Conference Paper
War and Peace in MENA: The Effects of International Trade and Finance
No.
ERF30_91
Publisher
ERF
Date
March, 2024
The relationship between economic and financial globalization and peace has been a subject of speculation and disagreement. Classical conceptions proposed that openness may act as a potent catalyst for peace. However, alternative perspectives have questioned this perspective by claiming that free trade can potentially weaken countries' national security. This debate underscores the need for empirical investigations beyond theoretical conjecture, providing a data-driven examination of the relationship between trade and financial globalization, and military conflict. This paper tries to explore the complex relationship between economic and financial integration and geopolitical conflicts, by focusing on the MENA region. Our analysis covers 142 countries over the period 2009-2020. Our results confirm that global trade liberalization is linked with a decline in the level of military conflicts in countries around the world. The relationship between financial openness and conflict varies depending on the subcomponents of conflict and its definition as de facto or de jure financial openness. When we focus on the MENA region, our results indicate that trade globalization contributes to reducing the general level of conflict in oil-exporting MENA countries, while contributing to the fueling of conflict in oil-importing countries. Also, de facto financial globalization raises conflict in oil-exporter and oil-importer MENA countries. In contrast, de jure financial openness has a reducing effect on the overall conflict level in the MENA region. We hope to provide insights into the various ways in which trade and financial integration can either promote peace or create instability on a global scale. As there seems to be a complex relationship between peace on the one hand, and trade and financial openness on the other, exploring this relationship, especially for the “heated” regions like the MENA can well pave the way for constructing a political economy framework within which policy options and priorities can be identified rationally and reasonably.
Authors
Seda Ekmen Özçelik
Associate Professor, Ankara Yıldırım Beyazıt University
Authors
Emre Ozçelik
Associate Professor of Economics, Middle East Technical...