A Survey of Peace Economics
Peace economics can be defined as the use of economics to understand the causes and effects of violent conflict in the international system and the ways that conflict can be avoided, managed, or resolved. This chapter surveys major subject areas of peace economics, highlighting seminal as well as current contributions. Particularly noteworthy among the newer developments is how major datasets like the Correlates of War Project have fostered a rapid growth of econometric studies based on relatively large cross-country panels. The topics surveyed include: the relation of peace economics to both defense economics and peace studies; data sources and trends for interstate, intrastate, and extra-state conflict; the costs of conflict; the conflict life cycle; the determinants of interstate armed conflict, with emphasis on the role of territory, economic development, and economic interdependence; arms rivalry, proliferation, and arms control, with particular attention given to the foundational models of Richardson and Intriligator and Brito; the technological and geographic dimensions of conflict, including their connections with Schelling's inherent propensity toward war or peace, various Lanchester war models, and the offense-defense balance; appropriation and exchange theory, wherein appropriation undermines the security of exchange at the same time that exchange shapes the incentives for appropriation; experiments in peace economics, most notably the path-breaking prisoner's dilemma experiments of the 1950s; and future directions in the field.
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