War and Democratic Political Institutions

I recall hearing an author express the opinion that nations have the foreign policy that they can afford.  That is a country will involve itself in military conflict overseas to the extent that it is capable of doing so.  The only limitation will be that a country cannot expend resources that it doesn't have.  I don't know whether this is the case, but it raises an interesting question.

For those of us who believe that war should be avoided, what steps are likely to diminish the probability that a war will occur?  If we take the above consideration into account, factors that prevent a country from being able to finance a war would be the only effective way of dissuading one from doing so.  A balanced budget, low taxes and high social spending would combine so as the make the necessary change.  Democratic governance figures prominently.

I wonder if we could come up with a theory about what sort of democratic institutions are most likely to prevent war.  One theory I have heard is that democracies instill a strong aversion to losing wars in the leaders. Any leader who loses a war is almost certain to lose office as well.  But what I am interested in is whether supplementing representative democracy with an initiatives and referenda would help.  I suspect it would.  Voters frequently pass initiatives calling for a reduction in taxes, new social spending or even a balanced budget.

Perhaps people have directly voted to go to war.  This might have happened in ancient Greece.  However, I can't think of any modern example of war being started as a result of an initiative.  It would seem that and initiative process would make war less likely by taking resources away from governments that might otherwise be used for warfare.

In our own country the long trend since WWII has been for social spending to expand and military spending to contract.  Taxes have remained constant as a percent of GDP.  Tax rates have gone down, but since people have been getting more prosperous, progressive income tax pushes them into higher brackets.