Investing in Arms to Secure Water

Abstract

Where nations depend on resources originating outside their borders, such as river water, some believe that the resulting international tensions may lead to conflict. Homer-Dixon (1999) and Toset et al. (2000) argue such conflict is most likely between riparian neighbours, with a militarily superior downstream 'leader' nation. In a two stage stochastic game, solutions involving conflict are more common absent a leader, where a pure strategy equilibria may not exist. When upstream defensive expenditures substitute for water using investments, a downstream leader may induced an arms race to increase downstream water supplies. Water scarcity may not be a cause for war, but may cause a buildup in arms that can make any conflict between riparian neighbours more serious