Effects of civil wars on international trade, 1950-92

Abstract

The relationship between economic interdependence and international conflict is a burgeoning research topic. Previous research has examined the role of interstate conflict on bilateral total trade. Civil wars also have severe consequences on society and are not uncommon. This article seeks to shed light on this relationship by examining the impact of civil war in one country on the total bilateral trade between the afflicted state and its trade partners. The repercussions of civil war participation on a militarily intervening third party's trade also receive scrutiny. Furthermore, the outcome of the civil war is investigated to determine whether all war terminations have the same effects on trade. Finally, this article questions whether the effects of civil wars can be mitigated by security partnerships. One key finding from analyses of 120 countries between 1950 and 1992 is that civil wars decrease bilateral trade between states by one-third. In addition, the findings indicate that the effects of civil wars on trade are not limited to countries where the civil wars are occurring but also affect joiners. Furthermore, the outcome types of civil wars have repercussions for future bilateral trade and, under certain situations, their effects can be alleviated.