Not All Peace Years Are Created Equal: Trade, Imposed Settlements, and Recurrent Conflict

The peace through trade hypothesis receives extensive support from a large empirical literature. However, extant research does not isolate whether this relationship holds for states that have fought in the past, or whether its influence following armed disputes is dependent upon the ways in which states settle their conflicts. Additionally, although recent research finds that imposed settlements are more pacifying than other forms of political settlement, these studies tend not to isolate factors associated with variation in the stability of imposed settlements. In this article, we examine how settlements condition the influence of trade on conflict recurrence, both to overcome a limitation in extant studies of trade and conflict, which tend to ignore the way states settle prior disputes, and to further an understanding of how post-conflict state interaction varies by (and within) settlement type. Looking at dyadic trade and recurrent conflict from 1885 to 2000, we find that imposed settlements foster a pacifying effect of trade, while negotiated settlements and failures to reach settlement lead to relationships in which trade has crosscutting effects on the stability of peace, resulting in an overall null effect of trade on conflict recurrence.