Hostname: page-component-848d4c4894-cjp7w Total loading time: 0 Render date: 2024-06-18T19:58:16.435Z Has data issue: false hasContentIssue false

Guns or Money? Defense Co-operation and Bilateral Lending as Coevolving Networks

Published online by Cambridge University Press:  27 June 2018

Brandon J Kinne*
Department of Political Science, University of California, Davis, California, USA
Jonas B. Bunte
School of Economic, Political and Policy Sciences, University of Texas at Dallas, Richardson, TX, USA
*Corresponding author. E-mail:;


How are defense co-operation and economic co-operation related? To answer this question, this article analyzes the coevolution of defense co-operation agreements (DCAs) and government-to-government loans. It argues that governments pursue two distinct sets of interests. At the bilateral level, governments use issue linkages and side payments to encourage spillover from defense co-operation to economic co-operation, and vice versa. That is, governments’ bilateral interests in DCAs and loans are largely complementary. However, at the network level, interests may diverge. Specifically, governments use DCAs to build clubs of like-minded defense collaborators or ‘security communities’, while they use loans to impose asymmetric forms of political authority or ‘hierarchies’. In some contexts, these network-level interests are, like bilateral interests, complementary. For example, defense partners rely on loans to co-ordinate their foreign policies and better respond to security threats, and debtors rely on lending patterns to identify suitable defense partners. In other cases, however, these interests strongly conflict. For example, governments that are highly active in the loan network are especially likely to rely on asymmetric exercises of political authority, which is incompatible with the network-level goal of using DCAs to establish communities of defense collaborators. Similarly, governments that are highly active in the DCA network are, due to their complex multilateral political commitments, less vulnerable to the asymmetric influences that loans enable. To empirically test these claims, the study develops a longitudinal model of multiplex network coevolution. Overall, the results show that while economic and defense co-operation often reinforce one another, they sometimes conflict in unexpected ways.

Copyright © Cambridge University Press 2018

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)


