We develop a dynamic theory of resource wars and study the conditions under which such wars can be prevented. The interaction between the scarcity of resources and the incentives for war in the presence of limited commitment is at the center of our theory. We show that a key parameter determining the incentives for war is the elasticity of demand. Our first result identifies a novel externality that can precipitate war: price-taking firms fail to internalize the impact of their extraction on military action. In the case of inelastic resource demand, war incentives increase over time and war may become inevitable. Our second result shows that in some situations, regulation of prices and quantities by the resource-rich country can prevent war, and when this is the case, there will also be intertemporal distortions. In particular, resource extraction will tend to be slower than that prescribed by the Hotelling rule, which is the rate of extraction in the competitive environment. Our third result is that, due to limited commitment, such regulation can also precipitate war in some circumstances in which war is avoided in the competitive environment. Trade, International Conflicts, War, Exhaustible Resources. JEL Classifications: F10, F51, H56, Q32.

Abstract: We develop a dynamic theory of resource wars and study the conditions under which such wars can be prevented. The interaction between the scarcity of resources and the incentives for war in the presence of limited commitment is at the center of our theory. We show that a key parameter determining the incentives for war is the elasticity of demand. Our first result identifies a novel externality that can precipitate war: price-taking firms fail to internalize the impact of their extraction on military action. In the case of inelastic resource demand, war incentives increase over time and war may become inevitable. Our second result shows that in some situations, regulation of prices and quantities by the resource-rich country can prevent war, and when this is the case, there will also be intertemporal distortions. In particular, resource extraction will tend to be slower than that prescribed by the Hotelling rule, which is the rate of extraction in the competitive environment. Our third result is that, due to limited commitment, such regulation can also precipitate war in some circumstances in which war is avoided in the competitive environment

This sobering look at the future of warfare predicts that conflicts will now be fought over diminishing supplies of our most precious natural resources. From the barren oilfields of Central Asia to the lush Nile delta, from the busy shipping lanes of the South China Sea to the uranium mines and diamond fields of sub-Saharan Africa, Resource Wars looks at the growing impact of resource scarcity on the military policies of nations. International security expert Michael T. Klare argues that in the early decades of the new millennium wars will be fought not over ideology but over resources, as states battle to control dwindling supplies of precious natural commodities. The political divisions of the Cold War, Klare asserts, are giving way to an immense global scramble for essential materials, such as oil, timber, minerals, and water. And as armies throughout the world define resource security as their primary mission, widespread instability is bound to follow, especially in those places where resource competition overlaps with long-standing disputes over territorial rights. A much-needed assessment of a changed world, Resource Wars is a compelling look at the future of warfare in an era of heightened environmental stress and accelerated economic competition.

The book aims to provide the reader with a state-of-the-art introduction to classic and modern military theory. The text accounts for the most important theories within the field by developing and analyzing these theories, as well as problematizing both their normative and explanatory aims. While focusing on military theory, the book does not only reflect a single way of relating to knowledge of war and warfare, but furthers learning by introducing contrasting perspectives as well as constantly criticizing the theories. There is a clear need for an introductory text for the entire field of military theory that focuses whole-heartedly on the theories – not on their context or how they are expressed in practice during war. This book covers such questions as how we should understand the changing character of war, the utility of force and how the pursuit of political ends is achieved through military means. It draws upon and illustrates military thought through a wide-ranging number of examples from the Napoleonic Wars to the current war in Afghanistan. This book will be of great interest for students of military theory, strategic studies, security studies and defence studies.

This paper develops a dynamic theory of war and peace. In our framework, an aggressive country can forcibly extract concessions from a non-aggressive country via war. Alternatively, it can avoid war and allow the non-aggressive country to make concessions on its own. Both countries suffer from limited commitment, and under peace, the non-aggressive country may receive a private shock which deems concessions too costly. We show that the realization of war sustains concessions along the equilibrium path. In the efficient sequential equilibrium, the aggressive country punishes failed concessions by requesting larger and larger concessions, and their failure eventually leads to a war which can be temporary. After a temporary war, the aggressive country forgives the non-aggressive country by re-engaging in peace because of the coarseness of public information. In the long run, temporary wars can be sustained only if countries are patient, if the cost of war is large, and if the cost of concessions is low. Otherwise, the aggressive country cannot continue to forgive the non-aggressive country, and countries converge to total war (permanent war).