Exploring the “Phoenix Factor” with the Collective Goods Perspective

Abstract

This inquiry explores whether domestic political and economic levels of destruction account for the ability of developed nations to recover within two decades from the massive economic losses they suffer in the wake of a war. We test Olson's collective goods argument that nations defeated in war, the political structures and distributional coalitions of which are also devastated, will thereby increase economic competition and accelerate economic recovery. We also tangentially explore the impact of the economic devastation on postwar recovery. Our results show that economic destruction has a positive impact on the rates of recovery, but that the destruction of political structures does not add to that explanation. We conclude, somewhat reluctantly, that Olson's persuasive collective goods argument does not explain the well-established difference in the postwar recovery among victors and vanquished.