 Endogenous Security, Third-Party Trade, and Interstate Disputes: A Conflict-Theoretic AnalysisYang-Ming Chang and Manaf Sellak Defence and Peace Economics, 2023, vol. 34, issue 2, 160-182 Abstract: This paper examines third-party trade and its implications for conflicts between hostile countries not engaging in trade. We present a conflict-theoretic model to analyze two adversaries’ endogenous arming decisions when they separately establish a free trade agreement (FTA) with a neutral third-party state. We contrast this multiple FTAs regime with a single FTA regime between one adversary and the third-party state, which excludes the other adversary as a non-member. In our analysis, the benchmark case is a protectionist regime when the bilateral trade between the third-party state and each of the adversaries is a tariff war. Among the three trade regimes, we show that the two adversaries’ aggregate arming is the lowest under multiple FTAs but is the highest under a single FTA. These results suggest that, despite no trade between two adversary countries, multiple FTAs through third-party trade have the pacifying or appeasing effect of lowering overall military buildups in interstate conflicts. Date: 2023 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:defpea:v:34:y:2023:i:2:p:160-182 Ordering information: This journal article can be ordered from DOI: 10.1080/10242694.2021.1949830 Access Statistics for this article Defence and Peace Economics is currently edited by Professor Keith Hartley More articles in Defence and Peace Economics from Taylor & Francis Journals |
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