War, Trade, and the Mediation of Systemic Leadership

Processes of war, trade, and systemic leadership are often examined in isolation from one another. Sometimes, two of the three are studied together. Does war interrupt trade? Does systemic leadership reduce the level of warfare? Does systemic leadership lead to freer trade? While these are familiar questions, our contention is that all three processes are interrelated at the systemic level. War and trade are dependent upon systemic leadership. Trade expands in the presence of systemic leadership, and war expands as systemic leadership declines. Yet the expansion of war is also critical to the emergence of systemic leadership. At the same time, these relationships have not remained constant over time but have evolved. The scope of systemic leadership and the intensity of war have increased while the frequency of war among the most powerful actors has contracted. Trade, on the other hand, has expanded dramatically. A vector autoregression analysis of the three processes provides substantial empirical support for the argument that leadership leads to more trade and less war, while also promoting increasingly more pacific relations among elite states in the world system.