Author: Ron Smith, Martin Sola, Fabio Spagnolo
Publisher/Publication: Journal of Peace Research
Volume/Issue: 37 (6)
DOI/ISBN: 10.1177/0022343300037006005
Abstract: The authors in this paper analyse the military spending of Greece and Turkey as a repeated game. They argue that previous studies have failed to find a clear relationship between arm races and war because they did not account for the different strategies that the countries may adopt. They model the arms race as a prisoner’s dilemma game, where each country can choose a high or low share of military expenditure and estimate the transition probabilities between the four possible states of the game using a regime-switching model. They evaluate and reject the hypothesis that the countries play a tit-for-tat strategy, where they mimic each other’s behaviour. They also evaluate and accept the hypothesis that each country plays a constant strategy, where they have their own probabilities of switching between high and low, regardless of what the other country does. They eventually conclude that the arms race is not driven by action-reaction dynamics, but by bureaucratic and political inertia. Part of the econometric school of study of the post-1945 Greek-Turkish military expenditure and possible arms racing.