Chapter 4 Liberal peace (Week 4)
4.1 Discussion questions
Owen (1994). What is democratic peace? Do you find the theory of democratic peace convincing, and why?
Schneider (2014). Does globalization or capitalism promote peace? Do you find the theories convincing? Why?
Can international institutions help prevent or punish acts of aggression? (*)
How Russia’s war is reshaping global trade alliances | DW News
4.2 Democractic peace
Owen (1994) seeks to synthesize the existing structural and normative explanations of democractic peace. He argues that liberalism is “universal and tolerant.” People are more likely to cooperate with each other and forgo coercion violence because there is a harmony of interests. Liberalism can lead to peaceful relations among democracies because war is costly and is “called for only when it would serve liberal ends.” Foreign democracies are believed to be “reasonable, predictable, and trustworthy.” In contrast, illiberal states are “unreasonable, unpredictable, and potentially dangerous” (pp.95-96).
Owen further argues that democratic institutions by themselves may not be enough because perception is the key. States can only enjoy democratic peace if its democratic peers accept it as a liberal democracy. Democratic institutions that give citizens leverage over governments’ decision making are important because in times of war liberal elites can agitate against war against other democracies and constrain the illiberal leaders.
4.3 Commercial and capitalist peace
Schneider (2014) surveys the studies concerning whether and how economic liberty promote peace. There are two strands of arguments here. The domestic strand (capitalist peace) argues that private property and competitive markets are the key institutions here. First, without strong protection of private property, governments can more easily bypass the domestic pressure for peace, ramp up its arming, and are therefore less likely to concede. Second, with competitive markets, firms are more likely to support liberalization, engage in global markets, and lobby for peaceful interactions. Without them, firms would turn to protectionism and are more willing to support expansionist policies to enlarge their markets. For more details see McDonald (2009).
The international strand argues that economic interdependence between states generates ex ante incentives to avoid the opportunity costs of conflict: the more states trade/invest with each other, the higher the costs of economic disruption if they fight each other (there is also an costly signaling argument, see Gartzke, Li & Boehmer (2001) or Morrow (1999)). As such, globalization and economic integration can help promote peace because they increase the opportunity costs.
Scheneider (2014)’s critique of the theories can be summarized as follows. First, the commercial peace theory needs to further refine its scope conditions (when governments heavily depend on certain sectors of the society (military or exporters) and when states trade more in certain types of commodities the effects can be opposite). Second, the capital peace thesis may favor further capital account liberalization and deregulation because openness can attract more investors and can stimulate economic growth. While the latter effect is less clear-cut, the former also suffers from potential endogeneity concerns.