How do foreign interests influence the setting of policies by particular countries? What are the implications of such foreign influence? In this paper we develop a theory of foreign influence and apply it to the study of optimal tariffs. We develop a two-country probabilistic voting model of...

We determine whether and how concessions to an aggressive country by its non-aggressive rival can be used to forestall war in a dynamic environment. In every period, the aggressive country can seize some of non-aggressive country's resources by war. Alternatively, it can wait for the...