War and Peace ... and International Trade

Dense trade networks that formed in the years after World War II may explain a startling decline in war over the same period.
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Dense trade networks that formed in the years after World War II may explain a startling decline in war over the same period.
(Photo: pogonici/Shutterstock)

(Photo: pogonici/Shutterstock)

Try to imagine the nations of Europe at war. It's almost unthinkable today, yet, 75 years ago, on the eve of World War II, military conflict was practically de rigueur. So what happened to war's good old days? According to research published today in Proceedings of the National Academy of Sciences, international trade—that's what.

Actually, the idea that war and trade are somehow connected isn't all that new. "There's certainly a literature that looks at trade and war," says Matthew Jackson, a professor of economics at Stanford University and co-author of the new paper. But, Jackson says, that body of research has yielded mixed results and, more importantly, hasn't examined the war-trade connection in much detail.

Countries with more trading partners are less likely to go to war.

For example, researchers have pointed out an inverse correlation between global exports and the frequency of war—that is, the more trade there's been, the less war. A closer look, however, reveals those variables follow pretty different patterns. The frequency of war dropped precipitously after 1950, and it's stayed low since. Trade—specifically, exports as a fraction of world gross domestic product—peaked in 1913 at 12 percent, but fell to seven percent in 1950, only reaching 12 percent again in 1973. In other words, wars don't track the overall amount of global trade very well.

Jackson and Stanford economics graduate student Stephen Nei noticed there was another feature of trade that seemed to be more important. In 1870, the average country had about three trading partners, but that number steadily climbed to between 17 and 34 partners, depending on how one defines a trade partnership. What if preventing war depended not on how much countries traded with each other, Jackson and Nei wondered, but rather how many countries they traded with?

To investigate, Jackson and Nei first developed mathematical models of military alliances and conflicts, both with and without trade. Those models predicted that, in the absence of trade, alliances would shift constantly as states fought each other for land and natural resources. Trade has the opposite effect. First, Jackson says, "there's more to lose when trade is there"—money, that is. Second, trade alliances give other states more of an incentive to defend allies that come under attack.

That line of thinking seems to play out in the data. As the models predict, countries are less likely to be at war with their trading partners, and countries with more trading partners are less likely to go to war in the first place.

"It really seems to be difficult ... to explain the peaceful period [after 1950] without bringing in trade," Jackson says.

Still, these are only first steps toward answering more important questions—for example, if you want to prevent wars in Africa, "do you need more trade within Africa or between Africa and the rest of the world?" Jackson says. He can't answer that question yet, he says, but hopes that, by building better models of trade and conflict, he might one day be able to.

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