Grasping the commercial institutional peace

Abstract

While the commercial institutional peace research program provides empirical evidence that international institutions, especially preferential trade arrangements, help reduce the incidence of militarized inter-state conflict, it fails to delineate clearly how such institutions matter. Building from the logic that low opportunity costs for fighting, private information, and commitment problems constitute important causes of war, this article explores three interrelated causal mechanisms. First, the state leaders' increased expectations about future commerce create an incentive for these actors to consider peaceful bargains as an alternative to costly war. Second, security coordination under the umbrella of a commercial institution provides fuller information about state military capabilities, thus making inter-state bargaining for dispute resolution more efficient. Third, in bringing together high-level state leaders on a regular basis, commercial institutions may create the trust necessary to overcome commitment problems in inter-state bargaining. I explore how these mechanisms have operated within the Gulf Cooperation Council and the Economic Community of West African States.