Security Externalities of Trade

This project studies how trade enriches and empowers states as well as how this relationshipbetween commerce and power affects international relations. Such an investigation is important because most recent studies have focused on the non-military benefits of trade. As a result,researchers often argue that increasing trade between countries would strengthen their peaceful relations because states do not want to lose these benefits. This line of explanations, thoughdominant, would struggle at explaining conflicts where states’ military power is further boostedby their openness to international trade such as China’s recent conflict with the U.S. and Russia’s conflict with Ukraine and the EU. Our project can contribute to the existing wisdom viaa careful analysis of how states translate trade gains into military power, a mechanism thathas been sidelined for decades. It can therefore also contribute to more effective policymaking,particularly about trade policies and conflict management.

To carry out this research, we will take three main steps. First, we study whether and howtrade affects states’ military power. To do so, we draw from recent developments in networkanalysis which will allow us to examine how much states trade with each other, how their tradepartners trade with other countries, and how central each state is in the respective networks overtime. Building on this measurement, we will also examine how it affects country A’s relationswith country B. Second, we expand our focus and study how factors beyond a pair of countriesfurther complicate the above relationship. In particular, we study how preferential trade agreements (PTAs), in addition to promoting trade within a community, also exclude other countries.This can make the excluded states less capable of exploiting gains from trade and potentiallymore willing to fight. Finally, we will draw policy lessons from the above studies and examinedifferent tool kits states can tap into to reduce security concerns and manage potential conflict.These can include targeted measures such as dual-use export controls or broader regimes suchas economic embargoes. Taken together, our project proposes innovative ideas and measurementthat advance trade-conflict studies and holds important implications for policymakers.

Project funding:  FWF

Project leader: Univ.-Prof. Andreas Dür, Mag. MA PhD