An Economic Theory of Foreign Interventions and Regime Change
AbstractI construct a theory of foreign interventions in which the preferences of the foreign country over alternative local groups are determined by each group's international economic ties. In equilibrium, the foreign country supports the group with which it has the strongest ties, since this is most influenceable from the outside. However this is counterweighted by the tendency of the domestic political system to favour the least influenceable group. I allow for a non-economic dimension of policy (geopolitics), and study how the saliency of this dimension may play in favor of the incumbent group. My results help interpret the economic rationale for many Western interventions in developing countries in the 20th century, and the role of economic nationalism in motivating the struggle for regime change. Furthermore, they help explain why the Cold War strengthened the West's preference for specific local groups. I provide detailed historical evidence in favor of my arguments.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3475.
Date of creation: 2011
Date of revision:
regime change; foreign interventions; economic power; economic nationalism; Cold War; Latin America;
Other versions of this item:
- Roberto Bonfatti, 2011. "An Economic Theory of Foreign Interventions and Regime Change," Economics Series Working Papers 549, University of Oxford, Department of Economics.
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- F10 - International Economics - - Trade - - - General
- F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
- N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ticchi, Davide & Vindigni, Andrea, 2008.
"War and Endogenous Democracy,"
IZA Discussion Papers
3397, Institute for the Study of Labor (IZA).
- Davide Ticchi & Andrea Vindigni, 2007. "War and Endogenous Democracy," Working Papers 0715, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2007.
- Ticchi, Davide & Vindigni, Andrea, 2007. "War and endogenous democracy," POLIS Working Papers 97, Institute of Public Policy and Public Choice - POLIS.
- Ticchi, Davide & Vindigni, Andrea, 2007. "War and Endogenous Democracy," Papers 03-10-2008b, Princeton University, Research Program in Political Economy.
- William Easterly & Shanker Satyanath & Daniel Berger, 2008. "Superpower Interventions and their Consequences for Democracy: An Empirical Inquiry," NBER Working Papers 13992, National Bureau of Economic Research, Inc.
- Kreps, David M & Wilson, Robert, 1982.
Econometric Society, vol. 50(4), pages 863-94, July.
- Daniel Berger & William Easterly & Nathan Nunn & Shanker Satyanath, 2010.
"Commercial Imperialism? Political Influence and Trade During the Cold War,"
NBER Working Papers
15981, National Bureau of Economic Research, Inc.
- Daniel Berger & William Easterly & Nathan Nunn & Shanker Satyanath, 2013. "Commercial Imperialism? Political Influence and Trade during the Cold War," American Economic Review, American Economic Association, vol. 103(2), pages 863-96, April.
- Arindrajit Dube & Ethan Kaplan & Suresh Naidu, 2011.
"Coups, Corporations, and Classified Information,"
NBER Working Papers
16952, National Bureau of Economic Research, Inc.
- Alessandro Lizzeri & Nicola Persico, 2004. "Why Did the Elites Extend the Suffrage? Democracy and the Scope of Government, With an Application to Britain's "Age of Reform"," The Quarterly Journal of Economics, MIT Press, vol. 119(2), pages 705-763, May.
- Toke S. Aidt & Facundo Albornoz & Martin Gassebner, 2012.
"The Golden Hello and Political Transitions,"
CESifo Working Paper Series
3957, CESifo Group Munich.
- Aidt, Toke & Albornoz, Facundo & Gassebner, Martin, 2010. "The Golden Halo and Political Transitions," Proceedings of the German Development Economics Conference, Hannover 2010 48, Verein für Socialpolitik, Research Committee Development Economics.
- Toke, A.S. & Albornoz, F. & Gassebner, M., 2012. "The Golden Hello and Political Transitions," Cambridge Working Papers in Economics 1241, Faculty of Economics, University of Cambridge.
- Martin Gassebner & Facundo Albornoz & Toke S. Aidt, 2012. "The Golden Hello and Political Transitions," KOF Working papers 12-316, KOF Swiss Economic Institute, ETH Zurich.
- Toke Aidt & Uk Hwang, 2014. "To Ban or Not to Ban: Foreign Lobbying and Cross National Externalities," Cambridge Working Papers in Economics 1402, Faculty of Economics, University of Cambridge.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).
If references are entirely missing, you can add them using this form.