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The Geography of Conflicts and Regional Trade Agreements

Author

Listed:
  • Thierry Mayer

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

  • Mathias Thoenig

    (CUI - Centre Universitaire d'Informatique - UNIGE - Université de Genève = University of Geneva)

  • Philippe Martin

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research)

Abstract
In addition to standard trade gains, regional trade agreements (RTAs) can promote peaceful relations by increasing the opportunity cost of conflicts. Country pairs with large trade gains from RTAs and a high probability of conflict should be more likely to sign an RTA. Using data from 1950 to 2000, we show that this complementarity between economic and politics determines the geography of RTAs. We disentangle trade gains from political factors by a theory-driven empirical estimation and find that country pairs with higher frequency of past wars are more likely to sign RTAs, the more so the larger the trade gains.

Suggested Citation

  • Thierry Mayer & Mathias Thoenig & Philippe Martin, 2012. "The Geography of Conflicts and Regional Trade Agreements," SciencePo Working papers Main hal-03461131, HAL.
    • Handle: RePEc:hal:spmain:hal-03461131
    DOI: 10.1257/mac.4.4.1
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03461131
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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F15 - International Economics - - Trade - - - Economic Integration
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative

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