Topic
Economic interdependence
About: Economic interdependence is a research topic. Over the lifetime, 1357 publications have been published within this topic receiving 33469 citations.
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TL;DR: In this article, the authors investigated the effect of economic linkages on the likelihood that dyads will engage in militarized interstate disputes and 14 wars, and found that high degree of economic interdependence has the greatest potential for increasing the likelihood of conflict.
Abstract: This article investigates the long-standing liberal hypothesis that trade ties facilitate interstate peace. Rather than assuming that trade will always promote peace, the author highlights the need to consider both the nature and context of economic linkages in assessing whether such ties are more likely to dampen or amplify interstate conflict. The study encompasses a diverse group of dyadic relationships for the period 1870-1938, 14,341 dyad years, and includes 270 militarized interstate disputes and 14 wars. After controlling for the potentially confounding influences of contiguity, regime type (joint democracy), relative capabilities, and alliance commitments, the author finds evidence that economic linkages have a dramatic influence on whether or not dyads engage in militarized disputes, but no influence on the occurrence of wars. Rather than inhibiting conflict, extensive economic interdependence increases the likelihood that dyads will engage in militarized interstate disputes. Peace through trade is most likely to arise among dyads composed of mutually dependent trading partners. Even then, the relationship between interdependence and conflict appears to be curvilinear, where low to moderate degrees of interdependence reduce the likelihood of dyadic disputes, and extensive economic linkages increase the probability of militarized disputes. Extreme interdependence, whether symmetrical or asymmetrical, has the greatest potential for increasing the likelihood of conflict.
554 citations
TL;DR: The impact of war on interdependence was insightful: World War I wrought unprecedented destruction, not only on the battlefield but also on the social and political systems that had thrived during the relatively peaceful years since 1815.
Abstract: THROUGHOUT T H E twentieth century, modernists have been proclaiming that technology would transform world politics. In 1910 Norman Angell declared that economic interdependence rendered wars irrational and looked forward to the day when they would become obsolete. Modernists in the 1970s saw telecommunications and jet travel as creating a global village, and believed that the territorial state, which has dominated world politics since the feudal age, was being eclipsed by nonterritorial actors such as multinational corporations, transnational social movements, and international organizations. Likewise, prophets such as Peter Drucker, Alvin and Heidi TofHer, and Esther Dyson argue that today s information revolution is ending hierarchical bureaucracies and leading to a new electronic feudalism with overlapping communities and jurisdictions laying claim to multiple layers of citizens' identities and loyalties. The modernists of past generations were partly right. Angell's understanding of the impact of war on interdependence was insightful: World War I wrought unprecedented destruction, not only on the battlefield but also on the social and political systems that had thrived during the relatively peaceful years since 1815. As the modernists of the 1970s predicted, multinational corporations, nongovernmental
507 citations
TL;DR: This article found no relationship between interdependence and peace, but the pacific benefits of trade become evident among the politically relevant dyads (those including a major power, or two contiguous states), among whom the great majority of disputes occur.
Abstract: Some recent analyses challenge previous reports which show that economically important trade significantly reduces the probability of militarized disputes between countries. Beck et al. (1998) address the effect of temporal dependence in the time-series data on empirical support for the liberal peace, while Barbieri (1998) makes a number of important changes in theoretical specification and measurement. Using data for nearly the entire post-World War II era (1950-92), we first replicate the specifications of the challengers. When analyzing all dyads, we find no relationship between interdependence and peace, but the pacific benefits of trade become evident among the politically relevant dyads (those including a major power, or two contiguous states), among whom the great majority of disputes occur. Subsequently, we introduce, in stages, an alternative method of controlling for temporal dependence, our theoretically preferred measures of interdependence and proximity, and new dyadic estimates for unreported trade. With these sequential modifications we find increasingly strong support for the liberals' belief that economic interdependence and democracy have important pacific benefits. This support is largely robust to the methods of controlling for temporal dependence and to whether an attempt is made to explain involvement in disputes or merely their onset. We find no evidence that asymmetric trade increases conflict.
485 citations
TL;DR: The authors show that capital interdependence contributes to world political stability and contributes to economic stability independent of the effects of trade, democracy, interest, and other variables, and demonstrate formally how interdependent economic linkages can ine fence states' recourse to military violence.
Abstract: Research appears to substantiate the liberal conviction that trade fosters global peace. Still, existing understanding of linkages between cone ict and international economics is limited in at least two ways. First, cross-border economic relationships are far broader than just trade. Global capital markets dwarf the exchange of goods and services, and states engage in varying degrees of monetary policy coordination. Second, the manner in which economics is said to inhibit cone ict behavior is implausible in light of new analytical insights about the causes of war. We discuss, and then demonstrate formally, how interdependence can ine uence states’ recourse to military violence. The risk of disrupting economic linkages— particularly access to capital— may occasionally deter minor contests between interdependent states, but such opportunity costs will typically fail to preclude militarized disputes. Instead, interdependence offers nonmilitarized avenues for communicating resolve through costly signaling. Our quantitative results show that capital interdependence contributes to peace independent of the effects of trade, democracy, interest, and other variables. Students of world politics have long argued that peace is a positive externality of global commerce. Theorists like Montesquieu and Kant and practitioners like Woodrow Wilson asserted that economic relations between states pacify political interaction. Mounting evidence in recent years appears to substantiate these claims. Multiple studies, many identie ed with the democratic peace, link interstate trade with reductions in militarized disputes or wars. 1 While we concur with the evolving
480 citations
TL;DR: In this article, the authors test Kantian and realist theories of interstate conflict using data extending over more than a century, treating those theories as complementary rather than competing, and find that high levels of democracy and economic interdependence in the international system reduce the probability of conflict for all dyads, not just for those that are democratic or dependent on trade.
Abstract: The authors test Kantian and realist theories of interstate conflict using data extending over more than a century, treating those theories as complementary rather than competing. As the classical liberals believed, democracy, economic interdependence, and international organizations have strong and statistically significant effects on reducing the probability that states will be involved in militarized disputes. Moreover, the benefits are not limited to the cold war era. Some realist influences, notably distance and power predominance, also reduce the likelihood of interstate conflict. The character of the international system, too, affects the probability of dyadic disputes. The consequences of having a strong hegemonic power vary, but high levels of democracy and interdependence in the international system reduce the probability of conflict for all dyads, not just for those that are democratic or dependent on trade.
471 citations