Global Trade, Tariffs, and War

Background: The Trump Administration is attacking the idea of free trade: abandonment of TPP, the “renegotiation” of NAFTA, and a trade war with China. All of this has caused angst among allies and ire from adversaries leading the world into a state of chaos reminiscent of the 1930s. The economic policies of the United States during the interwar period such as the Smoot-Hawley tariffs and not forgiving war debts contributed to onset of the second world war. In addition to protectionist economic policies, rising nationalism and ethnic tension make the current period unfortunately like the interwar period.  

"When goods don’t cross borders, troops will” 

This project will examine the trade networks of the interwar period (1918-1938) and the current period (1998-2018). Mapping the similarities in trade flows may give us further insights into the causes of war and to see if the policies of the Trump administration should be a greater cause for worry. 

Questions: Can the flow of international trade or the lack of trade amongst nations be a predictor of the likely hood of war (WWII as the model)? How closely does the current period match that of the interwar period? What could this mean? 

Hypothesis: I believe that there is a strong link between the flow of trade and the relations among nations. I think that the analysis of the interwar period will show that trade flows decreased (as tariffs were imposed) coupled with a rise in nationalism (and racism) made WWII all but inevitable. Unfortunately, I also believe that we will see the same patterns in the current period with respect trade and nationalism. 

Data Collection: Data is widely available from the following sources: World Trade Organization (https://www.wto.org/english/res_e/statis_e/statis_e.htm), World Bank (https://wits.worldbank.org/CountryProfile/en/Country/WLD/Year/LTST/TradeFlow/EXPIMP/Partner/by-country), and the United Nations (immigration data - http://www.un.org/en/development/desa/population/migration/data/empirical2/migrationflows.shtml#). Attribute data is available from various government archives and academic publications.  MFN status among countries will also be an attribute. 

Methodology: Import and export levels between countries could use to measure the “tie strength” of trade between nations – exact levels need deeper research. Also given the concept of economic specialization, I am undecided if directionality matters -- I believe that directionality will not matter considering the natural imbalances between developed and developing nations. 

Attribute data will be overlaid on the network: political ideology, population demographic data, immigration data, public policy, defense spending/mobilization. This is perhaps the most important feature of the network analysis. What do the attributes tell us about the network? Does a "nationalistic" government lead to economic isolationism and increased trade barriers? Is there correlation between trade flows and immigration flows? 

Additionally, I would like to look at they basis for an economy such as commodity or service. Which type of economy is more likely to be the belligerent in a war?  

Faction analysis will be conducted and may lead to the identification of alliances. 

Centrality measures and egonets can be used to identify the role of nations in international politics. Mediators pre-conflict perhaps? 

Trade openness of an economy compared with GDP growth overlaid on a network will provide additional insights and may lead to further research.  

Limitations: As with all network analysis, conclusions cannot be drawn – only inferred. Additionally, as the international economy has developed greatly in the post war era, therefore we may not gain data or insights that are directly comparable.  Another issue that may arise is the availably of detailed data from the interwar period as most data available at the above sources covers the modern period (post-1990).  
Opportunity for Further Research: I think this type of network analysis would be a useful to apply to a multitude of historical conflicts to mine for trends. I have a hypothesis that economic factors are the best predictor of conflict compared to all other factors: religion, ideology, tribalism, ect. And I think trade network analysis can focus research to confirm my hypothesis. In addition to preventing war, this analysis may provide insights into economic growth nd development -- perhaps even more useful data for policy makers (additionally the data would be easier to come by as we would only need to go back a few decades).

Unfortunately, I will not be able to take the second module.