Economic Interdependence and International Conflict: Some Cross-National Evidence

Abstract

This study examines the relationship between economic interdependence and international conflict. Two schools of thought exist on this issue: some prominent writers suggest that interdependence produces greater international conflict, while others suggest that it produces a decline in conflict. These arguments are reviewed and empirically tested here. Previous empirical studies bearing on this issue are found to use inadequate measures and biased samples. More comprehensive analyses presented here suggest that interdependence can have mixed consequences. Several measures of interdependence that embody its costly aspects are found to be positively associated with conflict, implying that interdependence produces increased international conflict. However, when these measures are controlled for, another key measure is found to be inversely related to conflict. This suggests that both schools of thought may be correct: while the costly aspects of interdependence seem to produce greater international conflict, its beneficial aspects appear to produce a decline in conflict. In recent years, international interdependence has emerged as an important phenomenon in world poiitics and a popular concept in the international relations literature. International issues as diverse as trade embargoes, environmental degradation, nuclear arms races, and the transmission of inflation have been grouped together under the rubric of interdependence. Early writers on interdependence, such as Cooper (1968), focused mainly on the problems it creates for domestic and foreign economic policymaking. More recently, a number of studies have appeared that examine the implications of interdependence for international politics. The most influential of these has been Keohane and Nye (1977). However, other than a few studies that examine whether interdependence is increasing or declining worldwide, I no broad, comparative analyses of the impact of interdependence on international politics