The security policies of the United States and the Soviet Union can be interpreted as manifestations of a single “rivalry system.” If each state's security policies are driven by the same underlying factors, then any effort to separate the contributions of internal and external determinants of the arms race is essentially misleading. We use dynamic factor analysis to evaluate whether an unobservable dimension of rivalry explains the dynamics exhibited by the military expenditures and diplomatic hostility of these two states. A one-factor model explains much of the variance of these data series, although some evidence indicates the possible existence of a second factor. More generally, the results of this analysis question the validity of many structural equation models of dyadic interaction.
Allison, Graham T. 1971. Essence of decision: Explaining the Cuban missile crisis. Boston: Little, Brown.
3.
Anderson, T. W.1963. The use of factor analysis in the statistical analysis of multiple time series. Psychometrika28:1-25.
4.
Arrow, Kenneth J. 1963. Social choice and individual values, 2d ed.New Haven, CT: Yale University Press.
5.
Azar, Edward . 1980. The conflict and peace data bank (COPDAB) project. Journal of Conflict Resolution24:143-152.
6.
Azar, Edward , and Thomas Havener. 1976. Discontinuities in the symbolic environment: A problem in scaling events. International Interactions2:231-246.
7.
Beck, Nathaniel . 1989. Estimating dynamic models using Kalman filtering. In Political analysis, edited by James Stimson, vol. 1. Ann Arbor: University of Michigan Press.
8.
Bollen, Kenneth A. 1989. Structural equations with latent variables. New York: Wiley.
9.
Diehl, Paul F.1985. Contiguity and military escalation in major power rivalries, 1816-1980. Journal of Politics47:1203-1211.
10.
Freeman, John R. 1990. Systematic sampling, temporal aggregation, and the study of political relationships. In Political analysis, edited by James Stimson, vol. 1. Ann Arbor: University of Michigan Press.
11.
Freeman, John R. , John T. Williams, and Tse-min Lin. 1989. Vector autoregression and the study of politics. American Journal of Political Science33:842-877.
12.
Gaddis, John Lewis . 1986. The long peace: Elements of stability in the postwar international system. International Security10:99-142.
13.
Geweke, John. 1975. Employment turnover and wage dynamics in U.S. manufacturing. Ph.D. diss., University of Minnesota.
14.
Geweke, John . 1977. The dynamic factor analysis of economic time-series models. In Latent variables in socio-economic models, edited by D. J. Aigner and Arthur S. Goldberger. Amsterdam: North-Holland.
15.
Goldstein, Joshua S. , and John R. Freeman. 1990. Three-way street: Strategic reciprocity in world politics. Chicago: University of Chicago Press.
16.
Goldstein, Joshua S.1991. U.S.-Soviet-Chinese relations: Routine, reciprocity, or rational expectations?. American Political Science Review, 85:17-35.
17.
Gottman, John M. 1981. Time series analysis. New York: Cambridge University Press.
18.
Granger C.W.J. , and Paul Newbold. 1977. Forecasting economic time series. New York: Academic Press.
19.
Harvey, Andrew C. 1989. Forecasting, structural time series modeles and the Kalman Filter. Cambridge: Cambridge University Press.
20.
Isard, Walter , and Charles H. Anderton. 1985. Arms race models: A survey and synthesis. Conflict Management and Peace Science8:27-122.
21.
Jones, David L. 1988. The dynamics of contemporary international conflict. Ph.D. diss., Indiana University, Bloomington.
22.
Jöreskog, Karl G.1967. Some contributions to factor analysis. Psychometrika32:443-482.
23.
King, Gary . 1989a. Unifying political methodology: The likelihood theory of statistical inference. Cambridge: Cambridge University Press.
24.
King, Gary1989b. Event count models for international relations: Generalizations and applications. International Studies Quarterly33:123-147.
25.
Majeski, Stephen J.1983a. Dynamic properties of the U.S. military expenditure decision-making process. Conflict Management and Peace Science7:65-86.
26.
Majeski, Stephen J.1983b. Mathematical models of the U.S. military expenditure decision-making process. American Journal of Political Science27:485-514.
27.
Marra, Robin F.1985. A cybernetic model of the U.S. defense expenditure policy-making process. International Studies Quarterly29:357-384.
