The complex structure of commercial peace contrasting trade interdependence, asymmetry, and multipolarity

Researchers continue to debate the impact of trade on interstate conflict. While many view trade as pacifying, others argue that dependencies increase friction and the risk of war. We provide a theory that explains how cross-border economic ties alternately enhance or impede international cooperation. Three main factors account for the heterogeneous effects of trade on conflict: interdependence, asymmetry, and multipolarity. Interdependence can act as a substitute for, or as a deterrent to, militarized violence. In the former case, interdependence actually increases more modest non-militarized conflict, while also discouraging militarized disputes. Asymmetry diminishes the conflict-inhibiting effect of trade ties, as dependency cannot simultaneously be used to coerce and to inform. Multilateral trade networks alternately moderate or enhance the bilateral effects of interdependence and asymmetry on interstate peace. Our theory and evidence reveal complex, cross-cutting consequences of economic interdependence on conflict behavior and also demonstrate effects well beyond the dyad, suggesting the need to include extradyadic ties in future theoretical and empirical research studying the commercial peace.