Dispute Resolution Institutions and Strategic Militarization

Existant studies of conflict, negotiation and international relations do not take into account that the institutions used to resolve disputes shape the incentives for entering disputes in the first place. Because engagement in a costly and destructive war is the 'punishment' for entering a dispute, institutions that reduce the chances that a dispute lead to open conflict may make more disputes emerge and incentivize militarization. We provide a simple model in which the support for unmediated peace talks, while effective in improving the chance of peace for a given distribution of military strength, ultimately leads to the emergence of more disputes and to higher conflict outbreak. Happily, we find that not all conflict resolution institutions suffer from these, apparently paradoxical, but actually quite intuitive drawbacks. We identify a form of third-party intervention inspired by the celebrated work by Myerson, and show that it can broker peace in emerged disputes effectively and also avoid perverse militarization incentives.