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Not loving thy neighbour as thyself: Trade, democracy and military expenditure explanations underlying India-Pakistan rivalry


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  • Syed Mansoob Murshed

    (Birmingham Business School; Institute of Social Studies (ISS); and Centre for the Study of Civil War (CSCW), PRIO)

  • Dawood Mamoon

    (Pakistan Institute of Trade and Development (PITAD), Islamabad)


This article analyses whether greater international trade, democracy and reduced military spending lower hostility between India and Pakistan. Conflict between the two nations can be best understood in a multivariate framework where variables such as economic performance, multilateral trade with the rest of the world, bilateral trade, military expenditure, democracy scores and population are simultaneously taken into account. The empirical investigation is based on time series econometrics from 1950-2005, allowing causality to be examined. The results suggest that reduced bilateral trade, greater military expenditure, less development expenditure, lower levels of democracy, lower growth rates and less general trade openness are all conflict enhancing, albeit with lags in some cases. Moreover, there is reverse causality between bilateral trade, militarization and conflict; low levels of bilateral trade and high militarization are conflict enhancing, but conflict also reduces bilateral trade and raises militarization. Economic growth is conflict mitigating, but the reverse is not true. Globalization, or greater openness to trade with the rest of the world, is the most significant driver of a liberal peace, corroborating a modified form of the capitalist peace, rather than a common democratic political orientation suggested by the pure form of the Kantian liberal peace.

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Bibliographic Info

Article provided by Peace Research Institute Oslo in its journal Journal of Peace Research.

Volume (Year): 47 (2010)
Issue (Month): 4 (July)
Pages: 463-476

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Handle: RePEc:sae:joupea:v:47:y:2010:i:4:p:463-476

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Keywords: international trade; inter-state conflict; liberal peace; India-Pakistan;


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Cited by:
  1. Mamoon, Dawood & S. Mansoob, Murshed, 2008. "On the Conflict Mitigating Effects of Trade: The India-Pakistan Case," MPRA Paper 10431, University Library of Munich, Germany.
  2. Sylvanus Kwaku Afesorgbor & Peter A.G. van Bergeijk, 2014. "Measuring multi-membership in economic integration and its trade-impact. A comparative study of ECOWAS and SADC," Economics Working Papers 2014-06, School of Economics and Management, University of Aarhus.
  3. Afesorgbor, Sylvanus Kwaku & van Bergeijk, Peter A.G., 2011. "Multi-membership and effectiveness of regional trade agreements in Western and Southern Africa: a comparative study of ECOWAS and SADC," Proceedings of the German Development Economics Conference, Berlin 2011 1, Verein für Socialpolitik, Research Committee Development Economics.


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