Micro-foundations of the commercial peace: The effect of net exports on Ukrainian attitudes towards war with Russia

Abstract

Most studies of the ‘commercial peace’ hypothesis – that trade increases the opportunity costs of war, making it less likely – assume the state has a unified interest with respect to trade. However, it is well-established that trade creates economic winners and losers within a country. Loss of export markets due to conflict imposes significant costs on local economies, but disruption of imports is often less costly, and potentially even beneficial. We posit that opposition to conflict should correlate with subnational variation in the degree to which trade represents benefits or losses for groups and individuals within the polity. Examining public opinion data from Ukraine in 2014–15, early in its long-term conflict with Russia, we disaggregate by province and find that, the greater the importance of regional net exports to Russia, the less likely citizens are to support fighting against Russia and the more they are willing to accept costly compromises to end the conflict. We demonstrate the robustness of these findings using two separate surveys.