Trade, Development, and Interstate Conflict

Open Access
Cibos, Deborah Leigh
Area of Honors:
Political Science
Bachelor of Arts
Document Type:
Thesis Supervisors:
  • Glenn Hunter Palmer, Thesis Supervisor
  • Michael Barth Berkman, Honors Advisor
  • economic development
  • trade
  • conflict
  • militarized interstate disputes
While the effects of trade on interstate conflict have been a source of constant debate, the interconnectivity of modern world markets is rarely measured in the context of economic development. The literature claims that economic development on the national level creates a trade-off between the opportunity and willingness to engage in conflict; while opportunity increases with development, a state becomes less willing to engage in conflict as prosperity increases. This study utilizes development’s non-linear relationship as a foundation for interaction. Through a logistical regression analysis of politically relevant, directed dyads from 1950-2000, I test the hypothesis that the interaction of economic development and bilateral trade reduces both the likelihood of conflict and the likelihood of an “intense” conflict involving fatalities. The results confirm that the interaction term is in fact negative and significant, despite the fact that trade has a positive effect on conflict. This study not only isolates the dynamics of the post-World War II era, but it qualifies the liberal, open-market paradigm within the framework of economic development. The findings of this study indicate that trade is most effective as a conflict-deterring policy at high levels of economic development.