Trade networks and the Kantian peace

Abstract

Classical-liberal arguments about the pacifying effects of international trade are revisited, and it is argued that they consistently refer to the ability of trade to provide ‘connections’ between people and to create a perceived ‘global community’. Dependency and openness are commonly used to test for any pacifying effects of trade in the current literature, but these measures fail to capture some of the classical liberals’ key insights. Several network measures are introduced in order to give natural expression to and to develop the classical-liberal view that trade linkages reduce interstate conflict. These measures applied to trade flows are incorporated in the Russett & Oneal triangulating-peace model. The main results are that trade networks are indeed pacifying in that both direct and indirect trade linkages matter, and as the global trade network has become more dense over time, the importance of indirect links by way of specific third countries has declined, and the general embeddedness of state dyads in the trade network has become more relevant. These findings suggest that the period since World War II has seen progressive realization of the classical-liberal ideal of a security community of trading states.