Adler, Emanuel and Barnett, Michael N (1998) Security Communities. New York: Cambridge University Press.CrossRefGoogle Scholar
Alt, James E and Gilligan, Michael (1994) The Political Economy of Trading States: Factor Specificity, Collective Action Problems and Domestic Political Institutions. Journal of Political Philosophy 2, 165192.CrossRefGoogle Scholar
Bearce, David H (2003) Societal Preferences, Partisan Agents, and Monetary Policy Outcomes. International Organization 57, 373410.CrossRefGoogle Scholar
Blau, Peter Michael (1964) Exchange and Power in Social Life. New Brunswick, NJ: Transaction Publishers.Google Scholar
Briceño Ruiz, José (2010) From the South American Free Trade Area to the Union of South American Nations: The Transformations of a Rising Regional Process. Latin American Policy 1, 208229.CrossRefGoogle Scholar
Bueno de Mesquita, Bruce (1975) Measuring Systemic Polarity. Journal of Conflict Resolution 19, 187216.CrossRefGoogle Scholar
Bueno de Mesquita, Bruce and Smith, Alastair (2007) Foreign Aid and Policy Concessions. Journal of Conflict Resolution 51, 251284.CrossRefGoogle Scholar
Bueno de Mesquita, Bruce and Smith, Alastair (2009) A Political Economy of Aid. International Organization 63, 309340.CrossRefGoogle Scholar
Bunte, Jonas B (2018a) Sovereign Lending After Debt Relief. Review of International Political Economy 25, 317339.Google Scholar
Bunte, Jonas B (2018b) Raise the Debt - How Developing Countries Choose their Creditors. Oxford University Press.Google Scholar
Bunte, Jonas B and Kinne, Brandon J (2017) The Politics of Government-to-Government Loans: Interests, Information, and Network Effects. Working paper. Richardson, TX: University of Texas at Dallas.Google Scholar
Bussmann, Margit (2010) Foreign Direct Investment and Militarized International Conflict. Journal of Peace Research 47, 143153.CrossRefGoogle Scholar
Carter, Ashton (2016) The Rebalance and Asia–Pacific Security: Building a Principled Security Network. Foreign Affairs 95, 65.Google Scholar
Carter, Ashton (2017) Department of Defense Accomplishments (2009–2016): Taking the Long View, Investing for the Future. Washington, DC: US Department of Defense.Google Scholar
Chyzh, Olga (2016) Dangerous Liaisons: An Endogenous Model of International Trade and Human Rights. Journal of Peace Research 53, 409423.CrossRefGoogle Scholar
Cohen, Benjamin J (2006) The Macrofoundation of Monetary Power. In International Monetary Power, edited by David M. Andrews, 3150. Ithaca, NY: Cornell University Press.Google Scholar
Cranmer, Skyler J and Desmarais, Bruce A (2011) Inferential Network Analysis with Exponential Random Graph Models. Political Analysis 19, 6686.CrossRefGoogle Scholar
Cranmer, Skyler J and Desmarais, Bruce A (2016) A Critique of Dyadic Design. International Studies Quarterly 60, 355362.CrossRefGoogle Scholar
Davis, Christina L (2004) International Institutions and Issue Linkage: Building Support for Agricultural Trade Liberalization. The American Political Science Review 98, 153169.CrossRefGoogle Scholar
Davis, Christina L (2008) Linkage Diplomacy: Economic and Security Bargaining in the Anglo-Japanese Alliance, 1902-23. International Security 33, 143179.CrossRefGoogle Scholar
Dorussen, Han, Gartzke, Erik A and Westerwinter, Oliver (2016) Networked International Politics. Journal of Peace Research 53, 283291.CrossRefGoogle Scholar
Dorussen, Han and Ward, Hugh (2008) Intergovernmental Organizations and the Kantian Peace. Journal of Conflict Resolution 52, 189212.CrossRefGoogle Scholar
Dorussen, Han and Ward, Hugh (2010) Trade Networks and the Kantian Peace. Journal of Peace Research 47, 2942.CrossRefGoogle Scholar
Fearon, James D (1998) Bargaining, Enforcement, and International Cooperation. International Organization 52, 269305.CrossRefGoogle Scholar
Fordham, Benjamin O (2010) Trade and Asymmetric Alliances. Journal of Peace Research 47, 685696.CrossRefGoogle Scholar
Gowa, Joanne (1995) Allies, Adversaries, and International Trade. Princeton, NJ: Princeton University Press.Google Scholar
Gowa, Joanne and Mansfield, Edward D (1993) Power Politics and International Trade. The American Political Science Review 87, 408420.CrossRefGoogle Scholar
Gowa, Joanne and Mansfield, Edward D (2004) Alliances, Imperfect Markets and Major-Power Trade. International Organization 58, 775805.CrossRefGoogle Scholar
Haim, Dotan A (2016) Alliance Networks and Trade: The Effect of Indirect Political Alliances on Bilateral Trade Flows. Journal of Peace Research 53, 472490.CrossRefGoogle Scholar
Hegre, Havard, Oneal, John R and Russett, Bruce (2010) Trade Does Promote Peace: New Simultaneous Estimates of the Reciprocal Effects of Trade and Conflict. Journal of Peace Research 47, 763774.CrossRefGoogle Scholar
Hirschman, Albert O (1980) National Power and the Structure of Foreign Trade, Vol. 105. Berkeley: University of California Press.Google Scholar
