How Outsourcing Affects Bilateral Political Relations
One issue the literature neglects is how outsourcing stimulates trade (imports, exports and foreign direct investment), thereby affecting political relations. However, at least as far back as 1750, economic philosophers such as Baron de Montesquieu in his L’Esprit des Lois, argued, “peace is the natural effect of trade.” This paper first reviews this literature and then presents econometric evidence. The evidence integrates political international relations events data with economics data on bilateral trade. The resulting econometric models show that trade between nations fosters more peaceful dyadic relations.
|Date of creation:||Oct 2004|
|Date of revision:|
|Publication status:||published in: Indian Journal of Economics and Business, 2004, 3 (special issue), 29-42.|
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- Solomon W. Polachek & John Robst & Yuan-Ching Chang, 1999. "Liberalism and Interdependence: Extending the Trade-Conflict Model," Journal of Peace Research, Peace Research Institute Oslo, vol. 36(4), pages 405-422, July.
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- Solomon W. Polachek, 2002. "Trade-Based Interactions: an Interdisciplinary Perspective," Conflict Management and Peace Science, Peace Science Society (International), vol. 19(2), pages 1-21, September.
- Polachek, Solomon W, 1997. "Why Democracies Cooperate More and Fight Less: The Relationship between International Trade and Cooperation," Review of International Economics, Wiley Blackwell, vol. 5(3), pages 295-309, August.
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