Can Trade and Alliances Prevent War?

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Trade and security alliances have long been touted as tools for maintaining international peace. However, a recent study published in PLoS ONE challenges this notion by examining the effectiveness of these measures in preventing interstate wars. This study delves into Chen’s Extended Dependence Theory, which offers a fresh perspective on the relationship between trade, security alliances, and conflict prevention.

The Theory of Extended Dependence

Traditional liberal peace theory argues that economic development and mutual trade between countries significantly reduce the likelihood of war. This is often measured by dyadic trade dependence, which calculates the trade volume between two states relative to their economic size. Many studies support this theory, showing that increased bilateral trade flows reduce the probability of bilateral wars.

However, Chen’s Extended Dependence Theory suggests a more complex dynamic. Instead of focusing solely on direct trade relationships, Chen argues that a challenger’s trade dependence on the defense-pact partners of the target state plays a crucial role in fostering peace. According to this theory, potential aggressors are deterred from initiating conflict not just because of direct economic ties but also because they fear economic retaliation from the target’s allies.

Evaluating Chen’s Claims

Chen’s analysis, covering data from 1951 to 2010, presents strong evidence supporting the pacifying effect of Extended Dependence on both low-intensity and fatal militarized disputes. However, Seung-Whan Choi’s study questions the robustness of these findings, particularly regarding interstate wars—the most severe and destructive forms of conflict.

Choi argues that Chen’s analysis falls short because it does not consider the most severe conflicts, like wars, in its empirical testing. While Chen’s findings indicate a significant peace-building effect of Extended Dependence on low-intensity conflicts and fatal militarized disputes, Choi’s study finds no such effect when examining interstate wars. This discrepancy highlights a critical gap in Chen’s theory, suggesting that economic and security alliances might not be as effective in preventing wars as previously thought.

The Ceiling Effect of Extended Dependence

Choi’s study introduces the concept of a “ceiling effect” to explain why Extended Dependence fails to prevent interstate wars. The ceiling effect suggests that while economic ties and security alliances can deter minor conflicts, they are insufficient in preventing full-scale wars. This is because the stakes and costs associated with major wars often override the deterrent effect of economic retaliation.

Historical examples further illustrate this point. For instance, during the Falklands War between Argentina and the United Kingdom in 1982, Argentina did not face significant economic retaliation from the UK’s allies despite the intense conflict. Similarly, the Iraqi invasion of Kuwait in 1990 led to a direct military response from a coalition of forces, but the initial economic ties did not prevent the conflict.

Implications for Future Research

Choi’s findings emphasize the need for future research to address the limitations of Extended Dependence Theory. To advance the field of international relations, scholars must explore why economic ties and security institutions fail to work together to lower the risk of the most destructive forms of conflict. This includes understanding the conditions under which trade and security alliances can effectively prevent wars and identifying other factors that might play a role in conflict prevention.

Hmmm, what do you think?

To foster a deeper understanding and stimulate discussion, consider these questions:

  1. Do you think economic and security alliances are sufficient to prevent major wars, or are additional measures needed?
  2. How can international relations theories be improved to better predict and prevent interstate conflicts?


The study challenges established notions of how trade and security alliances contribute to international peace. Questioning the efficacy of these measures in preventing interstate wars opens the door for new research and theories that can better explain and mitigate the causes of major conflicts. As the world continues to grapple with the complexities of international relations, such insights are crucial for developing more effective strategies for peace.

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About the Author

Dr. Jonathan P. Scaccia, PhD, is a clinical-community psychologist with expertise in public health science and practice. He has led evaluation and research initiatives focusing on health equity, vaccine distribution, and organizational readiness. Dr. Scaccia has contributed to federal suicide prevention programs and vaccine equity strategies. He has been recognized for his impactful work and is a leading voice in advancing public health practices.

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