Alliance Institutionalization and Conflict Initiation: Moral Hazard and the Dynamics of Militarized Disputes

This paper investigates the moral hazard theory of inter-state alliance commitments and examines how alliance institutionalization may influence the initiation of militarized interstate disputes (MIDs). Drawing on Snyder’s alliance security dilemma, this paper examines whether highly institutionalized alliances embolden states to initiate conflicts or constrain them through greater transparency and coordination. Moreover, this paper investigates whether alliance institutionalization has a conditional effect on conflict initiation based on a state’s regime type. While institutionalization is theorized to signal the strength of an alliance commitment, its impact on conflict may differ for democracies and non-democracies. Democracies, with their higher reputational concerns, are hypothesized to be less aggressive under institutionalized alliances compared to autocracies. The analysis employs fixed-effects regression and coarsened exact matching on state-year data from 1946–2014, incorporating variables on alliance design, regime type, and conflict behavior. Coarsened exact matching was utilized to improve the covariate balance between states with highly institutionalized alliances and those without, to reduce potential endogeneity. Overall, this paper aims to contribute to the study of alliance politics by testing the conditions under which alliance design affects conflict behavior and global stability.