Resource information
This report examines the theoretical underpinnings of trade and conflict, and lays out the debate on how free trade affects conflict. In order to do so it examines the political economy of violence and how globalisation has factored into recent international and internal armed conflicts.The report highlights different theoretical approaches:the classic neo-liberal argument is that increased international trade makes conflict too costly, and thus countries that participate in trade are more likely to be peaceful other theories leaning on the neo-liberal argument argue that trade reduces conflict, but only when trade is symmetrical between countries or when countries trade in certain kinds of goodsdependency theorists argue that trade patterns between core (industrialised) countries and periphery (unindustrialised) countries deepen existing inequalities and provoke international conflict.The report also highlights that countries that trade in natural resources are more prone to internal conflict than countries that trade in manufactured goods, with the risk of conflict increasing when a country relies on natural resources for 30% or more of its GDP.The problem with this high-level of dependence on natural resources is two-fold: first, the inequitable manner in which natural resources are extracted and traded tends to create tensions between the economic elite and the local populationsecond, natural resources provide ripe economic opportunities for repressive governments and violent rebels to finance themselves during conflict episodes.The report argues that while making money has always been part of making war, now making money has become the ultimate end, which means that the point is not to win the war, resolve the conflict, and return to peace, but rather to feed the wartime economy. In that context globalisation has contributed to a number of factors making it easier to fuel war time economies. These include open global markets for selling illegally extracted resources, unethical foreign companies willing to buy illegal concessions, bargain with rebels, or cooperate with a corrupt and repressive regime, and a free flow of small arms from other countries.
