# Can trade and security alliance help reduce interstate war?

## TL;DR

This paper examines whether trade and security alliances can reduce the risk of interstate wars, finding that Chen's Extended Dependence Theory lacks empirical support for preventing the most severe conflicts.

## Contribution

The paper highlights the lack of empirical validation for Chen's Extended Dependence Theory in preventing full-scale wars.

## Key findings

- Extended Dependence Theory does not show a peace-building effect for full-scale wars.
- The Extended Dependence variable shows a ceiling effect in conflict prevention.
- Economic ties and security institutions do not effectively reduce the risk of severe conflict.

## Abstract

This study explains how the gap between theory and empirical research hinders scientific progress in the area of international political economy. To demonstrate this point, I use Chen’s Extended Dependence Theory, which challenges liberal peace theory but fails to provide supporting empirical evidence. Chen contends that it is not trade dependence between two states that fosters peace but a challenger’s trade relations with the defense-pact partners of the target. Although Chen criticizes liberal peace proponents whose primary concern is how to deter war, his empirical analysis is confined to how to decrease (fatal) militarized disputes short of war. I argue that for his theory to succeed, it must be validated against the most severe and intense form of conflict. Using statistical tests and substantive significance, I uncover no peace-building effect, with regards to war, attributable to Extended Dependence. It appears that the Extended Dependence variable exhibits a ceiling effect. Future research should explain why economic ties and security institutions fail to work together to lower the risk of the most destructive form of conflict.