Economic Interests and War: An Analysis of U.S. Foreign Policy, Papers of Introduction to Sociology

Download Economic Interests and War: An Analysis of U.S. Foreign Policy and more Papers Introduction to Sociology in PDF only on Docsity! 1 Samuel Seljan Department of Political Science University of California, San Diego Dissertation précis - “Economic Interests in the Domestic Politics of War” Do a nation’s commercial interests favor peace? Do those that stand to profit from war promote belligerent state behavior? Or, do heterogeneous economic actors instead share similar preferences over the use of force, regardless of the economic sector in which they conduct business? Answers to these questions lie at the heart of several competing theories of interstate conflict. My dissertation reexamines this classic issue with rigorous theory, modern methods, and innovative data. In particular, my dissertation evaluates key links in the causal chain connecting individual economic interests with U.S. foreign policy. My results provide fresh theoretical and empirical insights into the ways in which economic incentives motivate both dovish and hawkish security policy preferences. These insights, moreover, provide micro-foundations for richer and more complete political economy theories of war. In the dissertation, I weave together international trade theory, an asset theory of individual interests, and a bargaining model of war to explain how and why actors from the same country have different economic interests in interstate disputes. In particular, I explain why wars typically affect sectors differently, how and why sectoral outcomes are translated to individuals, and why variation in economic interests produces polarization in preferences over the use of force. Finally, I show that economic interests matter for individuals even though they may face similar strategic incentives to misrepresent their resolve or doubt the credibility of foreign states. Each of these claims is subjected to careful empirical testing. I conduct well-designed event studies of the 1991 Gulf War and the Iraq War of 2003 using stock market data to provide detailed information about how the consequences of war differ across economic sectors. I then show that sector-level variation in the costs and benefits of war helps explain congressional votes authorizing the use of force in 1991 and public support for the war with Iraq in 2003. Together, these analyses provide the information necessary to validate my asset theory of security policy preferences. The results demonstrate conclusively that economic interests matter in the formulation of security policy preferences in at least two major wars and, I argue, others as well. Thus, the dissertation provides theoretical and empirical support for key mechanisms driving political economy theories of war, mechanisms which have previously been either vaguely specified or unexamined. Rather than solely verifying existing traditions, my findings enhance our understanding of economic interests in war. Of course, it would be inappropriate to assume that causal relationships at the individual level of analysis map directly onto state-level behavior. Rather, the bargaining model in the dissertation suggests why economic interests should sometimes matter, though not always in obvious ways. Hence, the results of the dissertation provide the foundation for developing new hypotheses about the role of economic interests and domestic politics in war, which is the next step in my research agenda. Relationship to Existing Literature The now canonical bargaining model of war largely brackets preferences and attributes war to private information with incentives to misrepresent or problems of credible commitment. In the standard setup, owed to James Fearon (1995) and Robert Powell (1999, 2006), issues in a dispute between countries are arrayed across a zero-one space, and can represent any possible issue on which countries disagree. Although the bargaining model demonstrates that conflicting interests are not a sufficient condition for war, too often the model has been mistakenly interpreted to imply that interests are unimportant. As I show in Chapter 2 of the dissertation, the more intensely interests conflict, the less severe information asymmetries and changes in the distribution of power need to be for misrepresentation and commitment 2 problems to lead to war. Unfortunately, why countries disagree, how groups in each country might differ on the issue in contention, and how domestic institutions aggregate those preferences are left unexamined in many applications of bargaining theory. Understanding how disputes arise and the intensity of preferences over issues provides a more complete understanding of why wars occur. There is, of course, a large literature on domestic interests and war that attempts to explain the origins of interstate disputes. Unfortunately, this literature has separated itself into competing schools and produced few consensus findings. One school emphasizes conflicting social identities, especially religious and ethnic ones. In the most famous articulation of this perspective, Samuel Huntington (1993) predicts that conflict between states with different religious traditions would predominate after the Cold War. Though scholars have rejected Huntington's claims on both theoretical and empirical grounds, research continues to investigate the role of social identities in interstate war. A second school, by contrast, argues that the incentives facing bureaucrats and politicians are more important in understanding interstate conflict. For example, diversionary theories of war hold that leaders have an interest in starting war if it distracts the public from economic or political problems. The theoretical and empirical status of diversionary theory is unclear, however, with a large number of distinguished proponents (e.g. Downs and Rocke 1994, Fordham 1998, Blomberg and Hess 2002) and an equal number of distinguished critics (e.g. Smith 1998, Chiozza and Goemans 2003, Tarar 2006). A third tradition of scholarship contends that economic motivations drive domestic interests in interstate conflict. The most prominent claim from this tradition is that commercial interests promote peace (e.g. Doyle 1983, Russet and Oneal 2001). Others, however, argue that economic actors sometimes have expansionist interests and can form influential coalitions supporting aggressive foreign policy (e.g. Lenin 1917, Snyder 1991). Recently, Brooks (2005) and McDonald (2009) have offered interesting synthesis of these competing views of economic interests. McDonald argues that trade only promotes peace if trading interests are sufficiently influential. Brooks, by contrast, argues that the globalization of production, rather than trade, promotes peace. (Nonetheless, the status of claims about the relationship between interdependence or other economic variables and conflict is unsettled. I do not try settle the competition between these schools, as I believe there are multiple pathways through which domestic politics can affect interstate conflict. In addition, I see little value added in providing another analysis of conventional conflict data that suggests that domestic politics matter—since surely they do. Instead, what is needed is a closer examination of the internal mechanisms of these theoretical traditions. My dissertation contributes to the political economy tradition by providing theoretically and empirically rigorous answers to four foundational questions: What, exactly, are the economic consequences of war? How are they distributed across the economy? What are individuals' economic interests in war? And, are those interests, in fact, important enough to influence their preferences over the use of force abroad? I answer these questions by showing that war has sharply divergent consequences across sectors, which produce economically based coalitions of support and opposition to war. I derive my key claims using well-established models of interests and strategic interaction. I test them with methodologically sound research designs that employ precise measurements of key concepts. Broadly speaking, my theory and evidence support a more contingent view of the role of commercial interests in conflict, though my approach can better explain how and why economic interests would sometimes promote belligerent state behavior. Chapter Summaries Chapter 1 introduces the key question of the dissertation, reviews the existing literature, and highlights my contributions. Chapter 2 extends the bargaining model of war to illustrate how and why economic