Third-party intervention and escalation in Kosovo: Does moral hazard explain it?

This piece provides a critique of the moral-hazard theory of third-party interventions. While the author agrees with the proponents of the theory that threats of intervention may have radicalizing effects on a minority's behaviour by reducing its risks in carrying out violence, he argues that this is an incomplete causal argument, if what we are trying to explain is escalated violence and not just minority radicalization. This criticism is based on two claims in particular. First, if the minority and the state observe the same third-party threat, they should both adjust their bargaining calculations. This means that such threats should affect the terms of settlement, and not the likelihood of violence. Second, he argues that cases where the minority radicalization results from explicit or implicit encouragement by third parties should not count as evidence supporting the moral-hazard theory. An internally consistent moral-hazard account requires an explanation of why third parties were unable to make their threats of intervention conditional on the minority's responsible behaviour. The piece also provides an alternative, informal analysis of escalated violence in response to third-party interventions focusing on the effects of incomplete information regarding the target-state's and the third party's preferences over a set of outcomes. The author uses evidence from Kosovo to compare the two arguments.