EconPapers    
Economics at your fingertips  
 

The geography of conflicts and free trade agreements

Philippe Martin (), Thierry Mayer () and Mathias Thoenig ()

Working Papers from HAL

Abstract: We analyze the interaction of economic and political determinants of free trade agreements (FTA). In addition to standard trade gains, FTAs can promote peaceful relations by offering a political forum and by increasing the opportunity cost of conflicts that disrupt trade. If policy makers believe in such pacifying effects of FTAs, country-pairs with large trade gains from FTAs and high probability of conflict are more likely to sign a FTA. Using data on the 1950-2000 period, we show that this complementarity between economic and political gains is at work in the geography of FTAs. Country pairs characterized by a high frequency of old wars - which we use as a proxy of the probability of conflict - are shown to be more likely to sign FTAs, the more so the higher the trade gains from a FTA. These trade gains are estimated by a theory-driven empirical strategy to disentangle them from the political factors. We also show that, contrary to old wars, recent wars make it more difficult to negotiate a FTA. This suggests the existence of windows of opportunity to lock-in FTAs and peace. Finally multilateral trade openness, because it reduces the opportunity cost of a bilateral conflict, increases the political incentive to sign FTAs.

Keywords: free trading arrangements; trade and war (search for similar items in EconPapers)
Date: 2010-03
Note: View the original document on HAL open archive server: https://hal-sciencespo.archives-ouvertes.fr/hal-00973014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
https://hal-sciencespo.archives-ouvertes.fr/hal-00973014/document (application/pdf)

Related works:
Working Paper: The geography of conflicts and free trade agreements (2010) Downloads
Working Paper: The geography of conflicts and free trade agreements (2010) Downloads
Working Paper: The geography of conflicts and free trade agreements (2010) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-00973014

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2019-12-03
Handle: RePEc:hal:wpaper:hal-00973014