Hostname: page-component-7c8c6479df-24hb2 Total loading time: 0 Render date: 2024-03-19T11:00:37.012Z Has data issue: false hasContentIssue false

Trade Blocs, Trade Flows, and International Conflict

Published online by Cambridge University Press:  09 July 2003

Get access

Abstract

The relationship between foreign trade and political conflict has been a persistent source of controversy among scholars of international relations. Existing empirical studies of this topic have focused on the effects of trade flows on conflict, but they have largely ignored the institutional context in which trade is conducted. In this article we present some initial quantitative results pertaining to the influence on military disputes of preferential trading arrangements (PTAs), a broad class of commercial institutions that includes free trade areas, common markets, and customs unions. We argue that parties to the same PTA are less prone to disputes than other states and that hostilities between PTA members are less likely to occur as trade flows rise between them. Moreover, we maintain that heightened commerce is more likely to inhibit conflict between states that belong to the same preferential grouping than between states that do not. Our results accord with this argument. Based on an analysis of the period since World War II, we find that trade flows have relatively little effect on the likelihood of disputes between states that do not participate in the same PTA. Within PTAs, however, there is a strong, inverse relationship between commerce and conflict. Parties to such an arrangement are less likely to engage in hostilities than other states, and the likelihood of a military dispute dips markedly as trade increases between them.

Type
Articles
Copyright
Copyright © The IO Foundation 2000

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Anderson, Kym, and Blackhurst, Richard. 1993. Introduction and Summary. In Regional Integration and the Global Trading System, edited by Anderson, Kym and Blackhurst, Richard, 115. London: Harvester Wheatsheaf.Google Scholar
Azar, Edward E. 1993. Conflict and Peace Data Bank (COPDAB), 1948–1978. Study No. 7767. Ann Arbor, Mich.: Inter-University Consortium for Political and Social Research.Google Scholar
Balassa, Bela A. 1961. The Theory of Economic Integration. London: Allen and Unwin.Google Scholar
Baldwin, David A. 1980. Interdependence and Power: A Conceptual Analysis. International Organization 34 (4):471506.CrossRefGoogle Scholar
Barbieri, Katherine. 1996a. Economic Interdependence: A Path to Peace or a Source of Interstate Conflict? Journal of Peace Research 33 (1):2949.CrossRefGoogle Scholar
Barbieri, Katherine. 1996b. Explaining Discrepant Findings in the Trade-Conflict Literature. Paper presented at the 37th Annual Meeting of the International Studies Association, San Diego, Calif.Google Scholar
Barrera, Mario, and Haas, Ernst B.. 1969. The Operationalization of Some Variables Related to Regional Integration: A Research Note. International Organization 23 (1): 150–60.CrossRefGoogle Scholar
Beck, Nathaniel, and Katz, Jonathan. 1997. The Analysis of Binary Time-Series-Cross-Sectional Data and/or the Democratic Peace. Paper presented at the 14th Annual Meeting of the Political Methodology Group, Columbus, Ohio.Google Scholar
Beck, Nathaniel, and Tucker, Richard. 1996. Conflict in Space and Time: Time-Series Cross-Section Analysis with a Binary Dependent Variable. Paper presented at the 92nd Annual Meeting of the American Political Science Association, San Francisco, Calif.Google Scholar
Beck, Nathaniel, Katz, Jonathan N., and Tucker, Richard. 1998. Taking Time Seriously: Time-Series-Cross-Section Analysis with a Binary Dependent Variable. American Journal of Political Science 42 (4):1260–88.CrossRefGoogle Scholar
Bhagwati, Jagdish. 1993. Regionalism and Multilateralism: An Overview. In New Dimensions in Regional Integration, edited by de Melo, Jaime and Panagariya, Arvind, 2251. New York: Cambridge University Press.CrossRefGoogle Scholar
