In the years preceding and following the end of the Cold War, there was an explosion of economic literature devoted to the study of international wars. (Hirshleifer 1987, 1994; Grossman 1991) Neoclassical models of conflict based on methodological individualism and rational choice began to proliferate. In these models, nations were ...
(Show more)In the years preceding and following the end of the Cold War, there was an explosion of economic literature devoted to the study of international wars. (Hirshleifer 1987, 1994; Grossman 1991) Neoclassical models of conflict based on methodological individualism and rational choice began to proliferate. In these models, nations were assumed to be rational agents maximizing political or economic power. Following the precepts of “economic imperialism”, some economists thought that economic analytical tools could be used to study international politics per se – and not only to pinpoint the economic factors affecting or resulting from political decisions. (Hirshleifer 1985)
Our aim is to elucidate the historical conditions explaining the birth and immediate success of this literature. (1) We also study how historical changes associated with the end of the Cold War shaped economic models of conflict. (2)
(1) We suggest that the development of public choice theory in the 1960s and, more generally, the extension of the neoclassical theoretical framework to the analysis of non-economic issues in the 1960s and 1970s provided a fertile soil (and an audience) for rational choice theories of international conflicts in American universities. (Becker 1976, Buchanan & Tullock 1962) We show how these ideas progressively filtered into American policy debates and into international organizations’ research initiatives (especially through World Bank researchers).
(2)We show how the historical changes of the period –end of bipolarity, dislocation of the balance of power, new international conflicts and civil wars – influenced the way in which economists modeled wars. Economists imported concepts of international relations theory to enrich their analysis.
Selected References
Becker, Gary S.1976. The Economic Approach to Human Behavior. The University of Chicago Press.
Buchanan, James M. and Gordon Tullock.1962. The Calculus of Consent. Ann Arbor: University of Michigan Press.
Grossman, H I. 1991. “A general equilibrium model of insurrections,” American Economic Review, 81, 912–921.
Hirshleifer, Jack. 1985. “The Expanding Domain of Economics,” The American Economic Review, 75.6: 53-68.
Hirshleifer, Jack. 1987. “Conflict and settlement,” In J. Eatwell, M. Milgate, & P. Newman (Eds.), New Palgrave dictionary of economics. London: Macmillan Press.
Hirshleifer, Jack. 1994. “The dark side of the force,” Economic Inquiry, 32, 1–10.
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