Ruhr Economic Papers

Ruhr Economic Papers #453

Democratic Peace – A Principal-Agent Approach

by Nadine Leonhardt

University of Duisburg-Essen, 12/2013, 27 S./p., 8 Euro, ISBN 978-3-86788-511-9 DOI: 10.4419/86788511



The present paper explicitly models the principal-agent relationship between a democratic population and its elected representative within a standard war bargaining setup. I find that the specific structure of this relationship and the problems resulting from it help overcome information asymmetries in crisis bargaining. This provides an alternative theoretic explanation of democracies‘ signaling advantage which may turn out to be more realistic than the concept of audience costs.

JEL-Classification: C78, D74, J52

Keywords: Democratic peace; principal-agent problems; crisis bargaining