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Annexation or Conquest? The Economics of Empire Building

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  • Herschel I. Grossman
  • Juan Mendoza

Abstract

This paper develops an economic theory of empire building. This theory addresses the choice among three strategies that empire builders historically have used. We call these strategies Uncoerced Annexation, Coerced Annexation, and Attempted Conquest. The theory shows how the choice among these strategies depends on such factors as the economic gains from imperial expansion, the relative effectiveness of imperial armies, the costs of projecting imperial military power, and liquidity constraints on financing imperial armies. This theory also addresses the scope of imperial ambitions. The paper uses examples from the history of the Roman, Mongol, Ottoman, and Nazi German empires to illustrate the applicability of the theory.

Suggested Citation

  • Herschel I. Grossman & Juan Mendoza, 2001. "Annexation or Conquest? The Economics of Empire Building," NBER Working Papers 8109, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:8109
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    Cited by:

    1. Pietri, Antoine & Tazdaït, Tarik & Vahabi, Mehrdad, 2013. "Empire-building and Price Competition," MPRA Paper 63486, University Library of Munich, Germany, revised Sep 2014.
    2. Adamson, Jordan, 2020. "Political institutions, resources, and war: Theory and evidence from ancient Rome," Explorations in Economic History, Elsevier, vol. 76(C).
    3. Martin C. McGuire, 2010. "Economic Analysis and International Security," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 6(2), pages 313-346, March.
    4. Martin Mcguire, 2002. "Property distribution and configurations of sovereign states: A rational economic model," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(4), pages 251-270.
    5. Herschel I. Grossman, 2013. "Choosing Between Peace and War," Annals of Economics and Finance, Society for AEF, vol. 14(2), pages 765-783, November.
    6. Yuri Yegorov & Dieter Grass & Magda Mirescu & Gustav Feichtinger & Franz Wirl, 2020. "Growth and Collapse of Empires: A Dynamic Optimization Model," Journal of Optimization Theory and Applications, Springer, vol. 186(2), pages 620-643, August.
    7. Libman, Alexander Mikhailovich, 2009. "Эндогенные Границы И Распределение Власти В Федерациях И Международных Сообществах [ENDOGENOUS BOUNDARIES AND DISTRIBUTION OF POWER In the Federation]," MPRA Paper 16473, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F02 - International Economics - - General - - - International Economic Order and Integration

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