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Annexation or Conquest? The Economics of Empire Building

  • Herschel I. Grossman
  • Juan Mendoza

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.

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File URL: http://www.nber.org/papers/w8109.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8109.

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Date of creation: Feb 2001
Date of revision:
Handle: RePEc:nbr:nberwo:8109
Note: EFG
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  1. Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1275-88, December.
  2. Gershenson, Dmitriy, 2002. "Sanctions and Civil Conflict," Economica, London School of Economics and Political Science, vol. 69(274), pages 185-206, May.
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