Rational empires: An institutional theory of imperial expansion

Formal imperial expansion is a phenomenon that is poorly explained by existing international relations and political economy literature. I present a theory of revenue maximizing sovereigns choosing to conquer or not conquer regions based on their institutional constraints and incentives, the institutional constraints and incentives of imperial rivals, as well as the presence or absence of an "assurance framework" of institutions in the target region. I find that states with small winning coalitions have a weakly dominant strategy to take territory, regardless of rival or target attributes, due to their inability to obtain useful benefits without direct political control. Small W states (such as 19th century Portugal) cannot politically sustain free trade in its own domain, and cannot even benefit from other actors providing free trade zones; therefore, such states seek to acquire territory to provide private goods exclusively to the small coalition supporting the leadership. For large W states (such as 19th century Great Britain) the predictions are more complicated. They prefer to not colonize territories and gain access to additional resources through trade. They do engage in territorial expansion, however, when the belief in attractive institutions in the target is low or when they are confronted with predatory small W rivals. The model also predicts that small W states will engage in more plunder and provide fewer public goods in their colonies and hold these colonies longer; while the converse should be true in colonies taken by large W actors. The model is formalized as games of incomplete information which are solved for Bayes Nash equilibria. Employing primary and secondary sources, I test the theory against alternative arguments to account for patterns of European imperial expansion in nineteenth-century tropical Africa and China---explaining the large scale acquisition of territory in Africa and the lack of such large-scale acquisition in China. In addition, a longitudinal study of British India is executed to test the hypotheses regarding the provision of public goods and plunder.