Bueno de Mesquita, Bruce, and Lalman, David. 1992. War and Reason: Domestic and International Imperatives. New Haven, Conn.: Yale University Press.CrossRefGoogle Scholar
Bueno de Mesquita, Bruce, and Siverson, Randolph M.. 1997. Nasty or Nice? Political Systems, Endogenous Norms, and the Treatment of Adversaries. Journal of Conflict Resolution 41 (1):175–99.CrossRefGoogle Scholar
Buzan, Barry. 1984. Economic Structure and International Security: The Limits of the Liberal Case. International Organization 38 (4):597624.CrossRefGoogle Scholar
Copeland, Dale C. 1996. Economic Interdependence and War: A Theory of Trade Expectations. International Security 20 (4):541.CrossRefGoogle Scholar
de Melo, Jaime, and Panagariya, Arvind. 1993. Introduction. In New Dimensions in Regional Integration, edited by de Melo, Jaime and Panagariya, Arvind, 321. New York: Cambridge University Press.CrossRefGoogle Scholar
Deutsch, Karl W., Burrell, Sidney A., Kann, Robert A., Lee, Maurice Jr, Lichterman, Martin, Lindgren, Raymond E., Lowenheim, Francis L., and Van Wagenen, Richard W.. 1957. Political Community and the North Atlantic Area: International Organization in the Light of Historical Experience. Princeton, N.J.: Princeton University Press.Google Scholar
Doyle, Michael W. 1997. Ways of War and Peace: Realism, Liberalism, and Socialism. New York: Norton.Google Scholar
Fernández, Raquel, and Portes, Jonathan. 1998. Returns to Regionalism: An Analysis of Nontraditional Gains from Regional Trade Agreements. The World Bank Economic Review 12 (2):197220.CrossRefGoogle Scholar
Foroutan, Faezeh. 1993. Regional Integration in Sub-Saharan Africa: Past Experience and Future Prospects. In New Dimensions in Regional Integration, edited by de Melo, Jaime and Panagariya, Arvind, 234–71. New York: Cambridge University Press.CrossRefGoogle Scholar
Friedrich, Robert J. 1982. In Defense of Multiplicative Terms in Multiple Regression Equations. American Journal of Political Science 26 (4):797833.CrossRefGoogle Scholar
Garrett, Geoffrey, and Weingast, Barry R.. 1993. Ideas, Interests, and Institutions: Constructing the European Union's Internal Market. In Ideas and Foreign Policy, edited by Goldstein, Judith and Keohane, Robert O., 173206. Ithaca, N.Y.: Cornell University Press.Google Scholar
Gartzke, Erik. 1998. Kant We All Just Get Along? Opportunity, Willingness, and the Origins of the Democratic Peace. American Journal of Political Science 42 (1):127.CrossRefGoogle Scholar
Gartzke, Erik. 2000. Preferences and the Democratic Peace. International Studies Quarterly 44 (2): 191212.CrossRefGoogle Scholar
Gasiorowski, Mark. 1986. Economic Interdependence and International Conflict: Some Cross-National Evidence. International Studies Quarterly 30 (1):2338.CrossRefGoogle Scholar
Gasiorowski, Mark, and Polachek, Solomon W.. 1982. Conflict and Interdependence: East-West Trade and Linkages in the Era of Detente. Journal of Conflict Resolution 26 (4):709–29.CrossRefGoogle Scholar
Gilpin, Robert. 1981. War and Change in World Politics. New York: Cambridge University Press.CrossRefGoogle Scholar
Gilpin, Robert. 1987. The Political Economy of International Relations. Princeton, N.J.: Princeton University Press.CrossRefGoogle Scholar
Gochman, Charles S., and Maoz, Zeev. 1984. Militarized Interstate Disputes, 1816–1976: Procedures, Patterns, and Insights. Journal of Conflict Resolution 28 (4):585615.CrossRefGoogle Scholar
Gowa, Joanne. 1999. Ballots and Bullets: The Elusive Democratic Peace. Princeton, N.J.: Princeton University Press.Google Scholar
Greene, William H. 1993. Econometric Analysis. 2d ed. Englewood Cliffs, N.J.: Prentice Hall.Google Scholar
Grieco, Joseph M. 1988. Anarchy and the Limits of Cooperation: A Realist Critique of the Newest Liberal Institutionalism. International Organization 42 (3):485507.CrossRefGoogle Scholar
Haggard, Stephan. 1997. Regionalism in Asia and the Americas. In The Political Economy of Regionalism, edited by Mansfield, Edward D. and Milner, Helen V., 2049. New York: Columbia University Press.Google Scholar
Hartland-Thunberg, Penelope. 1980. Trading Blocs, U.S. Exports, and World Trade. Boulder, Colo.: Westview Press.Google Scholar