28.
McGinnis, Michael D.1991. Richardson, rationality, and restrictive models of arms races. Journal of Conflict Resolution35:443-473.
29.
McGinnis, Michael D. , and John T. Williams. 1989. Change and stability in superpower rivalry. American Political Science Review83:1101-1123.
30.
McGinnis, Michael D. 1991. Correlated equilibria in domestic and international policy games, unpublished paper, Indiana University.
31.
Meyer, Stephen M. 1984. Soviet national security decisionmaking: What do we know and what do we understand? In Soviet decisionmaking for national security, edited by Jiri Valenta and William Potter, 255-297. London: Allen & Unwin.
32.
Moll, Kendall D. , and Gregory M. Luebbert. 1980. Arms race and military expenditure models: A review. Journal of Conflict Resolution24:153-185.
33.
Most, Benjamin A. , and Harvey Starr. 1984. International relations theory, foreign policy substitutability, and “nice laws”. World Politics36:383-406.
34.
Most, Benjamin A. , and Harvey Starr 1989. Inquiry, logic and international politics. Columbia: University of South Carolina Press.
35.
Ordeshook, Peter C. 1986. Game theory and political theory. Cambridge: Cambridge University Press.
36.
Ostrom, Charles W. Jr.1978. A reactive linkage model of the U.S. defense expenditure policymaking process. American Political Science Review72:941-957.
37.
Ostrom, Charles W., Jr. , and Robin F. Marra. 1986. U.S. defense spending and the Soviet estimate. American Political Science Review80:819-842.
38.
Rajmaira, Sheen , and Michael D. Ward. 1990. Evolving foreign policy norms: Reciprocity in the superpower triad. International Studies Quarterly34:457-475.
39.
Rattinger, Hans . 1975. Armaments, detente, and bureaucracy: The arms race in Europe. Journal of Conflict Resolution19:571-595.
40.
Richardson, Lewis Fry . 1960. Arms and insecurity: A mathematical study of the causes and origins of war. Pittsburgh: Boxwood Press.
41.
Riker, William H. 1982. Liberalism against populism. San Francisco: Freeman.
42.
Rummel, Rudolph J. 1972. Dimensions of nations. Beverly Hills: Sage.
43.
Russett, Bruce M. 1983. International interactions and processes: The internal vs. external debate revisited. In Political science: The state of the discipline, edited by Ada W. Finifter, 541-568. Washington, DC: American Political Science Association.
44.
Sargent, Thomas , and Christopher Sims. 1977. Business cycle modeling without pretending to have too much a priori economic theory. In New methods of business cycle research: Proceedings from a conference, edited by C. Sims, 45-109. Minneapolis: Federal Reserve Bank of Minneapolis.
45.
Sims, Christopher A.1980. Macroeconomics and reality. Econometrica48:1-48.
46.
Siverson, R. M. , and P. F. Diehl. 1989. Arms races, the conflict spiral, and the onset of war. In Handbook of war studies, edited by Manus I. Midlarsky, 195-218. Winchester, MA: Unwin Hyman.
47.
Smith, Theresa C.1980. Arms race instability and war. Journal of Conflict Resolution24:253-284.
48.
Stockholm International Peace Research Institute (SIPRI) . Various years. World armaments and disarmament. London: Taylor and Francis, Oxford University Press.
49.
Ward, Michael D.1984. Differential paths to parity: A study of the contemporary arms race. American Political Science Review78:297-317.
50.
Watson, Mark W. , and Robert F. Engle. 1983. Alternative algorithms for the estimation of dynamic factor, mimic and varying coefficient regression models. Journal of Econometrics23:385-400.
51.
Williams, John T. , and Michael D. McGinnis. 1988. Sophisticated reaction in the U.S.-Soviet arms race: Evidence of rational expectations. American Journal of Political Science32:968-995.
52.
Williams, John T.Forthcoming. Expectations and the dynamics of U.S. defense budgets. In The political economy of military spending in the U.S., edited by Alex Mintz. Harper Collins.
53.
Zinnes, Dina A.1980. Three puzzles in search of a researcher. International Studies Quarterly24:315-342.
