Investigating international relations and global politics more often than not involves properly recording international affairs but also understanding certain events and phenomena. As such global actors, political leaders, political scientists and academia as whole attempts to formulate theories as to explain and makes sense of those events that affect the global community. Those theories also serve the purpose of predicting the outcome of certain actions but more importantly; theories, in the case of international relation serves as a guideline from which political leaders and international actors conduct and formulate their global political agenda. Based on the first great debate of international relations opposing the liberalism to realism, this paper will attempt to argue that democracy is not a guarantee of peace but instead it is the economic interdependence present between states; based on the realist premise that global politics is about competition for power among self-seeking states that seek to maximize their national interests.
Arguments will be presented in order to support the stated thesis by consistently outlining the relationship between economic/trade interdependence and political conflict. It is clear that one of the challenges that will arise in the attempt to support the thesis will be how the key concepts are defined and understood as such this paper will provide clear concise definitions of those concepts and ideas. But mostly, those definitions will be the basis upon which the topic of ‘democratic peace’ will be approached.
On the surface ideas and enquiries on interdependence and conflict may be recursive in the sense that interdependence may affect conflict but conflict may have an effect on interdependence across different relationships and at different levels. This paper will therefor focus on the effect of interdependence on conflict due to the fact that it has been the topic of a large share of study that have been done in the last few decades but most importantly due to the mixed empirical results on the matter.
Liberalist theory argues that war is a product of conflicting societies and the result of imperfect institutions and that democracies as a whole are peaceful and do not go to war with one another whereas the realist theory which counters those two arguments. More specifically the realist theory argues a more skeptical view of the politics and the political sphere based on the fact that human nature is inherently fixed and selfish. This notion extends to the global political arena where international cooperation and collaboration gives way to the competition and a growing sense of nationalism amongst self-seeking states. This view of international relation thus maintains that the international system is defined by anarchy and much as the Lockean and Hobbesian theories of human nature argues this leads to selfishness, conflict and in this context, war. On the other hand the liberal theorist argues the merits of the “democratic peace” which understands that democracy and peace are linked, particularly in the sense that wars do not occur between democratic states.
Even were it universally agreed that there has never been an interstate war between democratic states, that fact might be devoid of theoretical or practical significance. Something on the order of 99% of all the pairs of states in the world have peaceful relationships in an average year. Until recently, the proportion of democratic states in the world has been small. So it is possible in principle that the only reason there has never been a war between democratic states is that such an event is statistically unlikely. Bremer (1992) analyzed data on virtually every pair of states in the international system from 1816 to 1965, for a total of 202,778 observations. His central conclusion was that from 1816 to 1965 the rates of warfare between democratic states versus those between other pairs are significantly different. Statistically speaking, Bremer's claim may be valid, but his observed proportion of democratic pairs of states involved in interstate wars between 1816 and 1965 was essentially zero, and his proportion of other pairs of states at war during this same period was 0.0005.
One reason Bremer observed such a microscopic difference between the rate of warfare between jointly democratic states and that of other pairs of states is that his analysis included many irrelevant pairs. There were so few democratic states in the pre–World War II era (1816–1939) that one might question the utility of analyzing those years at all. In addition, a huge number of the pairs of states Bremer included are so geographically isolated from each other that there is no realistic chance of war between them. Such pairs as Burma and Bolivia or Chad and Chile will never, it is safe to predict, fight wars against each other.

Empirical research on the effects of economic interdependence disputes the effects of economic interdependence in regards its positive effect on peace. Most studies generally find that trade either positively or negatively affects the prospect of conflict. The theoretical work that has generated these hypotheses takes trade as a given and then generates decision-theoretic analyses to determine the effect of trade on conflict. The prevailing view is that economic interdependence promotes interstate peace. The first contends that peace follows economic integration through the establishment of social links. Trade increases communication, a convergence of economic interests, and the establishment of cultural ties that promote relationships of trust and respect between trading partners that will prevent them from resorting to forceful means to resolve disputes. The second line of argument, which has become the central theoretical rationalization for the liberal proposition that trade promotes peace, is that interdependence results from trade partners’ mutual emphasis on maximization of gains from trade, which will be lost if conflict interrupts the trade relationship. From this standpoint, conflict is viewed as a kind of tariff on trade prices, driving import prices up and export prices down.
Thus, in developing a model of trade and conflict, it is important to connect trade and conflict in the most meaningful strategic method possible, which involves unfolding and analyzing the interaction between states in a way that endogenizes states’ decisions to trade as well as states’ decisions to threaten to use trade in an effort to extract political concessions and states’ decisions to follow through with those threats by escalating conflict. Additionally, it makes sense to assume that both sides are uncertain about each other’s utilities and war costs. By constructing a model to include these refinements, as such it is possible to capture the strategic implications of trade-peace interaction that has previously been overlooked. In particular, instead of deducing that trade leads to peace (though not because of liberal opportunity cost reasons), to demonstrate that not only is there no unconditional relationship between trade and peace, but widespread opportunities for bluffing actually increase the unintended chances of conflict.
Economic linkages and peace are in fact interrelated, but not in the way that traditional analysts have believed. Unconditional correlations between economic interdependence and either peace or conflict are nonexistent. Economic interdependence is much more complex and cannot be fully understood without asking why states liberalize and restrict trade and without investigating the role of economic dependency (Benson: 51). Economics-first states can try to convince opponents that they are actually politics-first in order to extract larger concessions from opponents, although Gartzke, Li, and Boehmer have convincingly demonstrated that severing interdependence will remove this incentive. On the other hand, politics-first states can try to develop reputations for being economics-first by fostering economic linkages instead of severing them. If a politics-first opponent that would otherwise sever economic ties perceives that the other state is politically weak, it will likely trade with its opponent to try to secure both political and economic gains. Finally, interdependence does not necessarily reduce conflict. Because both economics-first and politics-first states have incentives to misrepresent their types, there are possibilities for conflict due to misperception especially between trading states. Gartzke, Li, and Boehmer have shown that misperception can be alleviated if states restrict economic ties, but no such signal exists for a state to call out the bluff of a politics-first state trading in order to convince its opponent that it is economics-first and to induce dependence. If one of the trading states is actually trading disingenuously for the purpose of inducing dependence, then either it will succeed in extracting larger concessions from its opponent or violent conflict will break out.
In a world where contact is unavoidable and made the ever more simple and easy by technological advances, the level and need for strategic interdependence whether economic, political or social becomes greater and arguably more important. The realist argument is that this greater sense of the ‘need’ for multi-state association significantly raises the potential for conflict from a mere likelihood to an actual reality of conflict; as theoretically states inter alliances to deter or defend an enemy, real or perceived. This argument often lead to the understanding that the conflict which arises are amongst the states that has formed said alliance due to the fact that with increase familiarity come the increase in cause for conflict (much as familial setting). However this perception might be misleading and misplaced.
Does democracy cause peace? The empirical evidence in favor of the proposition that democratic states have not initiated and are not likely to initiate interstate wars against each other is substantial, especially when compared with that which could be brought to bear by specialists in the 1970s. Criticism of this evidence has so far met with reasonably persuasive counterarguments by the defenders of the proposition. Despite a common opinion to the contrary, the theoretical bases for the hypothesis regarding the absence of war between democratic states are highly developed and may to some extent be complementary as well as competitive. Outcomes of conflict and peace depend not on the benefits of trade, which liberals claim make war more costly, but on relative valuations of the benefits of interdependence and costs and benefits of fighting. From this perspective it is possible to conclude that economic interdependence does in fact promote peace, but for reasons other than those derived from the traditional liberal argument. The claim is that economic