Economic Interdependence and Conflict

Abstract Recent studies on commercial liberalism have paid more attention to microfoundations linking economic interdependence to peace. Using a bargaining model of war, these studies have specified and tested different causal mechanisms through which economic ties function as a constraint, a source of information, or a transformative agent. Recent scholarly efforts in theoretical development and some empirical testing of different causal processes suggest the need to consider scope conditions to see when an opportunity cost or a signaling mechanism is likely to be salient. Future research can be best benefited by focusing on how economic interdependence affects commitment problems and empirically assessing the relative explanatory power of different causal arguments.