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Clear and Clean: The Fixed Effects of the Liberal Peace

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  • Oneal, John R.
  • Russett, Bruce
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    Abstract

    In their article in this issue, Donald P. Green, Soo Yeon Kim, andDavid H. Yoon claim, contrary to liberal theory and extensive evidencefrom pooled time-series analyses, that neither joint democracy noreconomic interdependence significantly reduces the frequency ofmilitarized interstate disputes when dyadic fixed effects are taken intoaccount. Similarly, their fixed-effects analyses contradict theory andprevious evidence that democracies have higher levels of trade with oneanother than do other types of states. Our reexamination, however,refutes both claims and reinforces previous findings. Theirxed-effects analysis of disputes produces distorted results because theyconsider a relatively short period of time, 1951 92, in which variationis limited in the binary dependent variable and in the key independentvariables. When we analyze a longer period (1886 1992) with greatervariation in the data, the results confirm that democracy andeconomically important trade have important pacific benefits. Thedifferences between our analyses of the volume of bilateral trade andthose of Green, Kim, and Yoon primarily arise from a seemingly minormethodological decision: how to treat zero levels of trade when takingthe logarithm. A more reasonable method produces more reasonableresults: democracies have higher levels of trade than expected on purelyeconomic grounds. A fixed-effects model is seldom the best means ofanalyzing dyadic data. Indeed, our analyses illustrate the pitfalls thatcan occur in its use. Nevertheless, our findings regarding disputes andtrade provide additional confirmations of liberal theories ofinternational relations.

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    Bibliographic Info

    Article provided by Cambridge University Press in its journal International Organization.

    Volume (Year): 55 (2001)
    Issue (Month): 02 (March)
    Pages: 469-485

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    Handle: RePEc:cup:intorg:v:55:y:2001:i:02:p:469-485_44

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    Cited by:
    1. Alan M. Taylor & Reuven Glick, 2005. "Collateral Damage: Trade Disruption and the Economic Impact of War," Working Papers 515, University of California, Davis, Department of Economics.
    2. Dirk Nabers, 2007. "Crises, Hegemony and Change in the International System: A Conceptual Framework," GIGA Working Paper Series 50, GIGA German Institute of Global and Area Studies.
    3. Bosker, Maarten & de Ree, Joppe, 2014. "Ethnicity and the spread of civil war," Journal of Development Economics, Elsevier, vol. 108(C), pages 206-221.
    4. Sergey Mityakov & Heiwai Tang & Kevin K. Tsui, 2012. "InternationalPolitics and Import Diversification in the Second Wave of Globalization," Discussion Papers Series, Department of Economics, Tufts University 0770, Department of Economics, Tufts University.
    5. Sergey Mityakov & Heiwai Tang & Kevin K. Tsui, 2011. "Geopolitics, Global Patterns of Oil Trade, and China¡¦s Oil Security Quest," Working Papers 322011, Hong Kong Institute for Monetary Research.

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