability of the international system. These theorems, stated informally here,
indicate that essential states—states whose resources are necessary to avoid such an
imbalance of power that there is system instability—are never eliminated from the
international system; essential states never become inessential; inessential states never
become essential; and inessential states are always eliminated from the international
system. They also show that an infinite variety of distributions of power are consistent
with system stability though not necessarily resource stability in a multipolar setting.
These distributions of power all meet the criteria for being balances of power in the
logical, if not the intuitive, sense of that term. Thus, the phrase “balance of power”
appears to have little discriminatory power in their formal representation of neoreal-
ism. What is more, all four of the theorems that follow from their formalization are
empirically false.
By way of illustration, we can surely agree that the Soviet Union and Austria-
Hungary were essential states that no longer exist. The United States, inessential in the
late 1700sorearly1800s, is obviously essential today. Contrary to the theorems, states
rise and decline in their essentialness and states come and go in terms of existence.
Indeed, so prevalent is state failure that it is a topic of current research (Beck, King,
and Zeng 2000).
Robert Powell’s (1993) formalization of neorealism shows that under conditions of
anarchy, pursuit of national security is unlikely to dominate state resource allocations.
Contrary to views expressed by Waltz (1979) and earlier realists, peace and stability
can be achieved while spending relatively little on defense. Contrary to a basic tenet
of realist thought, neither war nor its imminent threat is the normal state of affairs in
anarchy. Powell examines the trade-off between consumption spending and defense
spending and demonstrates that equilibrium defense spending in a bipolar system
is rather modest if the environment is anarchic. He shows that a small amount of
military spending is sufficient to deter the threat of an attack by a would-be attacker
who is interested in improving her people’s future consumption and that, since this
holds for both parties to a potential arms race, neither has an incentive to spend above
the minimal amount needed to achieve successful deterrence.
Additionally, Powell demonstrates that a long shadow of the future (i.e. patience)
can decrease cooperation and increase the risk of conflict. His result depends on the
timing of costs and benefits. By giving up some consumption now to spend more on
arms—that is, adopting a strategy of defection—a state can create a first-strike ad-
vantage that improves its chances of gaining a future stream of consumption benefits
if the adversary does not sacrifice current consumption for arms. Thus, unlike the
well-known folk theorem applied to repeated prisoner’s dilemmas, Powell presents
a game in which defection—arms rather than consumption—today yields greater
benefits tomorrow because of a current military advantage instead of yielding a larger
benefit today (the PD temptation payoff P) resulting in long-term punishment and,
therefore, loss of expected benefits over time. This latter result contradicts a central
836 international conflict
claim in the research agenda put forward by neoliberals (Axelrod 1984;Axelrodand
Keohane 1986).
Bueno de Mesquita and Lalman (1992) construct a realist and a domestic variant
of their international interaction game from which they deduce several propositions.
In keeping with neorealist expectations, they show that an imbalance of power is
a logically necessary, but not sufficient, condition for war in the realist variant.
Additionally, they show that regardless of information conditions, it is impossible
in the realist variant for one state ever to choose to acquiesce to the demands of
another state. Finally, they demonstrate that war in the realist variant can only arise as
a consequence of uncertainty in keeping with Waltz’s hypothesis about the different
risks of instability under bipolarity and multipolarity. This is in contrast to their
demonstration that commitment problems can lead to war even with complete and
perfect information. Fearon (1995), in fact, identifies three rationalist explanations
for war: asymmetric information, commitment problems, and a dispute over indivis-
ible goods. Chiozza and Goemans (2004) suggest that when we focus on individual
decision-makers rather than states the number of rationalist explanations for war
proliferates still further.
The empirical record contradicts the three neorealist hypotheses Bueno de
Mesquita and Lalman (1992) deduce from their realist variant of the international in-
teraction game and supports at least partially the propositions that follow from their
domestic variant (Bueno de Mesquita and Lalman 1992; Signorino 1999; Smith 1999;
Bennett and Stam 2000), thereby reinforcing the evidence associated with Niou et al.’s
formalization, suggesting that the realist account is poorly supported by evidence.
2.2 Power Transition
Power transition theory was first developed by A. F. K. Organski (1958)andthenre-
fined by Organski and Kugler (1980), Tammen et al. (2000), Lemke (2002), and others.
