Caught in the Power-Transition Traps: Inequality, Populism, and Violent Conflict

• In Event: Poster Session: International Security I

Abstract

When do power transitions between a rising power and a declining hegemon end in violent conflict? Do domestic economic inequality and populism play a role in causing the “Thycydides Trap” more contentious between a challenger and a status quo hegemon? This paper answers those questions by developing a theory about under what conditions does a power transition most likely end in war.
In essence, this paper makes a three-stage argument. First, the “Thycydides Trap” alone is not a sufficient condition for violent competition because, as the bargaining theory suggests, both a challenger and a hegemon have a common incentive to strike a bargain without fighting under perfect information. Second, for the Thycydides Trap to end in violent struggle, it must occur concurrently with the “Kindleberger trap” during the phase of power transition. The Kindleberger trap points out that international economic order is most likely to break down when great powers fail to assume the international responsibilities to provide global public goods. The resulting economic chaos and crises are likely to increase misperceptions and to exacerbate commitment problems in the bargaining between a rising power and a declining hegemon. Third, I argue that domestic economic inequality is associated with extreme populism that inevitably leads to the Kindleberger trap. When inequality is high, the redistributive conflict between competing societal coalitions within societies is likely to become more serious. Unable to strike a domestic consensus on international cooperation, the leadership is expected to engage in “beggar-thy neighbor policies,” which increases the likelihood of violent conflicts.
To test my argument, I quantitatively analyze interstate conflicts, power-transition, inequality, and economic crises from 1900-2016. I also conduct three historical case studies: (1) Germany and the UK, France and the US during the Great Depression, (2) the US and Japan and West Germany during the economic crisis of the 1980s; (3) China and Japan from 1970-present. The results support my argument.

Author

• Chia-Chien Chang, UC Santa Barbara