Military Moral Hazard and the Fate of Empires∗ Charles Z. Zhengy April 14, 2015 Abstract To understand why authority was delegated to the military in some empires and centralized in others, we construct a model where the military may revolt, the civilians may shirk, and the social planner chooses how much power to delegate to the mili- tary, which enables the military to defend, but also to usurp, the empire. From the parameters for an empire a unit-free index is derived which captures the belligerence and relative wealthiness of the peripheral peoples and determines the empire's socially optimal level of military delegation. Comparative statics of the optimum with respect to the index is consistent with historical data, based on records of battles and city pop- ulations, of the Roman and Chinese empires. The institutional contrast between the two, with power delegated to the military in Rome while centralized to the emperor in China, may therefore be ascribed to their different environments, with imperial China surrounded by more indigent adversaries. ∗The paper has benefited from comments contributed by Ricardo Alonso, Jiahua Che, Kim-Sau Chung, Jim Davies, Ronald Edwards, Edward Schlee, Wing Suen, Siyang Xiong, and seminar participants of Ari- zona State University, Chinese University of Hong Kong, London School of Economics, McGill University, University of Bristol, University of Hong Kong, University of Mannheim and University of York. yDepartment of Economics, University of Western Ontario, London, Ontario,
[email protected], http://economics.uwo.ca/faculty/zheng/. 1 1 Introduction Each being a vast dominion of rich produce surrounded by so-called barbarians, both the Ro- man and Chinese empires relied on large armies to defend the frontiers.