It views international politics as hierarchic rather than anarchic. It assumes that all
states are interested in imposing international organizations, institutions, rules, and
regulations that govern international intercourse on the international system. States
are assumed to maximize their control over “the rules of the game” or the status quo
norms and policies in the international system, ideas also echoed by Gilpin (1981)and
by Krasner (1983) in developing the literature on international regimes.
Power—or relative material resources—is taken as exogenously given and is as-
sumed to be the determinant of who controls international affairs. The most powerful
state sits at the apex of a power pyramid in which those below the apex aspire to rise to
challenge the dominant state for control of the “rules of the game.” States are assumed
to be divided into two broad coalitions. Those in the satisfied coalition find the
dominant state’s rules and norms acceptable while those in the dissatisfied coalition
do not. The opportunity to challenge for control arises when a dissatisfied state’s in-
ternal growth rate is fast enough relative to the dominant state’s that the “challenger”
can be expected to pull equal in power to and then overtake the dominant state. In
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the temporal window during which this power transition occurs, war is predicted to
be likely if the challenger is dissatisfied (as in the Franco-Prussian War of 1870–1). A
peaceful transition is anticipated if the challenger is part of the satisfied coalition (as
between the UK and the USA in the twentieth century).
Two formalizations of power transition suggest important modifications to this
theory. Kim and Morrow (1992) show that the likelihood of war is not materially
influenced by differences in the growth rates between challengers and the dominant
state. This is so because a more rapid growth rate for the so-called challenger makes
waiting to attack more attractive. The longer the challenger waits, the better its
chances of prevailing. At the same time, rapid growth by the challenger makes delay
risky for the declining dominant state because that state’s odds of victory are decreas-
ing with time. Who will move first and whether the contenders will fight or resolve
their transition peacefully depends on their respective willingness to take risks as it is
the degree of asymmetry in the shape of their utility functions, and not growth rates
per se, that determines the trade-off between fighting now, fighting later, or never
fighting. Kim and Morrow’s formalization also shows that equality of power is not
an inherently critical factor determining the risk of war. Their theoretical claims are
buttressed by substantial empirical tests that are consistent with their formalization
and that depart significantly from claims made in informal statements of the power
transition theory.
Powell (1996) replicates the theoretical structure of the power transition in his
investigation of the consequences of appeasement and the risks of what he calls
salami tactics by which the dominant state slowly gives very small bits of value
away until eventually nothing is left. Except under special conditions that include
the anticipation of a reversal in the declining fortunes of the dominant state, Powell
demonstrates that with incomplete information about the demanding state’s satiation
point for extracting resources from the rival, there are numerous conditions that
lead to or away from war and that with complete information war never arises as
an equilibrium outcome in his power transition/appeasement game. Like Kim and
Morrow, Powell fails to find support for the central tenets of the power transition
theory or for balance of power theory.
2.3 Summary
Neorealism and power transition focus on states as the central actors in international
politics. For neorealists, what happens within states is largely irrelevant for under-
standing the stability of the international system or the security of states. Each state
is assumed to have an abiding interest that any leader follows. For power transition
theorists, conditions within states matter to the extent that they influence growth
rates, but those conditions are assumed to be exogenously fixed and immutable. The
two theories differ in their view of international politics, with neorealists assum-
ing that international politics is anarchic and power transition theorists assuming
it is hierarchic. They also disagree about what the goals are that are pursued by
838 international conflict
states: security or control over the “rules of the game.” Although the power transition
assumes that different states have different policy goals in mind (i.e. different rules),
its predictions are not driven by the substantive differences in goals. Thus, domestic
political competition over national policy plays no part in either power transition
theory or neorealism.
The empirical record does not support the main claims of neorealism and only
partially supports the core claims of power transition theory. One apparently well-
established empirical regularity in particular—the democratic peace—has raised se-
rious doubts about the centrality of these and other theories concerned with system
structure or with theories that treat the state as a unitary actor. Several empirical
regularities are associated with what has come to be called the democratic peace. Fore-
most among these is the observation that democracies rarely, if ever, fight wars with
each other while democracies and autocracies fight with one another (and autocracies
with other autocracies) with regularity. The evidence for these and other democratic
peace regularities highlights the realization that domestic characteristics of regimes
lead to sharply different patterns of foreign policy behavior, a fact that cannot be
true if states are rational unitary actors whose patterns of behavior are determined by
factors outside the domestic politics of the state as argued by structuralists.
