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Centers of Gravity: Regional Powers, Democracy, and Trade

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  • Timothy M. Peterson
  • Thomas Lassi

Abstract

Classic studies on hegemonic stability and power transition suggest that concentration of capabilities favoring a single state can promote economic cooperation and discourage militarized conflict. However, tests of these arguments have been primarily limited to examining temporal variation in global capability distributions and corresponding levels of system-wide cooperation; few have examined the impact of capability concentration at the region level. In this article, we contend that concentration of regional military capabilities corresponds to lower trade costs for states throughout a region and to an incentive for weaker states to de-prioritize expenditure on the military, freeing resources that can be used to promote trade. As a result, this condition promotes higher levels of trade, particularly within the region. We also argue that democratic regional powers are better able to foster confidence in the sustainability of cooperation; thus, the trade-enhancing impact of concentrated regional capabilities is stronger when the predominant state is more democratic. We find evidence in support of our expectations in statistical models examining state trade between 1960 and 2007.

Suggested Citation

  • Timothy M. Peterson & Thomas Lassi, 2017. "Centers of Gravity: Regional Powers, Democracy, and Trade," International Interactions, Taylor & Francis Journals, vol. 43(2), pages 326-348, March.
    • Handle: RePEc:taf:ginixx:v:43:y:2017:i:2:p:326-348
    DOI: 10.1080/03050629.2016.1184661
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    References listed on IDEAS

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    1. Ronald Findlay & Kevin H. O'Rourke, 2007. "Introduction to Power and Plenty: Trade, War, and the World Economy in the Second Millennium," Introductory Chapters, in: Power and Plenty: Trade, War, and the World Economy in the Second Millennium, Princeton University Press.
    2. Ronald Findlay & Kevin H. O'Rourke, 2007. "Power and Plenty: Trade, War and the World Economy in the Second Millennium (Preface)," Trinity Economics Papers tep0107, Trinity College Dublin, Department of Economics.
    3. Ronald Findlay & Kevin H. O'Rourke, 2007. "Preface to Power and Plenty: Trade, War, and the World Economy in the Second Millennium," Introductory Chapters, in: Power and Plenty: Trade, War, and the World Economy in the Second Millennium, Princeton University Press.
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