Seminar

A Theory of Economic Interdependence and War

Alexandre Debs (University of Yale)

October 24, 2013, 11:00–12:30

Toulouse

Room MF 323

Development Economics Seminar

Abstract

What are the causes of hegemonic wars among interdependent great powers? We argue that an economically dependent challenger faces a hold-up problem, when deciding whether to engage a hegemon peacefully. The hegemon cannot commit to offer generous terms of peace, given its domination of the international political economy. War may be inevitable when the inefficiency of peace created by the hold-up problem is greater than the cost of war. The inefficiency of peace increases with the dependence of the challenger. This argument explains why a challenger may go to war, even if it expects its relative power to rise if peace prevails. It counters the long-held view that only declining states have incentives for fighting. We use our theory to provide a novel account of the deep causes of World War II in Europe and the Pacific.