Inducing Deterrence through Moral Hazard in Alliance Contracts

Bibliographic Data

ID6284775
AuthorsBrett V Benson (Vanderbilt University), Adam Meirowitz (0000-0003-4671-8889, Princeton University), Kristopher W Ramsay (Princeton University), Kristopher Ramsay (0000-0002-3446-1820, Princeton University)
Year2014
Volume58
Issue2
Pages307-335
Publication date2014-03-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueJournal of Conflict Resolution (JOURNAL)
Journal identifiersISSN: 0022-0027 • E-ISSN: 1552-8766
PublisherSAGE Publications Inc (PUBLISHER)
DOI10.1177/0022002712467936
OpenAlexW2125393960
LanguageEN
Citations received39
References cited34

Do military alliances foster aggressive behavior in allies to the point of undermining the security goal of the alliance? Like others, we find that alliance commitments may cause moral hazard because allies do not fully internalize the costs of actions that can lead to war. But unlike others, we show that the effect of moral hazard can improve security. Moral hazard can be the driving force behind generating deterrence and avoiding costly conflict. Aggressors may refrain from initiating crises if their target enjoys additional resources from its ally and so is more willing to fight back. So rather than incurring costs, moral hazard may be the very key to deterring potential aggressors and minimizing the risk of conflict. This behavior allows alliance partners to capture a “deterrence surplus,” which are the gains from avoiding conflict

Alliance · Business · Deterrence theory · Economics · Hazard · Incentive · Law and economics · Microeconomics · Moral hazard · Opportunity cost · Political science · Corruption and Economic Development · Defense, Military, and Policy Studies · Law · Political Conflict and Governance

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