Conflict and Trade

Session Submission Type: Full Paper Panel

Session Description

Can trade prevent conflict? This enduring question of international relations has generated an enormous academic literature and has had a profound impact on Western foreign policy. Yet the causal mechanisms that drive the empirical relationship between economic interdependence and reduced military conflict still have not been fully established. This panel features cutting edge research on the complex relationship between conflict and trade that move beyond paradigmatic approaches to help establish scope conditions to explain when trade might reduce conflict and when it might not. All four papers grapple with the fundamental tension between the incentives of states as competitors on the one hand and as trade partners on the other. Together they enrich our understanding of how unprecedented levels of trade and investment can coexist with the persistence of military coercion in our globalized world.

Williams, Donahue, and Crescenzi explore how different compositions of trade can change the presence and intensity of domestic pressure to avoid or resolve border disputes, which fuel militarized disputes and dampen trade between states. This disaggregation of trade helps us better understand the relationship between trade and border disputes, which in turn illuminates how opportunity costs associated with trade disruptions might mitigate conflict. Zeng reverses the direction of this causal arrow to investigate how trade might enrich and empower states and make them less likely to abide by existing peaceful deals. He finds that economic interdependence can actually incentivize states to trade short-term economic losses for long-term political or territorial gains, potentially reversing the pacifying effect of commerce.

Gartzke offers yet another mechanism for how and when trade can reduce conflict. He argues that, in a globalized world economy, states are better off if other states refrain from fighting, but may still individually prefer to exercise force for national gain. As such, we should expect that rising global trade and investment should have the strongest pacifying effect among states with limited commercial ties, not (necessarily) between major trading states. Finally, Cooley points out that observed patterns of trade are not independent of latent military coercion, but rather occur in the shadow of military power. He builds a game-theoretic model of trade policy choice under threat and estimates the parameters of this model using data on observed trade policies, military capabilities, and geographical features.

Sub Unit

• Division 21: Conflict Processes

Individual Presentations

• Unsettled Borders in a Market Context - Rob Williams, Washington University in St. Louis; Bailee Donahue, University of Pennsylvania; Mark J.C. Crescenzi, University of North Carolina, Chapel Hill

• The Last War: Economic Interdependence and the Commitment Problem - Yuleng Zeng, University of Salzburg

• Global Trade and Interstate Conflict: The Indirect Origins of Liberal Peace - Erik Gartzke, UCSD

• Trade Policy in the Shadow of Power: Quantifying Military Coercion - Brendan Cooley, Princeton University

Chair

• Mark J.C. Crescenzi University of North Carolina, Chapel Hill

Discussants

• Mariya Grinberg University of Chicago

• Jiakun Zhang University of Kansas