Conflict, Defense Spending, and the Number of Nations

Enrico Spolaore and Alberto Alesina

Scholarly Articles from Harvard University Department of Economics

Abstract: This paper provides a formal model of endogenous border formation and choice of defense spending in a world with international conflict. We examine both the case of democratic governments and of dictatorships. The model is consistent with three observations. First, breakup of countries should follow a reduction in the likelihood of international conflicts. Second, the number of regional conflicts between smaller countries may increase as a result of the breakup of larger countries. Third, the size of the peace dividend (the reduction in defense spending in a more peaceful world) is limited by the process of country breakup.

Date: 2006
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Published in European Economic Review

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Persistent link: https://EconPapers.repec.org/RePEc:hrv:faseco:4553016

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