On the costs of not loving thy neighbour as thyself: the trade, democracy and military expenditure explanations behind India-Pakistan rivalry
AbstractThe authors examine whether greater inter-state trade, democracy and reduced military spending lower belligerence between India and Pakistan. They begin with theoretical models covering the opportunity costs of conflict in terms of trade losses and security spending, as well as the costs of making concessions to rivals. Conflict between the two nations can be best understood in a multivariate framework where variables such as economic performance, integration with rest of the world, bilateral trade, military expenditure, population are simultaneously taken into account. The authors' empirical investigation based on time series econometrics for the period 1950-2005 with causality tests suggests that reduced trade, greater military expenditure, less development expenditure, lower levels of democracy, lower growth rates and less general trade openness are all conflict enhancing. Moreover, there is reverse causality between bilateral trade, militarization and conflict; low levels of bilateral trade and high militarization are conflict enhancing, equally conflict also reduces bilateral trade and raises militarization. The authors also run forecasting simulations on 6 different VECM models. Globalization or a greater openness to international trade in general are more significant drivers of a liberal peace, rather than a common democratic political orientation suggested by the pure form of the democratic peace.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Institute of Social Studies of Erasmus University (ISS), The Hague in its series ISS Working Papers - General Series with number 1765018748.
Date of creation: 01 Jul 2007
Date of revision:
Contact details of provider:
Web page: http://www.iss.nl/
India; Pakistan; democracy and conflict; conflict and economic development; inter-state conflict and trade;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Polachek, Solomon W. & Seiglie, Carlos, 2007.
"Trade, Peace and Democracy: An Analysis of Dyadic Dispute,"
Handbook of Defense Economics,
- Polachek, Solomon & Seiglie, Carlos, 2006. "Trade, Peace and Democracy: An Analysis of Dyadic Dispute," IZA Discussion Papers 2170, Institute for the Study of Labor (IZA).
- Chang, Yuan-Ching & Polachek, Solomon W. & Robst, John, 2004. "Conflict and trade: the relationship between geographic distance and international interactions," The Journal of Socio-Economics, Elsevier, vol. 33(4), pages 491-509, September.
- Robst, John & Polachek, Solomon & Chang, Yuan-Ching, 2006. "Geographic Proximity, Trade and International Conflict/Cooperation," IZA Discussion Papers 1988, Institute for the Study of Labor (IZA).
- Dawood Mamoon & S. Murshed, 2010. "The conflict mitigating effects of trade in the India-Pakistan case," Economics of Governance, Springer, vol. 11(2), pages 145-167, April.
- 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.
- Mamoon, Dawood & Aslam, Rizwan & Mughal, Hammad & Paracha, Sohail & Ain, Noor ul & Ayesha, Anam & Qudus, Maliha & Saif, Osman Bin, 2010. "Regional trade in south Asia-impediments and the way forward," MPRA Paper 27010, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lidwien Lamboo).
If references are entirely missing, you can add them using this form.