3 Domestic Politics and International
Relations
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The state-centric view has been challenged by those who contend that international
politics is a product of the normal pulls and tugs of domestic affairs; that leaders—
not nations—make policy decisions and do so to maximize their prospects of staying
in office. Leaders’ decisions are therefore strategic and, taking into account expected
responses by adversaries and supporters, designed to maximize the leader’s (not
the state’s) welfare. In this perspective, the motivations, interests, and constraints
imposed on individual decision-makers are what shape how political leaders, acting
in the name of their states, interact with one another.
This research ties together international politics, foreign policy, and domestic
politics; as such, it leads to implications incompatible with the received wisdom
of realism or the power transition. The various models that tie domestic politics
directly to international relations, for instance, provide little basis for believing that
the distribution of power is crucial for understanding the likelihood, severity, or
resolution of disputes. Domestic approaches give scant attention to whether alliances
are organized to create a bipolar or multipolar international environment. And such
an approach dismisses the tenet that states seek to maximize power, security, control
over the rules governing international interactions, or the national interest.
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In place of a focus on states as decision-makers, the domestic perspective, as I will
call it here, draws attention to the taxing and spending incentives and constraints cre-
ated by different domestic governing institutions and to how those institutions help
shape variations in international and domestic policy choices. I briefly summarize
the key ideas, and then offer some examples of how these ideas work in elucidating
international politics and the study of conflict in particular.
Let us suppose that political leaders want to maximize their prospects of gaining
and staying in power (Downs 1957;Riker1962;DownsandRocke1995; Bueno de
Mesquita and Siverson 1995; Bueno de Mesquita et al. 1999, 2003; Goemans 2000).
They choose actions, therefore, that help advance that objective. If those actions
happen also to be beneficial for the rest of the people in the society they lead, so much
thebetter,butthatwhichmakesleadersbetteroff need not also make their subjects
better off (Robinson 1998; Bueno de Mesquita and Root 2000). Indeed, it is difficult
to see how we can explain the actions of totalitarians and even petty dictators if their
interests and the state’s interests—that is, the welfare of the citizenry—are taken as
being the same. Even when the state faces war, the interests of leaders and citizens can
diverge markedly depending on how governing institutions influence the tie between
victory or defeat in war and political survival for the incumbent leadership (Bueno
de Mesquita et al. 2004; Chiozza and Goemans 2003, 2004). Of course, these disparate
interests are taken as the same in theories that treat the state as a unitary actor.
Different theories—some complementary and some in competition with one
another—suggest explanations of international conflict from the perspective of do-
mestic politics, a topic also closely examined by Stam and Reiter in this volume.
Maoz and Russett (1993), Russett (1993), and others suggest a norms-based theory
of international conflict. Bueno de Mesquita et al. (1999, 2003) suggest what they call
the selectorate theory of politics to explain how political institutions shape leaders’
policy decisions. Fearon (1994)offers a perspective on crisis escalation grounded
in what he calls audience costs, with those costs varying as a function of key fea-
tures of a state’s institutional set-up. Smith (1996) points to selection effects over-
looked in Fearon’s treatment and that help refine predictions about the impact of
audience costs on conflict. Schultz (1998, 2001a) reflects on the role of opposition
parties in democracies in disciplining foreign policy choices in a way fundamen-
tally different from what one expects in autocracies, or other institutional arrange-
ments that make political opposition especially costly. These approaches lead to
propositions—many of which are testable and have been tested—that suggest empiri-
cal patterns that ought not to be observed if neorealist or other structural perspectives
are correct.
3.1 Normative Explanation of Conflict and Regime Differences
The literature on the democratic peace creates a critical challenge to the core ideas
behind theories that treat the state as a unitary actor. In the latter theories, the internal
workings of states are thought to be irrelevant to decisions related to challenges to
840 international conflict
national survival. Yet the empirical record indicates that war involvement and war
fighting differ markedly depending on whether a state is organized as a democracy
or an autocracy. These observations have given rise to numerous domestic political
explanations of empirical regularities regarding war.
The normative explanation of the democratic peace argues that people in democ-
racies are experienced with compromise and negotiation and so use these modes
of conflict resolution rather than war when confronting one another (Maoz and
Abdolali 1989; Maoz and Russett 1993; Russett 1993).Thenormativeaccountgoes
on to argue, in a quasi-realist fashion, that when democrats confront autocrats,
democrats adopt the norms of aggression and bullying used by autocrats lest they
put their own national survival at risk by seeking compromise with adversaries who
prefer force over concessions.
