In essence, I use GDP and CINC as representatives for the standard, gross approach to measuring power and I use GDP × GDP per capita as the representative for my alternative, net approach. Second, I use large datasets to assess how well some of the single-variable indicators highlighted above (GDP, CINC, and GDP × GDP per capita) predict the winners and losers of international disputes and wars. 35 Thus, the strength of the power-as-outcomes approach-its specificity-becomes a weakness when the goal is to assess the overall balance of power. 34 Preferences, however, are not fixed-different countries, at different times, want different things-so although analysts might be able to know a country's preferred outcome regarding a particular event, it is difficult, if not impossible, to know the preferences of many countries across hundreds of events over long periods of time. The reason is that evaluating outcomes requires knowing the preferences of the actors involved in other words, determining which country won a dispute (the outcome) requires establishing what each country wanted to happen in the first place (preferences). First, scholars often want to assess the overall balance of power-that is, the balance of power across a broad range of issues-but the power-as-outcomes approach is inherently issue specific. Yet, the power-as-outcomes approach has several weaknesses that limit its usefulness for the empirical study of international relations. That the United States’ economic and military lead over other countries is much larger than typically assumed, and that the trends are mostly in America's favor. Applying this improved framework to the current balance of power suggests In addition, it improves the in-sample goodness-of-fit in the majority of studies published in leading journals over the past five years. This approach predicts war and dispute outcomes involving great powers over the past 200 years more accurately than those that use gross indicators of power. A sounder approach accounts for these costs by measuring power in net rather than gross terms. As a result, standard indicators exaggerate the wealth and military power of poor, populous countries, such as China and India.
Most studies evaluate countries’ power using broad indicators of economic and military resources, such as gross domestic product and military spending, that tally their wealth and military assets without deducting the costs they pay to police, protect, and serve their people. Power is the most important variable in world politics, but scholars and policy analysts systematically mismeasure it.
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