Hufbauer, Gary Clyde, Schott, Jeffrey J and Elliott, Kimberly Ann (1990) Economic Sanctions Reconsidered: History and Current Policy, Vol. 1. Washington, DC: Peterson Institute.Google Scholar
Joerding, Wayne (1986) Economic Growth and Defense Spending: Granger Causality. Journal of Development Economics 21, 3540.CrossRefGoogle Scholar
Kahler, Miles and Kastner, Scott L (2006) Strategic Uses of Economic Interdependence: Engagement Policies on the Korean Peninsula and Across the Taiwan Strait. Journal of Peace Research 43, 523541.CrossRefGoogle Scholar
Katzenstein, Peter J and Okawara, Nobuo (1993) Japan’s National Security: Structures, Norms, and Policies. International Security 17, 84118.CrossRefGoogle Scholar
Keohane, Robert O (1969) Lilliputians’ Dilemmas: Small States in International Politics. International Organization 23, 291310.CrossRefGoogle Scholar
Keshk, Omar M G, Pollins, Brian M and Reuveny, Rafael (2004) Trade Still Follows the Flag: The Primacy of Politics in a Simultaneous Model of Interdependence and Armed Conflict. Journal of Politics 66, 11551179.CrossRefGoogle Scholar
Kim, Hyung M and Rousseau, David L (2005) The Classical Liberals Were Half Right (or Half Wrong): New Tests of the ‘Liberal Peace,’ 1960–88. Journal of Peace Research 42, 523543.CrossRefGoogle Scholar
Kinne, Brandon J (2013) Network Dynamics and the Evolution of International Cooperation. American Political Science Review 107, 766785.CrossRefGoogle Scholar
Kinne, Brandon J (2014) Does Third-Party Trade Reduce Conflict? Credible Signaling Versus Opportunity Costs. Conflict Management and Peace Science 31, 2848.CrossRefGoogle Scholar
Kinne, Brandon J (2016) Agreeing to Arm: Bilateral Weapons Agreements and the Global Arms Trade. Journal of Peace Research 53, 359377.CrossRefGoogle Scholar
Kinne, Brandon J (2017a) The Bilateral Defense Cooperation Agreement Dataset (DCAD). Working paper. Davis: University of California.Google Scholar
Kinne, Brandon J (2017b) Networked Defense: Assessing the Impact of Bilateral Defense Cooperation. Working paper. Davis: University of California.Google Scholar
Kinne, Brandon J (2018) Defense Cooperation Agreements and the Emergence of a Global Security Network. International Organization 72.CrossRefGoogle Scholar
Kinne, Brandon and Bunte, Jonas (2018) Replication data for: Guns or Money? Defense Cooperation and Bilateral Lending as Coevolving Networks, , Harvard Dataverse, V1.CrossRefGoogle Scholar
Kirshner, Jonathan (2007) Appeasing Bankers: Financial Caution on the Road to War. Princeton, NJ: Princeton University Press.Google Scholar
Koremenos, Barbara (2001) Loosening the Ties that Bind: A Learning Model of Agreement Flexibility. International Organization 55, 289325.CrossRefGoogle Scholar
Lake, David A (2009) Hierarchy in International Relations. Ithaca, NY: Cornell University Press.Google Scholar
Lampton, David M (2001) The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000. Palo Alto, CA: Stanford University Press.Google Scholar
Lawson, Marian Leonardo and Epstein, Susan B (2009) Foreign Aid Reform: Agency Coordination. Congressional Research Service. Report no. R40756.Google Scholar
Leeds, Brett Ashley (2005) Alliance Treaty Obligations and Provisions (Atop) Codebook. Houston, TX: Rice University.Google Scholar
Leeds, Brett Ashley, Ritter, Jeffrey M, Mitchell, Sarah M and Long, Andrew G (2002) Alliance Treaty Obligations and Provisions, 1815–1944. International Interactions 28, 237260.CrossRefGoogle Scholar
Levy, Jack S (2003) Economic Interdependence, Opportunity Costs, and Peace. In Economic Interdependence and International Conflict: New Perspectives on an Enduring Debate, edited by Edward Mansfield and Brian Pollins, 127147. Ann Arbor: University of Michigan Press.Google Scholar
Long, Andrew G (2003) Defense Pacts and International Trade. Journal of Peace Research 40, 537552.CrossRefGoogle Scholar
Long, Andrew G and Leeds, Brett Ashley (2006) Trading for Security: Military Alliances and Economic Agreements. Journal of Peace Research 43, 433451.CrossRefGoogle Scholar
Mansfield, Edward D and Bronson, Rachel (1997) Alliances, Preferential Trading Arrangements, and International Trade. American Political Science Review 91, 94107.CrossRefGoogle Scholar
Maoz, Zeev (2010) Networks of Nations: The Evolution, Structure, and Impact of International Networks, 1816-2001. Cambridge, MA: Cambridge University Press.CrossRefGoogle Scholar
McDonald, Patrick J (2004) Peace Through Trade or Free Trade? Journal of Conflict Resolution 48, 547572.CrossRefGoogle Scholar
McDonald, Patrick J (2009) The Invisible Hand of Peace: Capitalism, the War Machine, and International Relations Theory. New York: Cambridge University Press.CrossRefGoogle Scholar
Morrow, James D (1999) How Could Trade Affect Conflict? Journal of Peace Research 36, 481489.CrossRefGoogle Scholar
