Peace allows trade between nations to flourish

February 26th, 2010 - 3:21 pm ICT by ANI  

Washington, Feb 26 (ANI): American researchers have put forward a new theory according to which peace allows trade between nations to flourish while the same may not be true vice versa.

Omar Keshk and Brian Pollins from the Ohio State University and Rafael Reuveny from Indiana University investigated various assumptions behind trade and conflict models. Their study has appeared in the journal Conflict Management and Peace Science published by SAGE.

In their paper, Trade and Conflict: Proximity, Country Size, and Measures, the authors home in on four key issues: the nations’ size, proximity, the choice of trade data, and the definition of ‘conflict’ used by theorists. By using a simultaneous equations model, the authors proved claims that trade brings peace are not strong. In fact it is conflict that reduces trade.

The majority of trade and conflict studies define conflict to include all types of militarised interstate disputes (MIDs). But Keshk, Reuveny, and Pollins question the results generated when different conflict definitions are chosen. For instance, a conflict such as a threat to use nuclear weapons would not cause fatalities, but may still have some impact on trade and vice versa. In fact, by altering the data treatment and assumptions in the equation, the authors generated a variety of results, which supported several different theoretical viewpoints.

According to the authors: “Any signal that trade brings peace remains weak and inconsistent, regardless of the way proximity is modelled in the conflict equation. The signal that conflict reduces trade, in contrast, is strong and consistent.

“Any study of the effect of trade on conflict that ignores the reverse fact is practically guaranteed to produce estimates that contain simultaneity bias.”

The authors add: “To our colleagues from the liberal camp we would like to say that we still believe there are limited circumstances in which more trade may help lead countries to more peaceful resolutions of their differences, particularly if they are already at peace.

“However, it is past time for academics and policymakers to look beyond the naive claim that the cultivation of trade ties will always and everywhere produce a more peaceful world.” (ANI)

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