Trade Interdependence and the Issues at Stake in the Onset of Militarized Conflict

This article explores a boundary condition surrounding the effect of trade interdependence on the onset of interstate conflict. In particular, we focus on the types of conflict experienced by states, including territory, policy, and regime conflicts. We draw on the MID 3.1 and Oneal and Russett’s data to build three multinomial logit models to examine how trade interdependence affects territorial, policy, and regime types of conflict between 1885 and 2000. We find that trade interdependence significantly decreases the onset of all three types of conflict. This result largely holds across three different measures of trade interdependence. Moreover, we discover that the pacific effect of trade interdependence on the three types of conflict displays different patterns. Trade interdependence at the moderate and middle levels plays a marginal role in pacifying territorial and policy conflict. This effect becomes quite strong between states with high levels of interdependence. For policy conflicts, the threshold for this strong dampening effect is even higher. Finally, trade interdependence exerts a more consistent pacific impact upon regime conflict.