Rich Neighbors

Theories of economic development suggest variously that national income increases or decreases the propensity for states to fight, while systematic evidence of the impact of development on warfare is ambiguous or non-existent. The lack of empirical support for nominally opposing claims can be reconciled if elements of both sets of arguments are partially correct. We use a formal model to construct an explanation linking economic development and conflict that resolves contradictory theories and absent evidence. Development increases the ability of states to project power while decreasing the impetus to seize territory and related resources through force. High income states fight more often over disputed policies, but less often over tangible assets. We show that “rich neighbors” are much less likely to engage in militarized disputes. ∗We thank Paul Diehl, Tanisha Fazal, Marie Henahan, Douglas Lemke, Russell Leng, Peter Liberman, James Morrow, Paul Senese, Jaroslav Tir, and John Vasquez for helpful comments. A draft of this paper was presented at the Annual Meetings of the International Studies Association, Montreal, Canada, 17-21 March, 2004. A STATA “do” file replicating all aspects of data construction and analysis is available from the authors upon publication. †University of California, San Diego, Department of Political Science, 9500 Gilman Dr., La Jolla, CA 92093-0521. e-mail: [email protected]. ‡University of Zurich, Department of Economics. e-mail: [email protected].