Hostname: page-component-cd9895bd7-gxg78 Total loading time: 0 Render date: 2024-12-25T09:49:10.224Z Has data issue: false hasContentIssue false
  • English
  • Français

Investing in the Peace: Economic Interdependence and International Conflict

Published online by Cambridge University Press:  09 July 2003

Erik Gartzke ,
Quan Li  and
Charles Boehmer
Get access

Extract

Research appears to substantiate the liberal conviction that trade fosters global peace. Still, existing understanding of linkages between conflict 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 conflict behavior is implausible in light of new analytical insights about the causes of war. We discuss, and then demonstrate formally, how interdependence can influence 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.

Type
Articles
Information
International Organization , Volume 55 , Issue 2 , Spring 2001 , pp. 391 - 438
Copyright
Copyright © The IO Foundation 2001

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

Andrews, David M. 1994. Capital Mobility and State Autonomy: Toward a Structural Theory of International Monetary Relations. International Studies Quarterly 38 (2):193–218.CrossRefGoogle Scholar
Babst, Dean V. 1972. A Force for Peace. Industrial Research 14 (April):55–58.Google Scholar
Banks, Jeffrey S. 1990. Equilibrium Behavior in Crisis Bargaining Games. American Journal of Political Science 34 (3):599–614.CrossRefGoogle Scholar
Barbieri, Katherine. 1996. Economic Interdependence: A Path to Peace or a Source of International Conflict? Journal of Peace Research 33 (1):29–49.CrossRefGoogle Scholar
Barbieri, Katherine, and Levy, Jack S.. 1999. Sleeping with the Enemy: The Impact of War on Trade. Journal of Peace Research 36 (4):463–79.CrossRefGoogle Scholar
Barbieri, Katherine, and Schneider, Gerald. 1999. Globalization and Peace: Assessing New Directions in the Study of Trade and Conflict. Journal of Peace Research 36 (4):387–404.CrossRefGoogle 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
Benoit, Kenneth. 1996. Democracies Really Are More Pacific (in General): Reexamining Regime Type and War Involvement. Journal of Conflict Resolution 40 (4):636–57.CrossRefGoogle Scholar
Blainey, Geoffrey. 1973. The Causes of War. New York: Free Press.CrossRefGoogle Scholar
Bremer, Stuart A. 1992. Dangerous Dyads: Conditions Affecting the Likelihood of Interstate War, 1816–1965. Journal of Conflict Resolution 36 (2):309–41.CrossRefGoogle Scholar
Bremer, Stuart A. 1993. Democracy and Militarized Interstate Conflict, 1816–1965. International Interactions 18 (3):231–49.CrossRefGoogle Scholar
Bueno de Mesquita, Bruce. 1981. The War Trap. New Haven, Conn.: Yale University Press.Google Scholar
Bueno de Mesquita, Bruce. 1990. Pride of Place: The Origins of German Hegemony. World Politics 43 (1):28–52.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
Caporaso, James A. 1978. Dependence, Dependency, and Power in the Global System: A Structural and Behavioral Analysis. International Organization 32 (1):13–43.CrossRefGoogle Scholar
Chan, Steve. 1984. Mirror, Mirror on the Wall … Are the Freer Countries More Pacific? Journal of Conflict Resolution 28 (4):617–48.CrossRefGoogle Scholar
Cohen, Benjamin J. 1998. The Geography of Money. Ithaca, N.Y.: Cornell University Press.Google Scholar
Deutsch, Karl W. 1978. The Analysis of International Relations. 2d ed. Englewood Cliffs, N.J.: Prentice-Hall.Google Scholar
Dixon, William J. 1993. Democracy and the Management of International Conflict. Journal of Conflict Resolution 37 (1):42–68.CrossRefGoogle Scholar
Dixon, William J. 1994. Democracy and the Peaceful Settlement of International Conflict. American Political Science Review 88 (1):14–32.CrossRefGoogle Scholar
Dorussen, Han. 1999. Balance of Power Revisited: A Multi-Country Model of Trade and Conflict. Journal of Peace Research 36 (4):443–62.CrossRefGoogle Scholar
Eichengreen, Barry. 1996. Globalizing Capital. Princeton, N.J.: Princeton University Press.Google Scholar
Fearon, James D. 1994. Domestic Political Audiences and the Escalation of International Disputes. American Political Science Review 88 (3):577–92.CrossRefGoogle Scholar
Fearon, James D. 1995. Rationalist Explanations for War. International Organization 49 (3):379–414.CrossRefGoogle Scholar
