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The Global Arms Trade Network 1950-2007

We study the evolution of the global arms trade network using a unique dataset on all international transfers of major conventional weapons over the period 1950-2007. First, we provide a careful description of the characteristics of global arms trade using tools from social network analysis. Second, we relate our …findings to political regimes by studying whether differences in polity scores affect the likelihood of arms trade by estimating an augmented gravity equation. Our findings from the network analysis are much in line with common views of the Cold War. We see a clear division between the Warsaw Pact and NATO, with the Soviet Union being more central to the former than the United States to the latter. We find that differences in polity has a significant, negative effect on the likelihood of arms trade between two countries. The relationship is remarkably robust throughout the sample period and does not hold for trade in any other good that we investigate. The result suggests that democracies are indeed more likely to trade arms with other democracies than with autocracies since the former are not perceived as potential adversaries. We view this finding as evidence in favour of the Democratic Peace Theory.

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Paper provided by Stockholm University, Department of Economics in its series Research Papers in Economics with number 2010:2.

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Length: 40 pages
Date of creation: 02 Feb 2010
Date of revision:
Handle: RePEc:hhs:sunrpe:2010_0002
Contact details of provider: Postal: Department of Economics, Stockholm, S-106 91 Stockholm, Sweden
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Fax: +46 8 16 14 25
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  1. Paul Levine & Ron Smith, 1997. "The arms trade: winners and losers," Economic Policy, CEPR;CES;MSH, vol. 12(25), pages 335-370, October.
  2. Intriligator, Michael D, 1975. "Strategic Considerations in the Richardson Model of Arms Races," Journal of Political Economy, University of Chicago Press, vol. 83(2), pages 339-53, April.
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  10. Robert Ayanian, 1986. "Nuclear consequences of the welfare state," Public Choice, Springer, vol. 49(3), pages 201-222, January.
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  12. Balinga, Sandeep & Sjostrom, Tomas, 2001. "Arms Races and Negotiations," Working Papers 3-01-2, Pennsylvania State University, Department of Economics.
  13. Marc Flandreau & Clemens Jobst, 2005. "The Ties that Divide: A Network Analysis of the International Monetary System, 1890-1910," Sciences Po publications n°5129, Sciences Po.
  14. Sanjeev Goyal & Marco van der Leij & José Luis Moraga Gonzales, 2004. "Economics: An Emerging Small World?," CESifo Working Paper Series 1287, CESifo Group Munich.
  15. Alan M. Taylor & Reuven Glick, 2005. "Collateral Damage: Trade Disruption and the Economic Impact of War," Working Papers 515, University of California, Davis, Department of Economics.
  16. Casey B. Mulligan & Ricard Gil & Xavier Sala-i-Martin, 2004. "Do Democracies Have Different Public Policies than Nondemocracies?," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 51-74, Winter.
  17. Cowen, Tyler, 1990. " Economic Effects of a Conflict-Prone World Order," Public Choice, Springer, vol. 64(2), pages 121-34, February.
  18. Margherita Comola, 2012. "Democracies, Politics, and Arms Supply," Review of International Economics, Wiley Blackwell, vol. 20(1), pages 150-163, 02.
  19. Lucrezia Reichlin, 1997. "The arms trade: discussion," ULB Institutional Repository 2013/10205, ULB -- Universite Libre de Bruxelles.
  20. Keith Hartley & Todd Sandler, 2001. "Economics of Alliances: The Lessons for Collective Action," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 869-896, September.
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