The Relationship between Economic Interdependence and Conflict Prevention: An Institutional Perspective

This paper investigates the relationship between economic interdependence and conflict prevention. It will focus on the institutional dimensions of the relationship between economic interdependence and conflict prevention & management. The early days of what has been dubbed the 'Arab Spring' raised some expectations about whether the region could see a new era of renewed regional cooperation and integration after several failed attempts. Instead, the unfolding of events across different countries has further weakened the Arab state system and has thus given rise to new transnational identities such as tribalism, sectarianism, and outright fundamentalism, rather than regional unity. Regional institutions have played a limited role in entrenching economic integration and preventing or managing conflicts. The region has been historically a volatile region of instability and till today, it remains one of the least integrated and most unstable regions globally. While integration momentum was gaining pace before 2010, the instability associated with the Arab Spring moved the region one step behind. The paper discusses the complex relationship between economic interdependence and conflict prevention/management from an institutional lens, and analyzes the main institutional factors influencing this relationship. It provides an account of the main functional regional institutions related to economic interdependence and conflict management in the Arab World and discusses their quality and effectiveness. The last section presents policy directions to enhance the role of institutions and allow for deeper integration and less conflict.