Frieden, Jeffry. 1991. Invested Interests: The Politics of National Economic Policies in a World of Global Finance. International Organization 45 (4):425–51.CrossRefGoogle 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):1–27.CrossRefGoogle Scholar
Gartzke, Erik. 1999. War Is in the Error Term. International Organization 53 (3):567–87.CrossRefGoogle Scholar
Gartzke, Erik. 2000. Preferences and the Democratic Peace. International Studies Quarterly 44 (2):191–210.CrossRefGoogle Scholar
Gartzke, Erik, and Jo, Dong-Joon. 2000. Tipping the Scale: Signaling and the Democratic Peace. Unpublished manuscript, Pennsylvania State University.Google Scholar
Gasiorowski, Mark J. 1986. Economic Interdependence and International Conflict: Some Cross-National Evidence. International Studies Quarterly 30 (1):23–38.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: Procedure, Patterns, and Insights. Journal of Conflict Resolution 28 (4):585–616.CrossRefGoogle Scholar
Goodman, John B., and Pauly, Louis W.. 1993. The Obsolescence of Capital Controls? Economic Management in an Age of Global Markets. World Politics 46 (1):50–82.CrossRefGoogle Scholar
Gowa, Joanne, and Mansfield, Edward D.. 1993. Power Politics and International Trade. American Political Science Review 87 (2):408–21.CrossRefGoogle Scholar
Green, Donald P., Kim, Soo Yeon, and Yoon, David. 2001. Dirty Pool. International Organization 55 (2):441–68.CrossRefGoogle Scholar
Grilli, Vittorio, and Milesi-Ferretti, Gian Maria. 1995. Economic Effects and Structural Determinants of Capital Controls. IMF Staff Papers 42 (3):517–51.CrossRefGoogle Scholar
Hamada, Koichi. 1976. A Strategic Analysis of Monetary Interdependence. Journal of Political Economy 84 (4):677–700.CrossRefGoogle Scholar
Hirschman, Albert O. 1977. The Passions and the Interests: Political Arguments for Capitalism Before Its Triumph. Princeton, N.J.: Princeton University Press.CrossRefGoogle Scholar
International Monetary Fund. Various years. Annual Report on Exchange Arrangements and Exchange Restrictions. Washington, D.C.: IMF.Google Scholar
International Monetary Fund. 1993. Direction of Trade. ICPSR 7628. Washington, D.C.: IMF. Distributed by Interuniversity Consortium for Political and Social Research, Ann Arbor, Mich.Google Scholar
International Monetary Fund. Various years. International Financial Statistics Yearbook. Washington, D.C.: IMF.Google 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
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):163–213.CrossRefGoogle Scholar
Kant, Immanuel. [1795] 1957. Perpetual Peace. Reprint, New York: The Liberal Arts Press.Google Scholar
Keohane, Robert, and Nye, Joseph S. Jr 1989. Power and Interdependence. 2d ed. Glenview, Ill.: Scott, Foresman.Google Scholar
Kirshner, Jonathan. 1995. Currency and Coercion: The Political Economy of International Monetary Power. Princeton, N.J.: Princeton University Press.CrossRefGoogle Scholar
Kroll, John A. 1993. The Complexity of Interdependence. International Studies Quarterly 37 (3):321–48.CrossRefGoogle Scholar
Leblang, David A. 1997. Domestic and Systemic Determinants of Capital Controls in the Developed and Developing World. International Studies Quarterly 41 (3):455–74.CrossRefGoogle Scholar
Mansfield, Edward D., and Bronson, Rachel. 1997. Alliances, Preferential Trading Arrangements, and International Trade. American Political Science Review 91 (1):94–106.CrossRefGoogle Scholar
Maoz, Zeev. 1999. Dyadic Militarized Interstate Disputes (DYMID 1.0) Data Set. Available at <http://spirit.tau.ac.il/~zeevmaoz/>..>Google Scholar
Maoz, Zeev, and Russett, Bruce. 1993. Normative and Structural Causes of Democratic Peace, 1946–1986. American Political Science Review 87 (3):624–38.CrossRefGoogle Scholar
McMillan, Susan M. 1997. Interdependence and Conflict. Mershon International Studies Review 41 (1):33–58.CrossRefGoogle Scholar
Montesquieu, Baron de. [1748] 1989. Spirit of the Laws. Reprint, Cambridge: Cambridge University Press.Google Scholar
Morgan, T. Clifton, and Campbell, Sally Howard. 1991. Domestic Structure, Decisional Constraints, and War: So Why Kant Democracies Fight? Journal of Conflict Resolution 35 (2): 187–211.CrossRefGoogle Scholar
Morrow, James D. 1999. How Could Trade Affect Conflict? Journal of Peace Research 36 (4):481–89.CrossRefGoogle Scholar