Morrow, James D, Siverson, Randolph M and Tabares, Tressa (1998) The Political Determinants of International Trade: The Major Powers, 1907–90. American Political Science Review 92, 649661.CrossRefGoogle Scholar
Panetta, Leon (2012) Sustaining US Global Leadership: Priorities for 21st Century Defense. Washington, DC: US Department of Defense.Google Scholar
Papayoanou, Paul A (1999) Power Ties: Economic Interdependence, Balancing, and War. Ann Arbor: University of Michigan Press.CrossRefGoogle Scholar
Poast, Paul (2012) Does Issue Linkage Work? Evidence from European Alliance Negotiations, 1860 to 1945. International Organization 66, 277310.CrossRefGoogle Scholar
Polachek, Solomon and Xiang, Jun (2010) How Opportunity Costs Decrease the Probability of War in an Incomplete Information Game. International Organization 64, 133144.CrossRefGoogle Scholar
Ram, Rati (1995) Defense Expenditure and Economic Growth. Handbook of Defense Economics 1, 251274.CrossRefGoogle Scholar
Rich, Timothy S (2010) Status for Sale: Taiwan and the Competition for Diplomatic Recognition. Issues & Studies 45, 159188.Google Scholar
Ripley, Ruth M, Snijders, Tom A B and Preciado, Paulina (2012) Manual for RSiena, Department of Statistics, Nuffield College, University of Oxford, Available from Scholar
Russett, Bruce M and Oneal, John R (2001) Triangulating Peace: Democracy, Interdependence, and International Organizations. New York: Norton.Google Scholar
Sandler, Todd and Hartley, Keith (2007) Handbook of Defense Economics: Defense in a Globalized World. Amsterdam: Elsevier.Google Scholar
Schneider, G (2013) Peace Through Globalization and Capitalism? Prospects of Two Liberal Propositions. Journal of Peace Research 51, 173183.CrossRefGoogle Scholar
Sebenius, James K (1983) Negotiation Arithmetic: Adding and Subtracting Issues and Parties. International Organization 37, 281316.CrossRefGoogle Scholar
Signorino, Curtis S and Ritter, Jeffrey M (1999) Tau-b or Not Tau-b: Measuring the Similarity of Foreign Policy Positions. International Studies Quarterly 43, 115144.CrossRefGoogle Scholar
Simmons, Beth (2003) Pax Mercatorla and the Theory of the State. In Economic Interdependence and International Conflict: New Perspectives on an Enduring Debate, edited by Edward D. Mansfield and Brian M. Pollins. Ann Arbor: University of Michigan Press.Google Scholar
Skålnes, Lars S (2000) Politics, Markets, and Grand Strategy: Foreign Economic Policies as Strategic Instruments. Ann Arbor: University of Michigan Press.CrossRefGoogle Scholar
Snijders, Tom A B (2005) Models for Longitudinal Network Data. In Models and Methods in Social Network Analysis, edited by Peter J. Carrington, John Scott and Stanley Wasserman, 215247. New York: Cambridge University Press.CrossRefGoogle Scholar
Snijders, Tom A B, Lomi, Alessandro and Torló, Vanina Jasmine (2013) A Model for the Multiplex Dynamics of Two-Mode and One-Mode Networks, With an Application to Employment Preference, Friendship, and Advice. Social Networks 35, 265276.CrossRefGoogle Scholar
Vijayaraghavan, Vikram S, Noél, Pierre-André, Maoz, Zeev and D’Souza, Raissa M (2015) Quantifying Dynamical Spillover in Co-Evolving Multiplex Networks. Scientific Reports 5, article number 15142.CrossRefGoogle Scholar
Wang, T Y (1999) U.S. Foreign Aid and UN Voting: An Analysis of Important Issues. International Studies Quarterly 43, 199210.CrossRefGoogle Scholar
Ward, Hugh (2006) International Linkages and Environmental Sustainability: The Effectiveness of the Regime Network. Journal of Peace Research 43, 149166.CrossRefGoogle Scholar
Ward, Michael D, Ahlquist, John S and Rozenas, A (2013) Gravity’s Rainbow: A Dynamic Latent Space Model for the World Trade Network. Network Science 1, 95118.CrossRefGoogle Scholar
Ward, Michael D, Siverson, Randolph M and Cao, Xun (2007) Disputes, Democracies, and Dependencies: A Reexamination of the Kantian Peace. American Journal of Political Science 51, 583601.CrossRefGoogle Scholar
Warren, T Camber (2010) The Geometry of Security: Modeling Interstate Alliances as Evolving Networks. Journal of Peace Research 47, 697709.CrossRefGoogle Scholar
Warren, T Camber (2016) Modeling the Coevolution of International and Domestic Institutions: Alliances, Democracy, and the Complex Path to Peace. Journal of Peace Research 53, 424441.CrossRefGoogle Scholar
Watts, Duncan J and Strogatz, Steven H (1998) Collective Dynamics of ‘Small-World’ Networks. Nature 393:440442.CrossRefGoogle ScholarPubMed
Winecoff, William Kindred (2015) Structural Power and the Global Financial Crisis: A Network Analytical Approach. Business and Politics 17, 495525.CrossRefGoogle Scholar
Supplementary material: PDF

Kinne and Bunte supplementary material

Online Appendix

Download Kinne and Bunte supplementary material(PDF)
PDF 469.2 KB
Supplementary material: Link

Kinne and Bunte Dataset