The Achilles' Heel of Liberal IR Theory?: Globalization and Conflict in the Pre-World War I Era

Abstract

Despite substantial evidence that international trade has promoted peace in the post—World War II era, the commercial peace research program still faces an important historical challenge. Dramatic economic integration in the nineteenth century failed to prevent the increasing interstate hostilities that culminated in the outbreak of war in 1914. This article uses a theoretical revision grounded in standard trade theory to reexamine the relationship between commerce and peace in the fifty years before World War I, a period often referred to as the first era of globalization. The article focuses on domestic conflict over commercial policy rather than on interdependence to understand the conditions under which globalization promotes peace. In a sample dating from 1865 to 1914, the authors find that lower regulatory barriers to commerce reduce participation in militarized interstate disputes. Contradicting conventional wisdom, this evidence affirms a basic premise of commercial liberalism during the first era of globalization—free trade promotes peace.

Growth, Import Dependence, and War

“…Negotiations must then succeed in every period. 24 As stated in Lemma 3 below, in the unique equilibrium, F 's payo↵ is equal to its payo↵ from going to war, and F arms so as to maximise this payo↵. By requiring that the trade cost of war be moderate, Assumption 3 ensures that this payo↵ be positive: if it were negative, F would choose not to arm, and the equilibrium would collapse.…”

“…The assumption is needed in order to ensure the existence of a balanced growth path SPNE of the game. 24 The following lemma describes the SPNE of the subgame starting in period 2. For conciseness, we only present the equilibrium path.…”

The Merchants of Shanghai, the Mandarins of Beijing: Economic Interdependence in Chinese Foreign Policy

“…A recent study aims to restore the commercial peace out of the Great War's trauma and suggests that the war started not between countries with high economic interdependence, but between the Habsburg Empire and Serbia whose economic interdependence was limited (Gartzke and Lupu 2012;Copeland 1996;McDonald and Sweeney 2007). The world before 1914 was highly integrated, but the level of economic interdependence varied across regions.…”

The Rise of India: Overcoming Caste Society and Permit-License-Quota Raj, Implementing Some Economic Freedom

“…Therefore, measures of trade and measures of the avoidance of protectionism need not have the same impact on peace. See McDonald and Sweeney (2007).…”