Hirschman, Albert O. [1945] 1980. National Power and the Structure of Foreign Trade. Reprint, Berkeley: University of California Press.Google Scholar
Huxley, Tim. 1996. ASEAN's Role in the Emerging East Asian Regional Security Architecture. In Fragmented Asia: Regional Integration and National Disintegration in Pacific Asia, edited by Cook, Ian G., Doel, Marcus A., and Li, Rex, 2952. Aldershot: Avebury.Google Scholar
Irwin, Douglas A. 1996. Against the Tide: An Intellectual History of Free Trade. Princeton, N.J.: Princeton University Press.CrossRefGoogle Scholar
Jaggers, Keith, and Gurr, Ted Robert. 1995. Tracking Democracy's Third Wave with the Polity III Data. Journal of Peace Research 32 (4):469–82.CrossRefGoogle Scholar
Jervis, Robert. 1998. Realism in the Study of World Politics. International Organization 52 (4):971–91.CrossRefGoogle Scholar
Jones, Daniel M., Bremer, Stuart A., and Singer, J. David. 1996. Militarized Interstate Disputes, 1816–1992: Rationale, Coding Rules, and Empirical Patterns. Conflict Management and Peace Science 15 (2):163213.CrossRefGoogle Scholar
Kahler, Miles. 1995. Institution-Building in the Pacific. In Pacific Cooperation: Building Economic and Security Regimes in the Asia-Pacific Region, edited by Mack, Andrew and Ravenhill, John, 1639. Boulder, Colo.: Westview Press.Google Scholar
Keohane, Robert O. 1990. Economic Liberalism Reconsidered. In The Economic Limits to Modern Politics, edited by Dunn, John, 165–94. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Keohane, Robert O., and Martin, Lisa L.. 1995. The Promise of Institutionalist Theory. International Security 20 (1):3951.CrossRefGoogle Scholar
Keohane, Robert O., and Nye, Joseph S. Jr, 1975. International Interdependence and Integration. In Handbook of Political Science. Vol. 8, International Politics, edited by Greenstein, Fred I. and Polsby, Nelson W., 363414. Reading, Mass.: Addison-Wesley.Google Scholar
Keohane, Robert O., and Nye, Joseph S. Jr, 1977. Power and Interdependence: World Politics in Transition. Boston: Little, Brown.Google Scholar
Keynes, John Maynard. 1919. The Economic Consequences of the Peace. London: Macmillan.Google Scholar
King, Gary, and Zeng, Langche. Forthcoming. Logistic Regression in Rare Events. International Organization 55.Google Scholar
Krasner, Stephen D. 1976. State Power and the Structure of International Trade. World Politics 28 (3):317–47.CrossRefGoogle Scholar
Levy, Jack S. 1989. The Causes of War: A Review of Theories and Evidence. In Behavior, Society, and Nuclear War, Vol. 1., edited by Tetlock, Philip E., Husbands, Jo L., Jervis, Robert, Stern, Paul C., and Tilly, Charles, 209313. New York: Oxford University Press.Google Scholar
Levy, Jack S., and Vakili, Lily I.. 1992. Diversionary Action by Authoritarian Regimes: Argentina in the Falklands/Malvina Case. In The Internationalization of Communal Strife, edited by Midlarsky, Manus I., 118–46. London: Routledge.Google Scholar
Liberman, Peter. 1996. Does Conquest Pay? The Exploitation of Occupied Industrial Societies. Princeton, N.J.: Princeton University Press.Google Scholar
Long, J. Scott. 1997. Regression Models for Categorical and Limited Dependent Variables. Thousand Oaks, Calif.: Sage Publications.Google Scholar
Machlup, Fritz. 1977. A History of Thought on Economic Integration. New York: Columbia University Press.CrossRefGoogle Scholar
Maddison, Angus. 1995. Monitoring the World Economy, 1820–1992. Paris: OECD.Google Scholar
Mansfield, Edward D. 1994. Power, Trade, and War. Princeton, N.J.: Princeton University Press.Google Scholar
Mansfield, Edward D. 1998. The Proliferation of Preferential Trading Arrangements. Journal of Conflict Resolution 42 (5):523–43.CrossRefGoogle Scholar
Mansfield, Edward D., and Branson, Rachel. 1997. Alliances, Preferential Trading Arrangements, and International Trade. American Political Science Review 91 (1):94107.CrossRefGoogle Scholar
Mansfield, Edward D., Milner, Helen V., and Rosendorff, B. Peter. 1998. Why Democracies Cooperate More: Electoral Control and International Trade Agreements. Paper presented at the 94th Annual Meeting of the American Political Science Association, Boston.Google Scholar
