When does liberal peace fail? Trade and nationalism

Abstract

Liberal peace research maintains that trade interdependence promotes interstate peace. In this study, I introduce nationalism as an important domestic factor and examine how it fares against trade as an explanation for war and peace and their interaction effects. I propose that when state leaders promote nationalism to bolster political legitimacy, they may not be incentivized to foster liberal peace through trade and instead may be willing to conflict with trading partners. A cross-national, time-series statistical analysis shows that nationalist leaders are likely to cause the pacifying effect of trade to fall apart and increase the likelihood of (fatal) militarized disputes, but not necessarily open warfare. These findings suggest that when politico-security interests of nationalist leaders collide with global economic interests, the former prevail over the latter in the context of low-level conflict, but not necessarily high-level conflict. Even nationalist leaders appear to be cautious of engaging in all-out bloody war with trading partners—the economic pain is greater than the gain. Nevertheless, the overall analysis indicates that liberal peace theory may be not as sure a safeguard as previously believed since it is ineffective in lowering the risk of dyadic disputes short of war in the era of rising nationalism.

Keywords:

• Trade
• nationalism
• liberal peace
• economic interdependence
• international conflict
• war

Acknowledgements

I would like to thank Noah Briggs, Eric Olson, Semih Patan, Michelle Rodriguez, Marco Rossi, Emily Schroeder, Dimitrios Simitsis, Dillon Tyksinski, and Daniel Williams for sharing their wonderful insights.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1 In US history, Donald Trump was not the only president who took a nationalist foreign policy stance. For example, “Ronald Reagan and George W. Bush started their presidencies with anti-UN rhetoric – less toxic than Trump’s, but hostile – along with vigorous unilateralism in other aspects of foreign policy” (Weiss, Forsythe, & Coate 2019, 501).

2 Though not based on the theory of audience costs, Schrock-Jacobson (2012) links ethnic nationalism to high risks of war; Bertoli, 2017) finds a positive relationship between World Cup nationalism and state aggression; and Gruffydd-Jones, 2017) demonstrates that countries are more prone to initiate militarized disputes in the two months following national holiday celebrations.

3 However, realists disagree with liberals since they deem foreign trade to be a source of vulnerability and thus a cause of conflict. For example, Waltz, 1979) asserts that economic interdependence is a form of vulnerability that states in anarchy seek to escape through war. Following up on Waltz, Copeland, 2015) asserts that trading partners do not relish mutual benefits when frictions arise over which side gains more from trade or when one side perceives the other side to be exploiting asymmetric trade relations, exposing trading partners to high risks of interstate conflict.

4 See also https://www.thebalance.com/what-is-trade-protectionism-3305896.

5 An exception is Adolf Hitler. When economic powers turned protectionist by raising tariffs and trade barriers in the 1930s, Adolf Hitler’s response was hostile, which ultimately helped set the Second World War in motion (Adorney, 2013).

6 A notable exception is Oneal and Russett (2005) who link trade to three different forms of conflict: all militarized disputes, fatal militarized disputes, and wars.

7 See https://correlatesofwar.org/data-sets/MIDs.

8 The website of the V-Dem Project provides detailed sources and explanations of how nationalism is conceptualized and measured (https://www.v-dem.net/en/).

9 The index captures neither how the public judges the legitimacy of their rulers whose governance is anchored to nationalism nor why national leaders come to power in the first place.

10 The use of V-Dem high-level democracy indices produces similar results.

Additional information

Notes on contributors

Seung-Whan Choi

Seung-Whan Choi is Professor in the Department of Political Science at the University of Illinois, Chicago. His research interests include nationalism, terrorism, and international conflict. He is the author of four books and 53 journal articles. His work has also appeared in popular media such as the National Interest and the Hill.