The complex structure of commercial peace contrasting trade interdependence, asymmetry, and multipolarity
| DOI | 10.1177/0022343316637895 |
| Author | Oliver Westerwinter,Erik Gartzke |
| Published date | 01 May 2016 |
| Date | 01 May 2016 |
| Subject Matter | Research Articles |
The complex structure of commercial peace
contrasting trade interdependence,
asymmetry, and multipolarity
Erik Gartzke
Department of Political Science, University of California, San Diego
Oliver Westerwinter
Department of Political Science, University of St Gallen
Abstract
Researchers continue to debate the impact of trade on interstate conflict. While many view trade as pacifying, others
argue that dependencies increase friction and the risk of war. We provide a theory that explains how cross-border
economic ties alternately enhance or impede international cooperation. Three main factors account for the hetero-
geneous effects of trade on conflict: interdependence, asymmetry, and multipolarity. Interdependence can act as a
substitute for, or as a deterrent to, militarized violence. In the former case, interdependence actually increases more
modest non-militarized conflict, while also discouraging militarized disputes. Asymmetry diminishes the conflict-
inhibiting effect of trade ties, as dependency cannot simultaneously be used to coerce and to inform. Multilateral
trade networks alternately moderate or enhance the bilateral effects of interdependence and asymmetry on interstate
peace. Our theory and evidence reveal complex, cross-cutting consequences of economic interdependence on conflict
behavior and also demonstrate effects well beyond the dyad, suggesting the need to include extradyadic ties in future
theoretical and empirical research studying the commercial peace.
Keywords
asymmetry, interstate conflict, multipolarity, networks, trade interdependence
Introduction
Research on the relationship between trade and con-
flict is both durable and dialectical, with optimists
(Montesquieu, 1989; Cobden, 1903; Angell, 1909;
Rosecrance, 1985) and a more heterogeneous group
of pessimists (Thucydides, 1985; Lenin, 1975; Carr,
1939; Waltz, 1999). Liberal theory emphasizes
the pacific effects of commerce on world politics
(Oneal & Russett, 1997; Polachek, 1997; Pevehouse,
2004). A more diverse tradition argues that trade
dependencies actually exacerbate cross-border tensions
(Krasner, 1976; Waltz, 1979; Grieco, 1988; Gasior-
owski, 1986). Despite sustained interest and effort,
it has proven difficult to resolve this dialectic empiri-
cally. While the balance of evidence favors the com-
mercial peace, results are often weak or attenuated
(Barbieri & Schneider, 1999; Mansfield & Pollins,
2001, 2003; Schneider, 2014).
Why has evidence for the commercial peace remained
relatively weak? We argue that this ambiguity stems from
the fact that trade ties generate not one relationship, but
several. Trade may affect states’ decisions to fight by
shaping the opportunity costs that nations face in going
to war (Russett & Oneal, 2001; Polachek, 1980; Pola-
chek & Jun, 2010). Trade relationships could also serve
as a means to signal resolve to adversaries in disputes over
issues about which states continue to care (Gartzke, Li &
Boehmer, 2001; Gartzke, 2007; Morrow, 1999). Some
aspects of trade could discourage warfare, while other
Corresponding author:
oliver.westerwinter@unisg.ch
Journal of Peace Research
2016, Vol. 53(3) 325–343
ªThe Author(s) 2016
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DOI: 10.1177/0022343316637895
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aspects appear more likely to facilitate, or even encour-
age, interstate conflict. Distinguishing among disparate
consequences of commerce on conflict is critical for
improved theory and for proper assessment of these
empirical relationships.
Conflict occurs because states possess incompatible
interests, and because adversaries are unwilling or
unable to resolve differences nonviolently (Fearon,
1995). The prospect of trade losses can discourage con-
flict where the risk posed to commerce from fighting is
large relative to the value of the stakes in a dispute. To
deter conflict, trade partners must prefer the status quo
to making, or resisting, demands for change. However,
militarized conflicts tend already to be costly; additional
incremental burdens due to trade are unlikely to signif-
icantly alter states’ calculations of risk and return. If the
cost of fighting varies with the intensity of a dispute,
then the deterrent effect of commercial ties should do
more to alter the intensity of contests than their
propensity.