Mansfield, Edward D., Pevehouse, Jon C., and Bearce, David H.. 19992000. Preferential Trading Arrangements and Military Disputes. Security Studies 9 (1–2):96118.CrossRefGoogle Scholar
Manzetti, Luigi. 1993. The Political Economy of MERCOSUR. Journal of Interamerican Studies and World Affairs 35 (4):101–41.CrossRefGoogle Scholar
Mastanduno, Michael. 1991. Do Relative Gains Matter? America's Response to Japanese Industrial Policy. International Security 16 (1):73113.CrossRefGoogle Scholar
McKeown, Timothy J. 1991. A Liberal Trade Order? The Long-Run Pattern of Imports to the Advanced Capitalist States. International Studies Quarterly 35 (2):151–72.CrossRefGoogle Scholar
McMillan, Susan M. 1997. Interdependence and Conflict. Mershon International Studies Review 41 (1):3358.CrossRefGoogle Scholar
Mearsheimer, John J. 1990. Back to the Future: Instability in Europe After the Cold War. International Security 15 (1):556.CrossRefGoogle Scholar
Mearsheimer, John J. 1994. The False Promise of International Institutions. International Security 19 (3):549.CrossRefGoogle Scholar
Moravcsik, Andrew. 1997. A Liberal Theory of International Politics. International Organization 51 (4):513–54.CrossRefGoogle Scholar
Morrow, James D., Siverson, Randolph M., and Taberes, Tressa E.. 1998. The Political Determinants of International Trade: The Major Powers, 1907–1990. American Political Science Review 92 (3):649–61.CrossRefGoogle Scholar
Mytelka, Lynn K. 1973. The Salience of Gains in Third-World Integrative Systems. World Politics 25 (2):236–50.CrossRefGoogle Scholar
Nogués, Julio J., and Quintanilla, Rosalinda. 1993. Latin America's Integration and the Multilateral Trading System. In New Dimensions in Regional Integration, edited by de Melo, Jaime and Panagariya, Arvind, 278313. New York: Cambridge University Press.CrossRefGoogle Scholar
Nye, Joseph S. 1971. Peace in Parts: Integration and Conflict in Regional Organization. Boston: Little, Brown.Google Scholar
Oneal, John R., and Russett, Bruce M.. 1997. The Classical Liberals Were Right: Democracy, Interdependence, and Conflict, 1950–1985. International Studies Quarterly 41 (2):267–94.CrossRefGoogle Scholar
Oneal, John R., and Russett, Bruce M.. 1999. The Kantian Peace: The Pacific Benefits of Democracy, Interdependence, and International Organizations, 1885–1992. World Politics 52 (1):137.CrossRefGoogle Scholar
Oneal, John R., Oneal, Frances H., Maoz, Zeev, and Russett, Bruce. 1996. The Liberal Peace: Interdependence, Democracy, and International Conflict, 1950–85. Journal of Peace Research 33 (1): 1128.CrossRefGoogle Scholar
Oren, Ido. 1990. The War Proneness of Alliances. Journal of Conflict Resolution 34 (2):208–33.CrossRefGoogle Scholar
Organization for Economic Cooperation and Development (OECD). 1993. Regional Cooperation and Developing Countries. Paris: OECD.Google Scholar
Organski, A. F. K., and Kugler, Jacek. 1980. The War Ledger. Chicago: University of Chicago Press.CrossRefGoogle Scholar
Perroni, Carlo, and Whalley, John. 1996. How Severe Is Global Retaliation Risk Under Increasing Regionalism? American Economic Review (Papers and Proceedings) 86 (2):5761.Google Scholar
Polachek, Solomon W. 1980. Conflict and Trade. Journal of Conflict Resolution 24 (1):5578.CrossRefGoogle Scholar
Polachek, Solomon W. 1997. Why Democracies Cooperate More and Fight Less: The Relationship Between International Trade and Cooperation. Review of International Economics 5 (3):295309.CrossRefGoogle Scholar
Pomfret, Richard. 1997. The Economics of Regional Trading Arrangements. New York: Oxford University Press.Google Scholar
Reuveny, Rafael, and Kang, Heejoon. 1996. International Conflict and Cooperation: Splicing COPDAB and WEIS Series. International Studies Quarterly 40 (2):281305.CrossRefGoogle Scholar
Rosecrance, Richard. 1986. The Rise of the Trading State: Commerce and Conquest in the Modern World. New York: Basic Books.Google Scholar
