9.3 Economic Interdependence and Conflict Prevention

Economic interdependence and globalization have reshaped international relations. Countries with strong economic ties are less likely to fight, as the costs of conflict outweigh potential gains. Trade agreements and integration further solidify these peaceful connections.

However, economic ties aren't a guarantee of peace. Critics argue that asymmetric dependencies and inequalities can fuel tensions. The relationship between economics and conflict prevention is complex, with both opportunities and challenges.

Economic Theories of Peace

Capitalist Peace Theory

Top images from around the web for Capitalist Peace Theory

• 

  A Conservative Case for the Commons | Grassroots Economic Organizing View original

  Is this image relevant?

• 

  Pyramid of Capitalist System - Wikipedia View original

  Is this image relevant?

• 

  2.1 What is Economics? – Foundations of Business View original

  Is this image relevant?

• 

  A Conservative Case for the Commons | Grassroots Economic Organizing View original

  Is this image relevant?

• 

  Pyramid of Capitalist System - Wikipedia View original

  Is this image relevant?

1 of 3

Top images from around the web for Capitalist Peace Theory

• 

  A Conservative Case for the Commons | Grassroots Economic Organizing View original

  Is this image relevant?

• 

  Pyramid of Capitalist System - Wikipedia View original

  Is this image relevant?

• 

  2.1 What is Economics? – Foundations of Business View original

  Is this image relevant?

• 

  A Conservative Case for the Commons | Grassroots Economic Organizing View original

  Is this image relevant?

• 

  Pyramid of Capitalist System - Wikipedia View original

  Is this image relevant?

1 of 3

• Capitalist peace theory posits that capitalist economic systems promote peace between nations
• Argues that free market economies and private property rights create incentives for cooperation and peaceful resolution of conflicts
• Suggests that capitalist countries are less likely to engage in war with each other due to shared economic interests (trade, investment)
• Asserts that the spread of capitalism can contribute to a more peaceful international order
• Critics argue that capitalist competition can also lead to economic inequality and exploitation, potentially fueling conflicts

Liberal Peace Theory

• Liberal peace theory contends that liberal democratic values and institutions foster peace among nations
• Emphasizes the role of individual rights, representative government, and the rule of law in promoting peaceful relations
• Argues that democracies are less likely to go to war with each other due to shared values, accountability to citizens, and institutional constraints on war-making
• Suggests that the spread of liberal democracy can contribute to a more stable and peaceful world order
• Critics point out that democracies have engaged in wars with non-democracies and that the theory may not apply universally

Commercial Liberalism

• Commercial liberalism holds that free trade and economic interdependence can promote peace between nations
• Argues that trade creates mutual benefits and raises the costs of conflict, making war less attractive
• Suggests that countries with strong trade ties are less likely to engage in military conflicts due to the potential economic disruption
• Asserts that free trade can foster communication, understanding, and shared interests among nations
• Critics argue that trade can also create economic dependencies and inequalities that may fuel tensions and conflicts

Economic Globalization and Integration

Economic Interdependence

• Economic interdependence refers to the mutual dependence of countries on each other's economies through trade, investment, and financial flows
• Globalization has increased economic interdependence by facilitating the movement of goods, services, capital, and labor across borders
• Countries that are highly interdependent are more likely to have aligned economic interests and incentives to maintain peaceful relations
• Economic interdependence can create mutual vulnerabilities, as economic shocks or disruptions in one country can have spillover effects on others
• Critics argue that asymmetric interdependence, where one country is more dependent on another, can create power imbalances and potential for coercion

Free Trade Agreements and Economic Integration

• Free trade agreements (FTAs) are international treaties that reduce or eliminate trade barriers between participating countries
• FTAs can take various forms, such as bilateral agreements between two countries or multilateral agreements involving multiple nations (World Trade Organization)
• Economic integration refers to the process of removing trade barriers and harmonizing economic policies among countries
• Integration can occur at different levels, from preferential trade agreements to customs unions, common markets, and economic unions (European Union)
• FTAs and economic integration can promote economic interdependence, foster cooperation, and raise the costs of conflict among participating countries
• However, critics argue that FTAs can also lead to economic dislocation, job losses, and inequality, potentially fueling social and political tensions

Economic Deterrents to Conflict

Opportunity Costs of Conflict

• Opportunity costs refer to the benefits that are forgone when choosing one course of action over another
• In the context of conflict, opportunity costs include the economic benefits that are lost due to engaging in war or hostilities
• Conflict diverts resources away from productive economic activities, such as trade, investment, and development
• The destruction of infrastructure, disruption of trade routes, and loss of human capital during conflict impose significant economic costs
• Countries with high levels of economic interdependence and integration face higher opportunity costs of conflict, as they stand to lose more from the disruption of economic ties
• The prospect of economic losses and foregone benefits can act as a deterrent to conflict, as rational actors weigh the costs and benefits of war
• However, the deterrent effect of opportunity costs may be limited in cases where the perceived benefits of conflict outweigh the economic costs or where leaders prioritize non-economic factors (ideology, nationalism)