UC San Diego

Do a nation's commercial interests promote peace? Do those that stand to profit from war support aggressive state behavior? Or, do heterogeneous economic actors share similar preferences over the use of force? This dissertation reexamines these classic issues with rigorous theory, modern methods, and innovative data. In particular, each chapter of the dissertation uses an initiation of military action by the U.S. government to evaluate key links in the causal chain connecting individual economic interests with state behavior. I show that, in the U.S.- Iraq Wars of 1991 and 2003, war had strong distributional consequences that varied by economic sector, that these consequences affected individual preferences, and that the economic interests of constituents influenced congressional voting--through the activity of political organizations. In order to explain how and why actors from the same country have different economic interests in interstate disputes, I weave together international trade theory, an asset theory of individual interests, and the bargaining model of war. That is, I use insights from trade theory to explain why wars typically affect sectors differently, asset theory to explain why sectoral outcomes are translated to individuals; and the bargaining model to show that economic interests matter for individuals and politicians even if they may face strategic incentives to misrepresent their resolve. Each of my key claims is supported by careful empirical analysis. I conduct event studies of the 1991 Gulf War and the Iraq War of 2003 using stock market data to provide detailed information about how the consequences of war differ across sectors. In addition, I show that the results of my event studies are also politically relevant. Specifically, the sector- level variation in the costs and benefits of war that I identify helps explain public support for the war with Iraq in 2003. And, campaign contributions from political action committees representing "winning" and "losing" sectors, classified by the event study--predict congressional votes authorizing the use of force in 1991. Taken together, the results demonstrate that economic interests matter in the formulation of security policy preferences in at least two major U.S. wars, and, I argue, others as well