Morse, Edward L. 1976. Modernization and the Transformation of International Relations. New York: Free Press.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):267–93.CrossRefGoogle Scholar
Oneal, John R., and Russett, Bruce M. 1999a. Assessing the Liberal Peace with Alternative Specifications: Trade Still Reduces Conflict. Journal of Peace Research 36 (4):423–42.CrossRefGoogle Scholar
Oneal, John R., and Russett, Bruce M. 1999b. Is the Liberal Peace Just an Artifact of Cold War Interests? Assessing Recent Critiques. International Interactions 25 (3):213–41.CrossRefGoogle Scholar
Oneal, John R., Oneal, Frances H., Maoz, Zeev, and Russett, Bruce. 1996. The Liberal Peace: Interdependence, Democracy, and International Conflict, 1950–1985. Journal of Peace Research 33 (1):11–28.CrossRefGoogle Scholar
Papayoanou, Paul A. 1999. Power Ties: Economic Interdependence, Balancing, and War. Ann Arbor: University of Michigan Press.CrossRefGoogle Scholar
Polachek, Solomon W. 1980. Conflict and Trade. Journal of Conflict Resolution 24 (1):55–78.CrossRefGoogle Scholar
Polachek, Solomon W., Robst, John, and Chang, Yuan-Ching. 1999. Liberalism and Interdependence: Extending the Trade-Conflict Model. Journal of Peace Research 36 (4):405–22.CrossRefGoogle Scholar
Pollins, Brian M. 1989. Does Trade Still Follow the Flag? American Political Science Review 83 (2):465–80.CrossRefGoogle Scholar
Ray, James Lee. 1997. On the Level(s): Does Democracy Correlate with Peace? Unpublished manuscript, Vanderbilt University.Google Scholar
Rosenau, James M. 1984. A Pre-Theory Revisited: World Politics in an Era of Cascading Interdependence. International Studies Quarterly 28 (3):245–305.CrossRefGoogle Scholar
Rousseau, David L., Gelpi, Christopher, Reiter, Dan, and Huth, Paul K.. 1996. Assessing the Dyadic Nature of the Democratic Peace, 1918–88. American Political Science Review 90 (3):512–33.CrossRefGoogle Scholar
Rummel, Rudolph J. 1997. Power Kills: Democracy as a Method of Nonviolence. New Brunswick, N.J.: Transaction Publishers.Google Scholar
Russett, Bruce. 1993. Grasping the Democratic Peace: Principles for a Post–Cold War World. Princeton, N.J.: Princeton University Press.Google 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
Sartori, Anne. 1996. The Use of Effective Cheap-Talk Signals in International Disputes. Unpublished manuscript, University of Michigan.Google Scholar
Schelling, Thomas C. 1960. The Strategy of Conflict. Cambridge, Mass.: Harvard University Press.Google Scholar
Schelling, Thomas C. 1966. Arms and Influence. New Haven, Conn.: Yale University Press.Google Scholar
Schultz, Kenneth A. 1998. Domestic Opposition and Signaling in International Crises. American Political Science Review 92 (4):829–44.CrossRefGoogle Scholar
Schultz, Kenneth A. 1999. Do Domestic Institutions Constrain or Inform? Contrasting Two Institutional Perspectives on Democracy and War. International Organization 53 (2):233–66.CrossRefGoogle Scholar
Simmons, Beth A. 1994. Who Adjusts? Domestic Sources of Foreign Economic Policy During the Interwar Years. Princeton, N.J.: Princeton University Press.CrossRefGoogle 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., 19–48. Beverly Hills, Calif.: Sage.Google Scholar
Smith, Alastair. 1998. International Crises and Domestic Politics. American Political Science Review 92 (3):623–38.CrossRefGoogle Scholar
Solingen, Etel. 1998. Regional Orders at Century's Dawn: Global and Domestic Influences on Grand Strategy. Princeton, N.J.: Princeton University Press.Google 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):327–69.CrossRefGoogle Scholar
Suzuki, Motoshi. 1994. Economic Interdependence, Relative Gains, and International Cooperation: The Case of Monetary Policy Coordination. International Studies Quarterly 38 (3):475–98.CrossRefGoogle Scholar
Tetreault, Mary Ann. 1980. Measuring Interdependence. International Organization 34 (3):429–43.CrossRefGoogle Scholar
Wagner, R. Harrison. 2000. Bargaining and War. American Journal of Political Science 44 (3):469–84.CrossRefGoogle Scholar
Weede, Erich. 1984. Democracy and War Involvement. Journal of Conflict Resolution 28 (4):649–64.CrossRefGoogle Scholar
World Bank. 1998. The 1998 World Development Indicators CD-ROM. Washington, D.C.: World Bank.Google Scholar