Trade does promote peace

New simultaneous estimates of the reciprocal effects of trade and conflict

Bibliographic Data

ID3917295
AuthorsHåvard Hegre (0000-0002-5076-0994, Department of Political Science, University of Oslo Center for the Study of Civil War, Peace Research Institute Oslo (PRIO)), John R Oneal (Department of Political Science, The University of Alabama,, corresponding author), Bruce Russett (Yale University)
Year2010
Volume47
Issue6
Pages763-774
Publication date2010-11-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueJournal of Peace Research (JOURNAL)
Journal identifiersISSN: 0022-3433 • E-ISSN: 1460-3578
PublisherSAGE Publications Inc (PUBLISHER)
DOI10.1177/0022343310385995
OpenAlexW2106717208
LanguageEN
Citations received122
References cited84

Two studies question whether economic interdependence promotes peace, arguing that previous research has not adequately considered the endogeneity of trade. Using simultaneous equations to capture the reciprocal effects, they report that trade does not reduce conflict, though conflict reduces trade. These results are puzzling on logical grounds. Trade should make conflict less likely, ceteris paribus, if interstate violence adversely affects commerce; otherwise, national leaders are acting irrationally. In re-analyzing the authors' data, this article shows that trade does promote peace once the gravity model is incorporated into the analysis of conflict. Both trade and conflict are influenced by nations' sizes and the distance separating them, so these fundamental exogenous factors must be included in models of conflict as well as trade. One study errs in omitting distance when explaining militarized disputes. The other does not adequately control for the effect of size (or power). When these theoretically informed changes are made, the pacific benefit of trade again appears. In new simultaneous analyses, the article confirms that trade promotes peace and conflict contemporaneously reduces commerce, even with extensive controls for traders' rational expectations of violence. Previous studies that address the endogeneity of trade by controlling for the years of peace - as virtually all have done since 1999 - have not overstated the benefit of interdependence. Commerce promotes peace because violence has substantial costs, whether these are paid prospectively or contemporaneously

Ceteris paribus · Econometrics · Economic interdependence · Economics · Endogeneity · International conflict · International trade · Microeconomics · Political science · Politics · Reciprocal · Trade barrier · International Development and Aid · Law · Peacebuilding and International Security · Political Conflict and Governance

Tools

Open DOISci-Hub