Why Armed Conflicts are More (and Longer) Than Optimal
How public choice economics explains why conflicts start too easily and persist too long.
Thank you for supporting Economic Order! As a paid subscriber, you're getting this post 48 hours before it becomes open access.
The recent armed conflict with Iran has generated predictable reactions. Hawks argue for decisive military action. Doves call for restraint and diplomacy. And, of course, others fall somewhere in between.
But step back from this particular case and notice a pattern: armed conflicts seem to start more easily than they should and persist far longer than makes sense. Iraq was supposed to be quick and decisive. It lasted nearly a decade and cost over $2 trillion. Afghanistan was framed as limited counter-terrorism. It became a 20-year nation-building project costing another $2 trillion. The Russian invasion of Ukraine started more than four years ago.
Rather than debate the merits of this particular conflict, this post is about why political incentives systematically push us toward more armed conflicts and longer engagements than economic efficiency would recommend. Once you see the incentive structure, what looks like repeated “unreasonable” decisions starts to look quite rational from the perspective of decision-makers, even if not from society as a whole.
The Public Choice Problem
Public choice theory’s core insight applies as clearly to military intervention as to agricultural subsidies: benefits concentrate while costs disperse.
Benefits concentrate in specific places. Defense contractors receive billions in contracts. Congressional districts with military production gain thousands of jobs. Politicians demonstrate “strength” and national pride to their base. Military leaders gain budget justification. Media outlets get ratings-driving content.
Costs disperse across everyone. A $2 billion military operation costs the average taxpayer roughly $6. The price of a caffe latte. Future debt spreads invisibly across the population. Opportunity costs remain abstract. No single person has a strong incentive to oppose.
Economists Christopher Coyne and Abigail Hall have extensively documented this dynamic. As Hall notes: defense contractors have billions of reasons to encourage intervention; taxpayers have $6 reasons to oppose. Guess which interest prevails.
This isn’t conspiracy. It’s Economics 101. When benefits concentrate, and costs disperse, we predictably get too much of the activity. Coyne and Hall show this plays out whether we’re talking about sugar subsidies or cruise missiles.
The time-horizon mismatch intensifies the problem. Politicians face electoral cycles; wars span decades. Approval ratings spike when military action begins. But costs, budget deficits, veteran care, and forgone infrastructure materialize years or decades later, often under different leadership.
As Coyne documents in After War, political pressures favor announcing nation-building initiatives that show immediate “progress.” But successful reconstruction requires decades of sustained commitment. By the time initiatives predictably fail, original decision-makers have left office. The result: systematically optimistic promises, predictable disappointment.
Information asymmetry compounds these problems. Governments possess better information about capabilities and intelligence. Yet Coyne and Hall emphasize the “knowledge problem.” Political incentives reward confident predictions over honest uncertainty.
The pattern repeats: Iraq would cost $1.7 billion, officials testified (actual: $2 trillion). Afghanistan would be 'months, not years’ (actual: 20 years). Projections are simultaneously too optimistic and genuinely uncertain because the knowledge to forecast accurately doesn't exist.
Why This Means More Than Optimal
Modern media amplifies benefits. Cable news and social media reward dramatic action, punish perceived weakness. “Restraint” generates no headlines. “Decisive action” goes viral. Political rewards for intervention increase while costs decrease.
Deficit financing hides costs. Wars are funded entirely through borrowing. No tax increases, no war bonds, no direct fiscal pain. When World War II required war taxes, citizens felt the connection between conflict and personal sacrifice. Now costs are pushed to future generations, making already-dispersed costs even more abstract.
Institutional stickiness prevents reversal. Coyne and Hall document how interventionist policies become remarkably difficult to reverse. Agencies created for intervention develop interests in continuation—the Department of Homeland Security now employs 240,000 people with a $60 billion budget. Initial commitments create infrastructure, making continued engagement easier than withdrawal. Politicians advocating withdrawal face “weak on defense” attacks. The political system penalizes reversal more than continuation.
Making Sense of “Unreasonable” Conflicts
Behavior that looks “unreasonable” from a social welfare perspective makes perfect sense from individual decision-makers’ perspective.
Understanding these incentives doesn’t require attributing malicious motives. Defense contractors maximize profit, as any firm does. Politicians maximize electoral success; this is how democracy works. Military leaders seek organizational resources; this is standard bureaucratic behavior.
The problem isn’t the people, it’s institutional structures channeling ordinary self-interest toward excessive intervention.
When you observe conflicts starting on thin justification, continuing past the point where costs exceed benefits, optimistic projections proving wildly wrong, and escalating commitments to failing strategies, don’t assume stupidity or bloodlust. Recognize rational responses to incentives: short electoral time horizons, political rewards for “strength,” concentrated supporting coalitions, dispersed opposition, information advantages enabling optimistic framing, and commitment dynamics making reversal costly.
Conclusion
When you combine concentrated benefits, dispersed costs, knowledge problems, information asymmetries, institutional stickiness, and misaligned time horizons, you get exactly what we observe: more conflicts starting more easily, persisting longer, and costing more than honest cost-benefit analysis would justify.
This isn’t pessimism or cynicism. It’s institutional analysis. Public choice economics teaches that when decision-makers’ incentives diverge from social welfare, we get too much of what they’re deciding. In this case: armed conflict.
Understanding this doesn’t tell you whether any specific action is justified. Reasonable people can disagree about particular threats and responses. But it does tell you to expect, systematically, more conflict than optimal. And to approach official justifications with informed skepticism.
This post was written with the assistance of Claude (Anthropic).
