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Contrary to commercial peace theories, which predicted that economic engagement would make possible China's peaceful rise, China seems to be engaging in more militarized disputes with its neighbors and trade partners. I offer an explanation for this apparent anomaly by examining the relationship between borders, trade, and conflict in a new dataset on Chinese Foreign Relations (CFR). I integrate the three main causal mechanisms in the commercial peace literature, constrain, inform, and transform, into a unified theoretical framework and use China's foreign policy behavior to develop and test this theory. I show that economic engagement, while capable of creating new areas of cooperation, is not effective at resolving underlying causes of military conflict such as territorial disputes or constraining the use of military force during crisis bargaining. Though disputed borders have been found to depress international trade flows in other regions, they have not impeded China's growing trade with its disputant neighbors. At the same time, China's use of military force against trade partners does not disrupt economic ties or produce opportunity costs as previously assumed. I find that conflict over unresolved territorial disputes account for 87% of Chinese uses of military force and China is not constrained by growing trade dependence with other claimants. These results suggest that trade may lead to stability at higher intensities of conflict --making wars more unthinkable-- but can also create instability at lower intensities of conflict -- incentivizing calibrated uses of military force, against which revoking trade would not be a credible response. Therefore, as long as China's territorial disputes remain unresolved, economic interdependence will not decrease the frequency with which China uses military force in these disputes but will put a ceiling on the intensity of these conflicts.

There is a simple and compelling logic to the thesis that economic interdependence decreases the risk of military conflict between nations. As an unconditional proposition, however, this does not seem to be the case. Countries that are economically integrated do sometimes wage war against each other. Yet, most articulations of the commercial peace theory base the causal mechanism on the economic costs of conflict on the aggregate national welfare. This is particularly problematic if one believes, as most international relations scholars do, that foreign policies are an elite-driven process rather than based on popular opinion. My dissertation addresses the need for a clear and testable causal mechanism by which commercial exchanges have a pacific effect on bilateral relations. In order to do so, it focuses on those who gain the most from interstate economic exchanges. I argue that business must have an influential effect on the formulation of policy for economic interdependence to reduce interstate militarized disputes. Moreover, this condition must exist on both sides of a dyadic relationship in order to build the necessary trust that their shared economic prosperity will be prioritized when conflicts do occur. This argument is encapsulated in a two-level theory of the commercial peace that incorporates domestic politics into the interstate bargaining process. I test this theory through a mixed method approach — (1) quantitatively examining the interaction of private sector size and bilateral trade on the likelihood of violent militarized disputes, and (2) two qualitative case studies tracing the process by which business exerts influence on security policy-making for the rival dyads of Colombia-Venezuela and China-Japan. The results establish the importance of economic elites in formulating foreign policy in conditioning the success of economic interdependence to reduce militarized conflicts.

Researchers continue to debate the impact of trade on interstate conflict. While many view trade as pacifying, others argue that dependencies increase friction and the risk of war. We provide a theory that explains how cross-border economic ties alternately enhance or impede international cooperation. Three main factors account for the heterogeneous effects of trade on conflict: interdependence, asymmetry, and multipolarity. Interdependence can act as a substitute for, or as a deterrent to, militarized violence. In the former case, interdependence actually increases more modest non-militarized conflict, while also discouraging militarized disputes. Asymmetry diminishes the conflict-inhibiting effect of trade ties, as dependency cannot simultaneously be used to coerce and to inform. Multilateral trade networks alternately moderate or enhance the bilateral effects of interdependence and asymmetry on interstate peace. Our theory and evidence reveal complex, cross-cutting consequences of economic interdependence on conflict behavior and also demonstrate effects well beyond the dyad, suggesting the need to include extradyadic ties in future theoretical and empirical research studying the commercial peace.

AbstractExisting theories of individual trade preferences do not satisfactorily explain how security concerns should affect American support for the US–China trade war that began in 2018. Although existing theories of public attitudes toward international trade—economic self-interest, sociotropism, partisanship, reciprocity, and xenophobia—all help to explain initial support for the trade war, these hypotheses do not adequately explain citizen attitudes in the context of an increasingly adversarial and securitized bilateral US–China relationship. In particular, they do not address how rising security tensions affect trade preferences. Using nationally representative original survey data (n = 1,016) and a nonrepresentative survey with an embedded experiment (n = 1,015), this article argues that securitization of the bilateral economic relationship has spurred threat perceptions and given rise to a Cold War narrative that has in turn caused a substantial share of Americans to become less concerned with the economic outcomes of trade and more concerned with trade's effect on security. These Americans demonstrate an instinctive "commercial peace" response, seeing trade liberalization as a potential deterrent to conflict. The results challenge conventional wisdom on political support for the trade war and add depth to existing theories of individual trade preferences regarding the interaction between economic, security, and psychological motivations.

Most studies of the 'commercial peace' hypothesis – that trade increases the opportunity costs of war, making it less likely – assume the state has a unified interest with respect to trade. However, it is well-established that trade creates economic winners and losers within a country. Loss of export markets due to conflict imposes significant costs on local economies, but disruption of imports is often less costly, and potentially even beneficial. We posit that opposition to conflict should correlate with subnational variation in the degree to which trade represents benefits or losses for groups and individuals within the polity. Examining public opinion data from Ukraine in 2014–15, early in its long-term conflict with Russia, we disaggregate by province and find that, the greater the importance of regional net exports to Russia, the less likely citizens are to support fighting against Russia and the more they are willing to accept costly compromises to end the conflict. We demonstrate the robustness of these findings using two separate surveys.

Most studies of the 'commercial peace' hypothesis – that trade increases the opportunity costs of war, making it less likely – assume the state has a unified interest with respect to trade. However, it is well-established that trade creates economic winners and losers within a country. Loss of export markets due to conflict imposes significant costs on local economies, but disruption of imports is often less costly, and potentially even beneficial. We posit that opposition to conflict should correlate with subnational variation in the degree to which trade represents benefits or losses for groups and individuals within the polity. Examining public opinion data from Ukraine in 2014–15, early in its long-term conflict with Russia, we disaggregate by province and find that, the greater the importance of regional net exports to Russia, the less likely citizens are to support fighting against Russia and the more they are willing to accept costly compromises to end the conflict. We demonstrate the robustness of these findings using two separate surveys.

The commercial institutional peace research program has provided empirical evidence that such regional institutions help reduce the incidence of militarized interstate conflict. But it remains unclear how regional commercial institutions produce their observed pacific effect. This article examines three different causal arguments to explain the commercial institutional peace. First, commercial institutions simply increase the economic opportunity costs of war for the state. Second, some commercial institutions provide information to member-states about the military capabilities of other institutional participants, which may make their bargaining for peace more efficient. Third, many commercial institutions bring high-level state leaders together on a regular basis, building trust to overcome certain commitment problems in international bargaining. The statistical results show empirical support for only the third explanation. Commercial institutions with more organs for high-level state leaders demonstrate a substantively strong and statistically significant effect in reducing the outbreak of military conflict. But commercial institutions with deeper economic integration and nested military–security structures are not associated with less military conflict. Together, these results suggest that the observed commercial institutional peace does not stem from economic integration per se, but rather from certain institutional structures that often accompany the regional integration process. Thus, the commercial institutional peace appears more related to the third leg of the Kantian tripod (international organizations) than to the second leg (international commerce).