Economic Interdependence, Polity Type, Conflict and Peace: When Does Interdependence Cause Peace and Cause War?

Abstract

Competing IR paradigms have long debated the relationship between trade and conflict. Some view trade as causing interstate conflict whereas others see it as pacifying interstate relations. To address this ongoing scholarly debate, this study proposes an interactive relationship of interdependence and polity type in affecting peace. I argue that trade interdependence differently affects interstate relations between democracies and autocracies: interdependence causes conflict for autocracies while causing peace for democracies. This interactive hypothesis is tested against the directed-dyad sample of 1950-2001 for which all the relevant data are jointly available. My probit analysis reveals that interdependence increases the probability of conflict initiation for autocratic challengers but decreases it for democratic challengers.