Economic Interdependence and Conflict Deterrence: Analyzing Trade Relations Across Volatile Borders

Global Journal of Peace and Conflict Studies | Vol. 6, No. 2, February 2015 | pp. 442–450

DOI: 10.46882/2015/GJPCS/000071

Article Type: Original Research Paper

Title: Economic Interdependence and Conflict Deterrence: Analyzing Trade Relations Across Volatile Borders

Names of Authors: Rajesh Kumar¹, Yusuf Al-Kazi²

Authors’ Affiliations: ¹Department of Economics, Jawaharlal Nehru University, New Delhi, India; ²Department of Economics, University of Baghdad, Baghdad, Iraq

Abstract: Abstract: The liberal peace thesis posits that deep economic interdependence acts as a powerful structural deterrent against militarized interstate disputes. This study tests this hypothesis by analyzing bilateral trade volumes and border conflict incidents across three volatile regions from 1995 to 2013. Utilizing panel data regression analysis, we modeled the relationship between trade asymmetry, joint democracy indices, and the frequency of border skirmishes. The statistical outputs demonstrate that high bilateral trade volume significantly decreases the probability of militarized disputes (Beta = -0.45, p < 0.001). However, further breakdown shows that asymmetrical trade interdependence—where one nation relies disproportionately on the other—can actually amplify structural tensions and political vulnerabilities. The findings reveal that economic ties only deter conflict when the costs of trade disruption are equally distributed and catastrophic for both nations. The study concludes that regional trade blocks must incorporate equitable resource distribution rules to successfully function as peace stabilization mechanisms. This empirical insight challenges simple trade-peace assumptions and offers a nuanced framework for cross-border economic integration policies.

Keywords: Economic Interdependence, Liberal Peace, Trade Relations, Conflict Deterrence, Panel Data, Border Disputes, Asymmetric Trade

Manuscript Timeline: Received: September 02, 2014; Revised: November 11, 2014; Accepted: December 14, 2014; Published: February 18, 2015

Citation: Kumar, R., & Al-Kazi, Y. (2015). Economic Interdependence and Conflict Deterrence: Analyzing Trade Relations Across Volatile Borders. Global Journal of Peace and Conflict Studies, 6(2), 442–450. DOI: 10.46882/2015/GJPCS/000071

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