Russett, Bruce M. 1967. International Regions and the International System: A Study in Political Ecology. Chicago: Rand-McNally.Google Scholar
Russett, Bruce M. 1985. The Mysterious Case of Vanishing Hegemony; or, Is Mark Twain Really Dead? International Organization 39 (2):207–31.CrossRefGoogle Scholar
Russett, Bruce, Oneal, John R., and Davis, David R.. 1998. The Third Leg of the Kantian Tripod for Peace: International Organizations and Militarized Disputes, 1950–1985. International Organization 52 (3):441–67.CrossRefGoogle Scholar
Saxonhouse, Gary R. 1993. Trading Blocs and East Asia. In New Dimensions in Regional Integration, edited by de Melo, Jaime and Panagariya, Arvind, 388415. New York: Cambridge University Press.CrossRefGoogle Scholar
Schiff, Maurice, and Winters, L. Alan. 1998. Regional Integration as Diplomacy. The World Bank Economic Review 12 (2):271–95.CrossRefGoogle Scholar
Schmitter, Philippe C. 1969. Further Notes on Operationalizing Some Variables Related to Regional Integration. International Organization 23 (2):327–36.CrossRefGoogle Scholar
Singer, J. David, and Small, Melvin. 1968. Alliance Aggregation and the Onset of War, 1815–1945. In Quantitative International Politics: Insights and Evidence, edited by Singer, J. David, 247–86. New York: Free Press.Google Scholar
Singer, J. David, and Small, Melvin. 1993. National Material Capabilities Dataset. Study No. 9903. Ann Arbor, Mich.: Inter-University Consortium for Political and Social Research.Google Scholar
Singer, J. David, and Small, Melvin. 1994. Correlates of War Project: International and Civil War Data, 1816–1992. Study No. 9905. Ann Arbor, Mich.: Inter-University Consortium for Political and Social Research.Google Scholar
Singer, J. David, Bremer, Stuart, and Stuckey, John. 1972. Capability Distribution, Uncertainty, and Major Power War, 1820–1965. In Peace, War, and Numbers, edited by Russett, Bruce M., 1948. Beverly Hills, Calif.: Sage Publications.Google Scholar
Smith, Peter H. 1993. The Politics of Integration: Concepts and Themes. In The Challenge of Integration: Europe and the Americas, edited by Smith, Peter H., 114. New Brunswick, N.J.: Transaction Publishers.Google Scholar
Snitwongse, Kusuma. 1998. Thirty Years of ASEAN: Achievements Through Political Cooperation. Pacific Review 11 (2): 183–94.CrossRefGoogle Scholar
Stein, Arthur A. 1993. Governments, Economic Interdependence, and International Cooperation. In Behavior, Society, and Nuclear War, Vol. 3., edited by Tetlock, Philip E., Husbands, Jo L., Jervis, Robert, Stern, Paul C., and Tilly, Charles, 241324. New York: Oxford University Press.Google Scholar
Summers, Robert, and Heston, Alan. 1988. A New Set of International Comparisons of Real Product and Price Estimates for 130 Countries, 1950–1985. Review of Income and Wealth 34 (1):125.CrossRefGoogle Scholar
Summers, Robert, and Heston, Alan. 1991. The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950–1988. Quarterly Journal of Economics 106 (2):327–68.CrossRefGoogle Scholar
Wallace, William. 1994. Regional Integration: The Western European Experience. Washington, D.C.: Brookings Institution.Google Scholar
Waltz, Kenneth N. 1970. The Myth of National Interdependence. In The International Corporation, edited by Kindleberger, Charles P., 205–23. Cambridge, Mass.: MIT Press.Google Scholar
Whalley, John. 1998. Why Do Countries Seek Regional Trade Arrangements? In The Regionalization of the World Economy, edited by Frankel, Jeffrey A., 6383. Chicago: University of Chicago Press.Google Scholar
World Trade Organization (WTO). 1995. Regionalism and the World Trading System. Geneva: WTO.Google Scholar
Yarbrough, Beth V., and Yarbrough, Robert M.. 1992. Cooperation and Governance in International Trade: The Strategic Organizational Approach. Princeton, N.J.: Princeton University Press.CrossRefGoogle Scholar
Yarbrough, Beth V., and Yarbrough, Robert M.. 1997. Dispute Settlement in International Trade: Regionalism and Procedural Coordination. In The Political Economy of Regionalism, edited by Mansfield, Edward D. and Milner, Helen V., 134–63. New York: Columbia University Press.Google Scholar