An Economic Theory of Foreign Interventions and Regime Change
I 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.
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- Davide Ticchi & Andrea Vindigni, 2007.
"War and Endogenous Democracy,"
0715, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2007.
- Ticchi, Davide & Vindigni, Andrea, 2008. "War and Endogenous Democracy," IZA Discussion Papers 3397, Institute for the Study of Labor (IZA).
- Ticchi, Davide & Vindigni, Andrea, 2007. "War and endogenous democracy," POLIS Working Papers 97, Institute of Public Policy and Public Choice - POLIS.
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- Kreps, David M & Wilson, Robert, 1982.
Econometric Society, vol. 50(4), pages 863-94, July.
- 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.
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"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.
- Berger, Daniel & Easterly, William & Nunn, Nathan & Satyanath, Shanker, 2013. "Commercial Imperialism? Political Influence and Trade during the Cold War," Scholarly Articles 11986334, Harvard University Department of Economics.
- Arindrajit Dube & Ethan Kaplan & Suresh Naidu, 2011.
"Coups, Corporations, and Classified Information,"
NBER Working Papers
16952, National Bureau of Economic Research, Inc.
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