The Liberal Illusion: Does Trade Promote Peace?

Chapter 4. Interdependence, Negotiation, and Escalation

Chapter 4 interdependence, negotiation, and escalation The empirical evidence presented in chapter 3 suggests that interdependent dyads are more likely than others to engage in militarized disputes. Does this mean that liberal assumptions about trade’s pacifying and unifying power are completely unfounded? We know that trade ties fail to prevent the outbreak of militarized con›icts, but the question remains whether the con›icts that arise between interdependent states are less severe than those found in relationships where the bonds created by trade ties are absent. This question has drawn little attention, since the focus of previous work has been on trade’s impact on the occurrence of con›ict. However, there are good reasons to expect that interdependence might affect other stages of the con›ict process. Interdependence may have an impact on the resolution or the escalation of con›ict that is different from its impact on the occurrence of con›ict. In this chapter, I explore the impact that interdependence has on the characteristics of dyadic con›ict. theoretical background The logic of liberalism may be extended to the evolution of disputes. Both the economic incentives to refrain from con›ict and the positive sociological bonds between trading partners that liberals attribute to trade should also have an effect beyond the outbreak of con›ict. Vuchinich and Teachman (1993) present a framework for evaluating the utility of con›ict beyond its initiation stage; their framework is useful to consider within the context of interdependent relationships. They argue that as a con›ict unfolds, leaders persist in assessing the utility of continuing the con›ict and bring it to an end when costs outweigh bene‹ts. Polachek’s (1980) expected-utility model of the trade-con›ict relationship can also be extended to dispute evolution. As discussed previously, Polachek argues that leaders are deterred from initiating con›ict against important trading partners for fear of losing the welfare gains associated with trade. Considering the evidence presented in chapter 3, one might conclude that the anticipation of losses does not create a suf‹cient deter79 rent to con›ict initiation. Yet, the actual realization of these trade-related losses may prove to have a strong in›uence on decisions to terminate con›icts rapidly and to prevent them from escalating. Thus, among the costs of continuing a con›ict, a leader might consider the mounting economic hardships associated with harming an important trading relationship and thus be motivated to bring the con›ict to an end. Barbieri and Bremer (1998) provide evidence that dyads with high levels of trade experience shorter disputes than dyads with less extensive trade ties. In addition to the economic incentives hypothesized to motivate leaders to terminate con›icts before they escalate, liberals suggest that interdependent actors have an enhanced ability to settle con›icts nonviolently and that extensive linkages (including but not limited to trade) facilitate the creation of mechanisms conducive for achieving the peaceful resolution of con›icts. This should prevent interdependent states from engaging in any form of con›ict. Yet, we know that such con›icts occur. Still, if liberal predictions about trade’s pacifying power are at all correct, I would expect that at a minimum interdependent dyads should be better able than other dyads to negotiate a settlement to con›icts that break out and to prevent them from escalating. Disputes among interdependent dyads should be less intense than those experienced in other relationships. The question remains, are con›icts between interdependent dyads really less intense than those found in other relationships? Psychological and sociological theories offer con›icting interpretations about the nature of con›ict in interdependent relationships. The expansion of social bonds may at times facilitate con›ict resolution (Rubin, Pruitt, and Kim 1994). On the other hand, there is evidence that when con›icts do arise between interdependent actors they may be more intense than those found in other relationships. In thinking about why this might be the case, we can consider alternative forms of relationships in which actors have much in common, experience high levels of interaction, and are intimately connected by a web of linkages. As discussed earlier, civil wars and family and marital violence illuminate the potential for intense con›ict in interdependent relations. While primarily concerned with interpersonal relations, the expanding interdisciplinary research on close relationships identi‹es the dynamics of such relations and the potential for actors who are intimately connected to experience intense con›ict (Bercheid et al. 1989...