While trade can deter, it can also inform. Trade ties
provide a novel mechanism allowing states to act out
their differences through non-militarized conflict.
Indeed, trade can substitute for force; trading relation-
ships need only be valuable to both sides in a dyad. To
the degree that interdependence mimics key attributes of
militarized contests, it can supplant more deadly or risky
disputes. However, interdependence does not necessarily
imply the end of disagreement among states. Tensions
may persist and while they are less likely to produce
casualties, trading partners may actually increase inci-
dents of low-intensity non-militarized conflict (Gartzke,
2003).
Asymmetric trade relationships undermine the pacific
effects of commerce by decoupling the dual functions of
conflict (Hirschman, 1945; Keohane & Nye, 1977).
The less dependent partner in an asymmetric trade rela-
tionship can coerce, but this actor does not incur a sig-
nificant cost for doing so. Coercing cheaply is not
informative and so adversaries must find some way to
impose costs on a less dependent adversary in order to
test resolve. The more dependent state in an asymmetric
trade relationship can demonstrate resolve, but it derives
little benefit from doing so, given that the less dependent
state cannot be coerced through the exercise of the trade
mechanism.
These tendencies actually reverse themselves to some
degree with increasing extradyadic trade ties. Multilat-
eral asymmetric trade networks – that is, situations in
whichstateshaveasymmetrictradetiestomorethan
one state – should be less conflict prone than isolated
asymmetric trade relationships. Increasing extradyadic
trade ties means that both states in an asymmetric net-
work are able to substitute away from a given dyadic
dependency. For the dependent state, a network of
dependent relationships tends to undermine the coer-
cive leverage of the less dependent state and thus limits
the need to escalate conflict within the dyad to resist
coercion. Similarly, for the less dependent partner in an
asymmetric trade dyad, increasing the number of asym-
metric ties creates more opportunities for coercion,
marginally lowering the utility of coercing any particu-
lar partner.
The complex contrasting tendencies of trade networks
continue for symmetric (interdependent) dyads. Increas-
ing the number of a state’s symmetric trade ties again
leads to the opportunity for substitution, but this time
the effect is to decrease the decrease in conflict associated
with bilateral interdependence. Symmetric trade net-
works reduce the constraining effect of interdependence
on conflict and can also limit the informational value of
competition through commercial ties. In short, extradya-
dic trade ties are likely to shape the way that dyadic
dependence and interdependence affect interstate con-
flict, something that scholars have only recently begun to
assess systematically (Crescenzi, 2005; Martin, Mayer &
Thoenig, 2008; Dorussen & Ward, 2010; Kinne, 2012,
2014b).
This study begins the process of evaluating these
admittedly complex and countervailing tendencies.
Complexity is increased by our decision to address trade
and conflict from an explicitly networked perspective.
Bringing economic networks into the analysis of trade
and conflict is essential in unraveling the multiple cau-
sal pathways through which commerce operates on war
and peace. By doing so, we are better able to explain
previous empirical riddles and to provide a larger, more
comprehensive theoretical framework for assessing the
commercial peace. Our analysis also serves as an illus-
tration of how network theory and measures can be
applied to enrich existing theoretical arguments and
empirical models in the study of international conflict.
In doing so, we add to a growing literature on networks
in international relations that has begun to show how
the accumulation of ties among nations affect a broad
range of international outcomes (Maoz, 2011;
Dorussen & Ward, 2008; Ward & Dorussen, 2016;
Hafner-Burton & Montgomery, 2008; Hegre, Oneal
& Russett, 2010; Lupu & Poast, 2016; Wilson, Davis
& Murdie, 2016; Chyzh, 2016).
The main conclusion of our analysis is that extradya-
dic trade ties tend to reduce the effects of dyadic trade
326 journal of PEACE RESEARCH 53(3)
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