Foreign direct investment and third-party diplomatic intervention in intrastate conflict

Abstract

ABSTRACT Studies have shown the conditions under which peaceful resolutions to armed conflicts occur. Researchers have considered foreign actors’ role in assuring peace through peacekeeping, peace enforcement and other forms of intervention in civil wars. Intervention could be diplomatic, including non-coercive tools such as offers to mediate conflicts and setting up peace conferences by international actors. What factors increase the likelihood of these forms of intervention? In considering diplomatic interventions, this paper examines the role of investment interests in the probability that third parties will intervene diplomatically. Based on the incentives or bias towards peace that foreign investments may create, I argue that states with high amounts of foreign investment are more likely to be targeted for third-party diplomatic intervention. To test this argument, I use data on internal armed conflicts from 1980 to 1999. Countries that host high amounts of foreign direct investments are more likely to experience diplomatic interventions. Given the growing economic interdependence, this is an important finding on globalization’s impact on peace processes.