A theory of war finance

This paper analyses the financial and war‐spending policies of a state that faces a conflict in which defeat would result in the loss of sovereign power and in which the material consequences, conditional on avoiding defeat, are stochastic. The analysis takes explicit account of the historical experiences of lenders, who face debt repudiation if the state to whom they have lent is defeated and who also face partial default if the material consequences of the war are unfavorable for the debtor state, even if it avoids defeat. In this analysis, the state uses war debt to smooth expected consumption intertemporally in response to temporary war spending, and the state also uses contingent debt servicing to insure realized consumption against the risk associated with the material consequences of the war. An important innovation in the analysis is to treat the equilibrium amount of war spending, the state's resulting probability of avoiding defeat, as well as the equilibrium amount of borrowing as a set of endogenous variables to be determined simultaneously.     

THE AUSTRALIA GROUP

The Australia Group's (AG's) contributions toward stemming global proliferation of chemical and biological weapons of mass destruction over the last 20 years are noted, in addition to the group's complementary role in effectively supporting the purpose and objectives of the Chemical Weapons Convention (CWC). This report also outlines the organizational and operational means that help accomplish the AG mission and notes the U.S. Congress’ recognition of the role of the AG in countering chemical and biological weapons proliferation. Addressing criticism by some CWC states parties that question the AG's role in nonproliferation, the author also highlights the AG's expanded reach since September 2001 over terrorist activity. Finally,the article identifies a challenge the AG now faces in furthering its objectives and offers a possible solution.     

Power-Sharing in Civil War: Puzzles of Peacemaking and Peacebuilding

Syria's slide into sectarian civil war in 2011 raises a new fundamental knowledge question about the conditions under which power-sharing pacts can be clinched as an approach to war termination. When intrastate conflicts escalate into violent sectarian struggles, power-sharing is a likely basis of an eventual political settlement in situations where partition is off the table. This article contends that there remain two puzzling knowledge gaps about power-sharing as the basis for peace agreements to end civil wars: first, the specific conditions under which elites find it in their own interest to share power with bitter adversaries rather than fight on the battlefield, and second, how war-ending elite-negotiated pacts may evolve into more enduring social contracts. These puzzles, critical for policymakers and still unresolved in the scholarly literature, suggest the need to develop more contingent- and context-specific knowledge if research findings are to more capably contribute to peacemaking efforts.