Trade and Militarized Conflict: How Modeling Strategic Interactions Between States Makes a Difference
Rowan, Shawn E.
The study between the interaction of war and foreign trade has occupied scholars from political science and economics for thousands of years. I contribute to the trade and conflict debate by accounting for the strategic interaction between states that most or all theories in international relations (IR) assume. I use a strategic statistical model (Signorino 1999, 2003b) that endogenizes the actions that leads states to militarized conflict and peace. The results of the strategic probit model reveal non-linear, asymmetric relationships between trade dependence and militarized conflict for each state in the dyad. Not only are these effects non-linear, but, in equilibrium, also depend on the actions taken by the other state in the dyad. The trade dependence of one state on another can have either a pacifying or a positive effect on militarized conflict. Additionally, these effects are only realized for initial increases in trade dependence and that once a threshold is reached, the effects of trade dependence are constant.
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