Arming in the global economy: The importance of trade with enemies and friends

• 成果类型: Article
• 署名作者: Garfinkel, Michelle R.; Syropoulos, Constantinos; Yotov, Yoto, V
• 署名单位: University of California System; University of California Irvine; Drexel University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2020.103295
• 发表日期: 2020
• 关键词: Resource insecurity; Interstate disputes; CONFLICT; Arming; Trade openness; comparative advantage

摘要

We analyze how trade openness matters for interstate conflict over productive resources. Our analysis features a terms-of-trade channel that makes security policies trade-regime dependent. Specifically, trade between two adversaries reduces each one's incentive to arm given the opponent's arming. If these countries have a sufficiently similar mix of initial resource endowments, greater trade openness brings with it a reduction in resources diverted to conflict and thus wasted, as well as the familiar gains from trade. Although a move to trade can otherwise induce greater arming by one country and thus need not be welfare improving for both, aggregate arming falls. By contrast, when the two adversaries do not trade with each other but instead trade with a third (friendly) country, a move from autarky to trade intensifies conflict between the two adversaries, inducing greater arming. With data from the years surrounding the end of the Cold War, we exploit the contrasting implications of trade costs between enemies versus trade costs between friends to provide some suggestive evidence in support of the theory. (C) 2020 Elsevier B.V. All rights reserved.