The normative account is consistent with the observation that democratic dyads
rarely, if ever, fight wars; that autocratic dyads fight; and autocrats and democrats
fight each other. But, putting aside the danger that the normative account appears to
assume the answer to these puzzles, it suffers from important empirical problems. For
instance, the normative domestic account fails to explain why democrats use force
against much weaker societies as in many wars of imperial and colonial expansion.
Since the targets in those wars did not represent a threat to the survival of the de-
mocrats who initiated conflict, the normative account does not explain the choice by
democrats to adopt non-democratic norms of behavior. Because of these weaknesses,
the normative account has been challenged by more formalized models of domestic
politics that rely on structure-induced equilibria.
3.2 Institutional Constraints
Portions of the democratic peace have also been studied from the perspective that
institutional arrangements constrain the range of available responses to conflict.
Morgan and Campbell (1991), for instance, argue that democracies have a harder time
choosing actions because of their procedures for making policy decisions. Maoz and
Russett (1993, 626; emphasis added) elaborate on this point, maintaining that:
due to the complexity of the democratic process and the requirement for securing a broad base
of support for risky policies, democratic leaders are reluctant to wage wars, except in cases
wherein war seems a necessity or when the war aims are seen as justifying the mobilization
costs. The time required for a democratic state to prepare for war is far longer than for nondemoc-
racies. Thus, in a conflict between democracies, by the time the two states are militarily ready
for war, diplomats have the opportunity to find a nonmilitary solution to the conflict.
Evidence regarding the time it takes democrats to prepare for war compared to non-
democrats is just beginning to appear in the literature so that this hypothesis about
institutional constraints remains an open question. It is a proposition challenged by at
least one domestic theory that examines institutionally induced incentives as distinct
from constraints.
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An alternative, more fully formalized theory of institutional constraints examines
what Fearon (1994) calls audience costs. The contention here is that when democratic
leaders threaten military action they pay a heavy domestic political cost if they sub-
sequently back down. Because autocrats do not depend on re-election they are less
vulnerable to these domestic audience costs. Fearon demonstrates theoretically that
audience costs create important selection effects in disputes involving a democracy.
Democratic leaders must be careful about the disputes in which they become involved
and, if the dispute is not resolved peacefully to their satisfaction, they are more likely
than autocrats to escalate in pursuit of a successful outcome.
Although there have been empirical efforts to test the audience costs argument
(e.g. Partell and Palmer 1999), Schultz (2001b) cautions that empirical tests are likely
to be misleading. He notes that selection effects operate so that the observed cases
of audience costs are drawn from a distribution with a smaller expected mean than
one would expect in the full population of conflict opportunities for democracies.
Therefore, it is difficult to draw inferences about audience costs from the inherently
biased sample of observed cases.
Schultz (1998, 2001a)offers an alternative argument to explain differences in the
willingness of democrats and autocrats to take foreign policy risks. He notes that
democracies make political opposition in pursuit of political power relatively cheap
compared to opposition in autocracies. That is, autocrats are prone to oppress and
even kill opponents (Poe and Tate 1994; Poe, Tate, and Keith 1999; Bueno de Mesquita
et al. 2003), while political opposition is a normal, routine aspect of democratic
politics. Because would-be domestic opponents are more effectively deterred in non-
democratic regimes, leaders under such institutions are deprived of the informational
benefits of opposition if they choose foreign policies that others anticipate will lead
to bad outcomes.
Schultz maintains that opposition parties in democracies are unlikely to oppose a
foreign policy pursued by the incumbent leader if that policy is expected to succeed.
After all, opposition to a successful policy is unlikely to attract support to the rival
party and so does not improve the prospects of election. But if the foreign policy
is expected to fail, then the political opposition is likely to speak out against it in
order to gain political support. Seeing such opposition, the incumbent can infer
that the policy is believed to be unlikely to succeed and so is compelled by personal
political ambition to review it closely. Sometimes, of course, the review will not
produce a change in policy, but sometimes it will. Thus, the presence of opposition
acts as a signal that can discipline the incumbent not to be overly venturesome in
foreign policy (or stimulate foreign rivals to take advantage of caution on the part
of democratic incumbents). The absence of such a legitimate opposition mechanism
in autocracies means that autocrats are likely to choose foreign actions with higher
variance in the ex post outcome and with limited consequences for their domestic
political survival. Schultz’s argument, then, offers a domestic perspective from which
leadership survival considerations under different institutional arrangements influ-
ence the direction of international politics while also implying that a norm of non-
partisan foreign policy can increase the risks of conflict involvement.