Armed conflict is till date one of the major concerns in the world, as it can bring about tremendous economic, political and social impacts to a country. Political scientists thus have been trying to understand the relationship between economic interdependence and armed conflict, as it will have the potential for a great impact on the successful promotion of worldwide peace.
Review of Literature The relationship between economic interdependence and armed conflict has been a topic that draws many researchers to investigate. It has been suggested by Vanhook (2007) that the general liberal perspective claims that interdependence decreases the likelihood of conflict. Indeed, according to Crescenzi …show more content…
It is puzzling though to find that a large number of them conduct statistical analysis in order to draw their conclusions. This is because through such statistical investigation, we can only conclude that such a relationship is present, but is unable to explain why such a relationship is present. As mentioned in a research journal by Mansfield and Pollins (2003), such researches will not account for the “actual nature of interaction” between economic interdependence and conflict, which is in fact the whole crux of the …show more content…
Renowned economist Ann, 1980 mentioned that there are two main types of interdependence; the first being measured by transactions such as the buying and selling of goods between men and this is known as horizontal interdependence. The second, vertical interdependence is measured by the “responses of one economy to another” in terms of changes in factor prices. The main difference between vertical and horizontal interdependence is that horizontal trade involves final goods while vertical trade involves immediate goods. (Badinger and Egger, 2010) In the case of investigating how economic interdependence plays a role in reducing conflict between countries, vertical interdependence should be taken into account more instead of horizontal interdependence. This is synonymous to the classification by Wooten, 2007, who classified interdependence as sensitivity interdependence and vulnerability interdependence. Sensitivity interdependence refers to “economic conditions in countries being largely sensitive to changes in other countries”. That is, any changes in the economy of other country, whether how slight or minor, will have a significant impact on one’s country. The other form of interdependence, vulnerability interdependence emphasises “the benefits one can garner from cooperation and the potential losses of destabilizing