Under which circumstances do two democracies involved in a dispute decide to pursue binding conflict management? I argue that the existing literature is incomplete. In order to fully understand why democratic decision makers choose arbitration or adjudication over alternative strategies, it is necessary to consider the social trust levels of the general populations in both states. During arbitration and adjudication, states give up sovereignty in a crucial domain of foreign policy. This loss of control should be less problematic for high-trusting societies than their low-trusting counterparts. If citizens are generally optimistic about the behavior of strangers, they are more likely to place their country’s interests under the control of others. Furthermore, since the general population poses smaller constraints on decision makers in nondemocratic settings, I expect the effect of trust to be strongest in democratic dyads. An empirical analysis with a new data set of social trust provides support for this hypothesis.
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