War Politics

In 1995 the most prestigious journal in economics, the American Economic Review, published one of the most controversial papers in its long history, War Politics: An Economic, Rational-Voter Framework (JSTOR). Gregory Hess and Athanasios Orphanides modeled voters as caring about two presidential abilities, the ability to make war and the ability to manage the economy. To get reelected an incumbent President must convince voters that his combined abilities make him better than a challenger.

This simple model has some profound implications. If the economy is doing well, the President is up on one score and without evidence can be assumed to be as good as the challenger in war-making ability. Thus, the President gets reelected. But if the economy is doing badly then an incumbent who cannot present evidence that he is of superior war-making ability will lose for certain. Crucially, an incumbent can’t demonstrate war-making ability without a war – thus when the economy is doing poorly and the President is up for reelection the model predicts more wars.

Hess and Orphanides define a war as “an international crisis in which the United States is involved in direct military activity that results in violence.” Using data from the International Crisis Behavior Project they compare the onset of wars in first terms when there is a recession with the onset of wars in first terms with no recession and second terms. If wars are random these probabilities ought to be the same. Stunningly, however, they find that in the 1953-1988 period wars are about twice as likely in first terms with a recession than in first terms with no recession and second terms (60 percent to 30 percent). The probability of this result occurring by chance is about 5%. Various extensions and modifications produce similar results.

Need I mention that the Hess and Orphanides model has proven to have predictive power?