Trade and Peace

Abstract

theoretical innovations, the empirical findings and problems, and the most promising methodological tools for moving the frontiers of knowledge in this area forward over the next several years. One central research question that emerges from the existing literature is the strength and causal nature of the relationship between international commerce and conflict. John Oneal's contribution to the book provides new estimates, updating earlier studies by himself and Bruce Russett (Oneal and Russett 1999; Russett and Oneal 2001) with new trade and GDP (gross domestic product) data compiled by Kristian Gleditsch (2002), and using statistical techniques that control for temporal dependence in time series data. Oneal continues to find a significant and strong relationship between trade and peace. By contrast, other contributors find that the trade-peace relationship is a contingent one. Christopher Gelpi and Joseph Grieco, for example, provide new empirical findings that the trade-peace relationship is stronger for jointly democratic pairs of states than for other dyads, and in fact that the relationship is inverted for pairs of autocracies. Mansfield's chapter summarizes his collaborative work with Jon Pevehouse and David Bearce on the pacifying effects of preferential trading arrangements. They find a strong association between trade and peace among states that are members of common trading arrangements, but relatively little association for states that are not. Both these chapters offer well thought-out theoretical explanations for these effects. Several chapters address the recent bargaining theory critique of the standard liberal-trade-causes-peace argument (Morrow 1999; Gartzke, Li, and Boehmer 2001). Strategic bargaining theory sees war as a consequence of asymmetric information about states' interests and capabilities rather than as a result of the costliness of war itself. Accordingly, economic interdependence should affect the likelihood of conflict not by raising the costs of war, as the conventional liberal argument holds, but by promoting transparency and facilitating costly signaling. Erik Gartzke hypothesizes that the reaction of free capital markets to looming conflict with trading partners provides a credible signal to foreign audiences about their own state's bargaining resolve. James Morrow suggests using events data to look for evidence of signaling through the use of trade sanctions--for example, are certain patterns of trade disputes more common for highly interdependent states than for states with lower levels of trade? Arthur Stein's contribution, on the other