No resources mean no war

In this analysis, we focus on using economic conditions to understand when rivalries are likely to escalate or end. Rivalries are an appropriate set of cases to use when examining substitutability both because leaders in rival states have clearly substitutable choices and because rivalries are a set of cases in which externalization is a particularly plausible policy option.7 In particular, when confronted with domestic problems, leaders in a rivalry have the clear alternatives of escalating the conflict with the rival to divert attention or to work to settle the rivalry as a means of freeing up a substantial amount of resources that can be directed toward solving internal problems. In the case of the diversion option, rivals provide logical, believable actors for leaders to target; the presence of a clear rival may offer unstable elites a particularly inviting target for hostile statements or actual conflict as necessary. The public and relevant elites already consider the rival a threat or else the rivalry would not have continued for an extended period; the presence of disputed issues also provides a casus belli with the rival that is always present. Rivals also may provide a target where the possible costs and risks of externalization are relatively controlled. If the goal is diversion, leaders willwant to divert attention without provoking an actual (and expensive)war. Over the course of many confrontations, rival states may learn to anticipate response patterns, leading to safer disputes or at least to leaders believing that they can control the risks of conflict when they initiate a new confrontation. In sum, rivals provide good targets for domestically challenged political leaders. This leads to our first hypothesis, which is as follows: Hypothesis 1: Poor economic conditions lead to diversionary actions against the rival. Conflict settlement is also a distinct route to dealing with internal problems that leaders in rivalries may pursue when faced with internal problems. Military competition between states requires large amounts of resources, and rivals require even more attention. Leaders may choose to negotiate a settlement that ends a rivalry to free up important resources that may be reallocated to the domestic economy. In a “guns versus butter” world of economic trade-offs, when a state can no longer afford to pay the expenses associated with competition in a rivalry, it is quite rational for leaders to reduce costs by ending a rivalry. This gain (a peace dividend) could be achieved at any time by ending a rivalry. However, such a gain is likely to be most important and attractive to leaders when internal conditions are bad and the leader is seeking ways to alleviate active problems. Support for policy change away from continued rivalry is more likely to develop when the economic situation sours and elites and masses are looking for ways to improve a worsening situation. It is at these times that the pressure to cut military investment will be greatest and that state leaders will be forced to recognize the difficulty of continuing to pay for a rivalry. Among other things, this argument also encompasses the view that the cold war ended because the Union of Soviet Socialist Republics could no longer compete economically with the United States. Hypothesis 2: Poor economic conditions increase the probability of rivalry termination. Hypotheses 1 and 2 posit opposite behaviors in response to a single cause (internal economic problems). As such, they demand a research design that can account for substitutability between them.