Governance and Norms as Determinants of Arming

In this paper, we explore two factors that can limit arming and, more generally, the costs of enforcement within and across states: governance or the formal organizations and institutions that help define and enforce property rights, and norms, or the informal arrangements in settling potential disputes. We examine the effects of these two factors in a simple static contest model, in which two sides choose levels of arming and whether to engage in actual conflict or settle in the shadow of conflict. We show how arming critically depends on both governance and norms, and therefore how societies with potentially conflictual relations can make either high or low levels of expenditures on security without any difference in the levels of security they actually enjoy. We also explore how investments in governance can reduce arming.