The Investment Theory of Wars : Belligerent Dictators in the North/McGuire-Model of Autocracy

Department of Economics, University of Duisburg, Lotharstrasse 65, 47048 Duisburg
Wilke, Thomas

In the early 90s Mancur Olson Jr. and Martin C. McGuire developed an economic explanation of autocracy. The differentiation between roving and stationary bandits is the core of their theory. The authors claim that an "invisible hand" leads to a conversion of roving bandits into stationary bandits. In this respect, stationary bandits are "public goods providing kings" who reign peacefully. Thus, war is hardly a rational political option. However, this result stands in contradiction to the overwhelming evidence for wars in human history. Therefore, war as a political option is introduced. It is shown that the Olson/McGuire results prove to be valid only under certain circumstances.



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