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Economic Interdependence and Peaceful Power Transition
Unformatted Document Text:  11 Therefore, domestic political stability is very important for both the challenger and the dominant state. For the dominant country, the political and economic influence is shrinking globally. To divert domestic social unrest, the dominant state might initiate preventive war to gain rally effects domestically, and to defeat a potential challenger, which can enhance its reputation internationally. This can greatly enhance the political stability of the dominant state. Stable political institution can help to reduce the likelihood of conflict, and in this sense, the dominant nation is unlikely to initiate a preventive war. For the rising state, if in transition, very high speed of development and underdeveloped political system might increase social economic problems. If the challenger is enduring domestic political instability during the period of approaching or overtaking the dominant state, it will generally delay the process of power transition. A stable political environment domestically, can help to shorten the speed of overtaking and therefore be more conducive to peaceful power transitions. Likewise, an unstable political environment domestically will increase the probability of social turmoil and hinder the development of the economy. This will slow down the catch up or overtaking process, and expand the prolonged parity. Therefore unstable political institutions are associated with greater probability of conflictual power transition. The least conflictual situation during a power transition would be characterized by a combination of a satisfied challenger with very a high level of economic interdependence and political stability. The most conflict-prone type of power transition would result from a dissatisfied challenger with less international involvement and an unstable domestic political environment. Several hypotheses are drawn based on the above analysis:

Authors: Zhou, Xinwu.
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11
Therefore, domestic political stability is very important for both the challenger and
the dominant state. For the dominant country, the political and economic influence is
shrinking globally. To divert domestic social unrest, the dominant state might initiate
preventive war to gain rally effects domestically, and to defeat a potential challenger,
which can enhance its reputation internationally. This can greatly enhance the political
stability of the dominant state. Stable political institution can help to reduce the
likelihood of conflict, and in this sense, the dominant nation is unlikely to initiate a
preventive war.
For the rising state, if in transition, very high speed of development and
underdeveloped political system might increase social economic problems. If the
challenger is enduring domestic political instability during the period of approaching or
overtaking the dominant state, it will generally delay the process of power transition. A
stable political environment domestically, can help to shorten the speed of overtaking and
therefore be more conducive to peaceful power transitions. Likewise, an unstable
political environment domestically will increase the probability of social turmoil and
hinder the development of the economy. This will slow down the catch up or overtaking
process, and expand the prolonged parity. Therefore unstable political institutions are
associated with greater probability of conflictual power transition.
The least conflictual situation during a power transition would be characterized by a
combination of a satisfied challenger with very a high level of economic interdependence
and political stability. The most conflict-prone type of power transition would result from
a dissatisfied challenger with less international involvement and an unstable domestic
political environment. Several hypotheses are drawn based on the above analysis:


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