Economic Origins of Border Fortifications

Afiq bin Oslan

Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: Why do contemporary states fortify their borders? Modern military advancements have made such fortifications obsolete for security, yet scholars have offered no satisfactory alternative theory. I propose a theory of fortifications with economic motivations using a game-theoretic model where states compete to extract wealth over a shared population around a border. Such competition generates inefficiency and states have the option to construct fortifications to disrupt competition. Fortifications contain the wealth of citizens inside the state to be taxed and enforce efficient monopolies of extraction. States hence fortify when such profits outweigh short-term expenses. The models suggest that we should expect fortifications between territories of unequal economic capacities as richer states have more to lose from inefficient competition, complementing existing empirical results.

Pages: 42
Date: 2023-12
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