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Economic Interdependence and Third-Party International Interactions: A 30-Country Third-Party Bloc Case Study

Published online by Cambridge University Press:  01 April 2008

YUAN-CHING CHANG
YUAN-CHING CHANG*
Affiliation:
Department of Economics, Chinese Culture University, Hwa Kang, Yang Ming Shan, Taipei 111, Taiwan (ROC)ycchang@faculty.pccu.edu.tw
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Abstract

The trade–conflict model claims that one state, designated ‘actor’, is deterred from initiating conflict against a trading partner, designated ‘target’, for fear of losing the welfare gains associated with trade. This paper extends the trade–conflict model to garner implications concerning trade and conflict interactions where third-party blocs are involved. The theoretical propositions supported by proofs are: (1) if the actor increases trade with a third-party who is a friend of the target, then the actor will decrease conflict toward the target; (2) if the actor increases trade with a third-party who is a rival of the target, then the actor will increase conflict toward the target. A 30-country sample from the Conflict and Peace Data Bank (COPDAB) is used and divided into three blocs, namely a Western bloc, a Middle Eastern bloc, and an Eastern bloc. The empirical analysis supports the hypotheses. A similar relationship is also discussed and tested for situations in which conflict increases or decreases between the actor and third-party bloc. In addition, the evidence shows that Western bloc countries play a central role in world political and economic relationships.

Type
Research Article
Information
Japanese Journal of Political Science , Volume 9 , Issue 1 , April 2008 , pp. 63 - 87
Copyright
Copyright © Cambridge University Press 2008

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