The Liberal Illusion Is Not a Complete Delusion: The WTO Helps Member States Keep the Peace Only When It Increases Trade

Abstract

We use both qualitative and quantitative tools to examine whether membership in the WTO reduces the likelihood of conflict. In our qualitative analysis, we show how WTO facilitates cooperation and transparency. Then we study what policymakers say and do to use trade to promote peace. We also examine whether and how members of the WTO respond to acceding states as well as member states experiencing inter-state conflict. We find member states do little to expand trade with states in conflict. Moreover, they continue to use trade sanctions. Hence, they are sending contradictory messages about the trade/peace relationship. Next we test whether the trust engendered through daily interactions and participation in a rules based system (our membership hypothesis) reduces the likelihood of conflict or whether membership in the WTO which in turn leads to expanded trade reduces the likelihood of conflict (our membership and trade hypothesis). We find no evidence that membership alone reduces the likelihood of either major interstate war or militarized interstate dispute among members. However, when states are both members of the GATT/WTO and benefit from increased trade, they are less likely to engage in militarized interstate disputes. Hence, the liberal illusion is not a complete delusion.