Abstract
Why did Argentina risk seizing the Malvinas/Falkland Islands by force in 1982, provoking a war against Great Britain, and what are the larger implications of this case? We revisit this influential episode using counterfactual analysis to interpret newly declassified declarations of high-ranking state officials involved in the decision to occupy the islands. These sources cast doubt on the diversionary-war and miscalculation theses of the Malvinas/Falklands War, among other extant interpretations. Evidence suggests long-term power dynamics and prospect theory better explain Argentine foreign policy behavior leading to the war. Due to aversion to tangible losses, the leadership of waning states like Argentina might favor risky military strategies despite their low expected utility. These biases may provoke a war if decision-making groups are small and isolated from de-biasing influences. Our explanation illustrates the value of prospect theory to understand why certain declining states behave aggressively and more plausibly explains the Malvinas/Falklands War when confronted to set-theoretic counterfactual analysis.
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