The Influence of an Internationalizing Coalition on Political Leaders: A Key Intermediate Variable in the Relationship between Trade Interdependence and International Conflict





Published date: 

June, 2015


Chien-wu Hsueh


The purpose of this article is to demonstrate that the influence of an internationalizing coalition on political leaders is a key mediating variable in the relationship between trade interdependence and international conflict. In the literature, scholars have contradicting theories and empirical conclusions about whether trade interdependence promotes peace or conflict. In this article, I argue that, dyadically, the pacifying effect of trade interdependence is conditional upon the influence of an internationalizing coalition on both political leaders. When the support of internationalizing coalitions is important to both leaders’ political survival, the leaders will be more reluctant to use militarized measures to solve international disputes because the use of force will compromise the internationalizing coalitions’ opportunity to make money. On the other hand, if the support from the internationalizing coalitions is not important to both leaders’ political survival, the leaders will feel less constrained to use militarized measures. The underlying assumption is that internationalizing coalitions always prefer a peaceful and stable commercial environment to a conflictual one, because a conflictual situation hurts their commercial interests. I use a game-theoretical model to demonstrate the logic of this theory and then test it with logit and generalized estimating equations (GEE) models using data from 1962 to 2001. Besides, the game-theoretical model also points to a phenomenon that is worth paying attention to: as the influence of internationalizing coalitions on both political leaders increases, the probability of a militarized interstate dispute decreases, but this does not guarantee a positive peace-under some situations peace is built under the disguise of successful coercions. Based on this finding, a policy implication regarding the Cross-Strait relationship is suggested in the last part of this paper.