Rational Defence: War and Peace in South Asia

Richard Barrett and Somnath Sen

Discussion Papers from Department of Economics, University of Birmingham

Abstract: The paper provides a theory of war and conflict issues, and applies the theory to the arms race and the possibility of war in the South Asian subcontinent. We try to give a new perspective on an old question: wars are not rational since they destroy the contestable resource over which disputes arise; yet, states which are rational frequently undertake them rather than going for the less costly option of settlement. In the paper a war game is played in which two states first build armaments and then, if they cannot achieve a settlement, fight a war, the outcome of which depends on strength of armaments, where at stake is a contestable resource. The anticipated outcome determines the bargaining threat point. ‘Technology’ is a factor in any war, and so too is the cost of building armaments. States typically differ in technology and may also miscalculate their own relative technical position and war-fighting capability. Alternative models of settlement and war are presented in which states either believe the opposing state has the same perception of technical advantage, or else know the opposing state’s differing perception. Dynamic models, which include the effects of decay in information over time and strategic concerns, are examined. Finally, the results of the models are applied to the stylised facts of India-Pakistan rivalry and conflict, paying particular attention to institutional issues. It is demonstrated that the stylised facts of the Indo-Pakistani conflict and wars fit well with the theoretical conjectures of the analytical models.

Keywords: National security; economics of war; arms race; international conflicts; strategic behaviour; political economy; South Asia (search for similar items in EconPapers)
JEL-codes: F51 F52 F59 H56 H57 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2009-09
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