Only Here to Help? Bargaining and the Perverse Incentives of International Institutions

Many international organizations reduce the costs states incur from conflict. Critics argue that the expectation of such aid, by mitigating potential suffering, perversely incentivizes states to initiate conflict more often. I develop a model that formalizes this intuition. It shows that institutions may still ameliorate suffering in two ways. First, they may absorb so many of the expected costs that they compensate for the fact that conflicts occur more often. Second, aid can have a second-order effect of reducing uncertainty about the costs of conflict; to the extent that this uncertainty explains why parties cannot negotiate a cooperative alternative, aid might actually reduce the incentive to initiate conflict. Whether aid ultimately helps or hurts therefore depends on how it interacts with the informational challenges states face.