Trade and War

Abstract

The next frontier for the study of trade and war will be the establishment of common microfoundations linking theories of trade to theories of conflict. Too much of the existing economic interdependence literature consists of empirical findings intended to resolve pragmatic debates; but since the evidence is inconclusive, and theories are imprecise, less has been learned than many would like. The literature would benefit from more rigorously defining the relationship between trade and the bargaining model of war. This chapter identifies three sets of causal mechanisms—constrain, inform, and transform—that appear to be likely candidates as drivers of the key findings in the literature. To operationalize and test these mechanisms, greater attention must be paid to the domestic politics of trade and foreign policy. By adopting a microfoundations approach, focusing on agency rather than outcomes, future research can unify disparate literatures and contradictory findings to gain new insights into the nature of trade and war.