Enigma

Abstract

How does intelligence shape conflict? A seamless flow of information may yield immediate benefits. But such success may expose the intelligence source, jeopardizing future benefits. I study the strategic use of intelligence in a famously unique context: the Allied breaking of the Nazi Enigma. I hand-collect daily data on code-breaking activity and naval warfare from primary and secondary sources. Relying on three sources of high-frequency variation, I show that intelligence had a sharp and unambiguous effect on lower-stakes war operations, i.e. Allied convoy rerouting. But its use in higher-stakes operations, i.e. the sinking of Nazi U-boats, was nuanced: targeted at high-quality commanders and increasing in later war periods.