General Equilibrium in the Two-Good Theory of Foreign Policy

• In Event: Poster Session: International Security Theory and Concepts

Abstract

The two-good theory of foreign policy seeks to explain why countries become more or less maintenance or change seeking in their foreign policies. One of the theory's predictions is that as countries become more powerful, they will become more change seeking (revisionist) relative to maintenance seeking (status quo preserving). This expectation is predicated on the assumption that greater power confers a comparative advantage in promoting change in the international system. In this paper, I propose a more complicated relationship between power and foreign policy by endogenizing the foreign policy choices of countries. Using a simple game theoretic model extension of the two-good model, I show that, in equilibrium, change seeking in foreign policy is not always positively correlated with power. I find that the key moderating factor is a country's own level of dissatisfaction with the status quo. When a country is dissatisfied, the prediction made by the two-good theory of foreign policy obtains (more power leads to more change-seeking foreign policy). However, when a country is more satisfied, power and change-seeking have an inverse relationship (more power leads to more maintenance-seeking foreign policy). An empirical analysis of patterns in international conflict initiation and reciprocation from 1816 to 2012 is consistent with the endogenous two-good model's predictions.

Author

• Miles D. Williams, Denison University