International Trade and Conflict

This chapter surveys the empirical literature on the effects of foreign trade on political-military conflict. There have been three “waves” of work on this topic since 1980. It is argued that the most recent wave differs from earlier waves in various important respects. First, it has made significant headway in addressing the causal mechanisms underlying the relationship between trade and conflict. Second, this wave has addressed a wider variety of aspects of trade, including trade policy and trade agreements. Third, a variety of recent studies have shed new light on the effects of trade on the outbreak of war, as well as the effects of war on the trade ties of combatants. Finally, the third wave of research on trade and conflict has addressed whether the effects of trade stem from market capitalism more generally and whether a simultaneous relationship exists between trade and conflict.