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The Purse Strings of Peace


  • I thank David Bearce, Paul Fritz, Tim Frye, George Gavrilis, Avery Goldstein,Yoav Gortzak, Yoram Haftel, Ed Mansfield, John Mueller, Jon Pevehouse, David Rousseau, David Rowe, Kevin Sweeney, Harrison Wagner, and three anonymous reviewers at AJPS for their helpful comments on this and previous versions of the manuscript. Thank you to the Christopher H. Browne Center for International Politics at the University of Pennsylvania and The University of Texas at Austin for financial support of this research. Any remaining errors are my own.

Patrick J. McDonald is assistant professor of government, The University of Texas at Austin, 1 University Station, A1800, Austin, TX 78712 (


This article examines how commerce promotes peace between states. It diverges from the commercial peace literature and its predominant focus on international trade by looking inside the domestic economy to see how its structure influences conflict. Drawing on selectorate theory, I argue that substantial quantities of public property generate fiscal autonomy for governments, strengthen their hold on the domestic reigns of power, and create opportunities to pursue more aggressive foreign policies. A series of statistical tests shows that greater quantities of publicly held assets increase the likelihood that a state will participate in military conflict. Given that the predominance of privately held property is one of the defining institutions of capitalism, these results support the claim that capitalism promotes peace.