Measuring Interdependence and Its Pacific Benefits: A Reply to Gartzke & Li

Abstract

Gartzke & Li’s ‘Measure for Measure’ usefully clarifies the mathematical relationships linking trade dependence, openness, and trade share. Oneal and Gartzke & Li agree on allmajor points: (1) high trade dependence, indicated by the lower bilateral trade-to-GDP ratio in each dyad, reduces the likelihood of violent interstate conflict; (2) openness, measured by the total trade-to-GDP ratio for the same state, also has important pacific benefits; and (3) trade share, the ratio of bilateral to total trade, is not a good measure of economic interdependence, because it does not capture the economic (and hence political) importance of states’ bilateral trade. The substantive benefits of both trade dependenceand opennesscan easily be shown. Oneal analyzes militarized interstate disputes using the best available data for trade and conflict and controls for duration dependence. With all dyads included, a one standard-deviation increase in dependencelowers the risk of a fatal dispute by 62%; such an increase in opennessreduces it by 25%. These results are consistent with more than 30 published or forthcoming studies that show that economic interdependence reduces the likelihood of interstate conflict.

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