Trade, Size Asymmetry, and Militarized Conflict

Conference paper

Hegre, Håvard (2001) Trade, Size Asymmetry, and Militarized Conflict, presented at The 97th Annual Meeting of the American Political Science Association, 30 August.

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This article investigates the claim that symmetrical dependence on trade between two states is required for the trade bond to reduce the probability of interstate conflict. Since the degree of symmetry in a trade relationship is closely related to the degree of symmetry in in the military power of the two states, it is necessary to study the two types of symmetry simultaneously. The relationship between the two is explored in a formal model of trade and conflict based on Dorussen (1999). For the particular
thinspace pacifying mechanisms of trade studied here, the model supports the view that trade most efficiently reduces the incentives for conflict in relatively symmetric dyads. The model also indicates that the most commonly used indicator of (trade) interdependence, the trade-to-GDP ratio, is dependent on the degree of asymmetry in size. The implication of this is that the results of studies using this indicator to some extent is contaminated by realist variables as power preponderance. The hypotheses derived from the theoretical model are largely supported in a statistical analysis of directed dyads in the 1950-92 period.

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