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Virtual Water Trade and Bilateral Conflicts

Author

Listed:
  • Enrico De Angelis

    (IMT School for Advanced Studies Lucca)

  • Rodolfo Metulini

    (Department of economics and management, University of Brescia)

  • Vincenzo Bove

    (Department of politics and international studies, Social science building, University of Warwik)

  • Massimo Riccaboni

    (IMT School for Advanced Studies Lucca)

Abstract

n light of growing water scarcity, virtual water, or the water embedded in key water-intensive commodities, has been an active area of debate among practitioners and academics alike. As of yet, however, there is no consensus on whether water scarcity affects conflict behavior and we still lack empirical research intending to account for the role of virtual water in affecting the odds of militarized disputes between states. Using quantitative methods and data on virtual water trade, we find that bilateral and multilateral trade openness reduce the probability of war between any given pair of country, which is consistent with the strategic role of this important commodity and the opportunity cost associated with the loss of trade gains. We also find that the substantive effect of virtual water trade is comparable to that of oil and gas, the archetypal natural resources, in determining interstate conflicts' probability.

Suggested Citation

  • Enrico De Angelis & Rodolfo Metulini & Vincenzo Bove & Massimo Riccaboni, 2017. "Virtual Water Trade and Bilateral Conflicts," Working Papers 02/2017, IMT School for Advanced Studies Lucca, revised Jan 2017.
    • Handle: RePEc:ial:wpaper:2/2017
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    File URL: http://eprints.imtlucca.it/3650/1/EIC_WP_2_2017.pdf
    File Function: First version, 2017
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    Citations

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    Cited by:

    1. Angela Cheptea & Catherine Laroche-Dupraz, 2019. "Is irrigation driven by the economic value of internationally traded agricultural products?," Post-Print hal-02278996, HAL.
    2. Xia Xu & Fengping Wu & Qianwen Yu & Xiangnan Chen & Yue Zhao, 2022. "Invisible Effect of Virtual Water Transfer on Water Quantity Conflict in Transboundary Rivers—Taking Ili River as a Case," IJERPH, MDPI, vol. 19(15), pages 1-25, July.
    3. Ali Arefinia & Omid Bozorg-Haddad & Khaled Ahmadaali & Javad Bazrafshan & Babak Zolghadr-Asli & Xuefeng Chu, 2022. "Estimation of geographical variations in virtual water content and crop yield under climate change: comparison of three data mining approaches," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(6), pages 8378-8396, June.
    4. Sabrina Auci & Andrea Pronti, 2020. "Innovation in Irrigation Technologies for Sustainable Agriculture: An Endogenous Switching Analysis on Italian Farms’ Land Productivity," SEEDS Working Papers 1220, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Dec 2020.
    5. Soheila Zareie & Omid Bozorg-Haddad & Hugo A. Loáiciga, 2021. "A state-of-the-art review of water diplomacy," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(2), pages 2337-2357, February.
    6. Ilkhom Soliev & Insa Theesfeld, 2017. "Reframing for Sustainability: Exploring Transformative Power of Benefit Sharing," Sustainability, MDPI, vol. 9(8), pages 1-23, August.
    7. Catherine Laroche-Dupraz & Angela Cheptea, 2021. "Is irrigation driven by the price of internationally traded agricultural products?," Post-Print hal-03227465, HAL.
    8. Delbourg, Esther & Dinar, Shlomi, 2020. "The globalization of virtual water flows: Explaining trade patterns of a scarce resource," World Development, Elsevier, vol. 131(C).

    More about this item

    Keywords

    Conflicts; International Trade; Water Scarcity; Virtual Water; Strategic Commodities;
    All these keywords.

    JEL classification:

    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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