Oil, Interdependence, and the Likelihood of War

There are two very good new posts on the Monkey Cage today.

Petro-aggression: How Russia’s oil makes war more likely by Jeff Colgan: Colgan notes that much of the current discussion about the role of energy trade in the Crimean Crisis focuses on the effect of the trade on Ukraine or Europe. He argues that the more important effect is on Russia.

Russia’s energy revenues (from both oil and gas) have ensconced Vladimir Putin as an autocrat and given him a free hand in foreign policy.  Russia is so heavily dependent on its energy revenues that it is a classic petrostate, making it more susceptible to corruption, autocracy and violent conflict.

 Russia’s incursion into Crimea can be seen as a close cousin of petro-aggression.  A state is more likely to instigate international conflict when it has a combination of (a) oil income and (b) a leader with aggressive preferences.  A lot more likely: 250 percent more military conflict than a typical non-petrostate, on average.  Oil income means more military spending, increasing the state’s scope for potential conflicts.  Even more importantly, it distorts the domestic politics of the state, reducing the leader’s domestic political risk from military adventurism and aggressive foreign policy.

What World War I can tell us about international commerce and war today by Erik Gartzke and Yonatan Lupu: The authors note that WWI is often viewed as a counter example to the argument that economic interdependence will force nations to show restraint in the use of force. Gatzke and Lupu argue that WWI is not as strong a counter example as it appears to be. In their words:

The growth of international economic exchange in Europe before the war was uneven.  Much of Western Europe belonged to a highly interdependent subsystem of states in which crises arose but were resolved peacefully.  By contrast, economic interdependence was much shallower in most of Eastern Europe and parts of Central Europe.  The Ottoman Empire, Serbia, Austria-Hungary, and several other newly independent Balkan states traded relatively little with each other. Unlike in the interdependent West, crises in this region tended to escalate to war.

It is no coincidence that World War I was sparked among the non-interdependent states in Eastern Europe.  Economic ties played an important role in averting escalation to major warfare in the crises that led up to the Great War, especially in the first and second Balkan wars.  These crises, however, produced the need for the more economically integrated countries, most importantly Germany and Russia, to demonstrate an increasing resolve to support their weaker, less interdependent, allies, Austria-Hungary and Serbia.  Alliances tightened after Germany and Russia took turns backing down under the pressure of war in previous crises.  Tighter alliances increased the leverage of Balkan allies, but only by in effect handing the foreign policies of the interdependent powers over to countries that were less well integrated into the world economy, and thus had fewer reasons not to engage in war.

 As for what lessons we can draw about today's world, Gartzke and Lupu argue:

The size and organization of existing trade networks suggest that Asia, like western European powers in the decades before World War I, is more likely to manage secondary crises without bloodshed.  If interdependence works as theorized, disputes such as those over the Senkaku/Diaoyu Islands are more likely to be occasions of considerable posturing and no actual force.   While no one likes to be the loser, excessive brinksmanship is not a practical strategy in the world that Japan, China and other developed nations inhabit today.  Discretion is likely to rule these relationships, even if there is occasional grumbling from those on the short end of the stick.  There is much to gain from tough talk, but more to lose by failing to pull back from the brink.

The larger risk to international stability today comes from nations cast in the role of the Eastern European powers a century ago.  Lacking economic inhibitions and with no other methods to advance themselves, sovereigns in some countries will find it useful to heighten international tensions.  North Korea is a prime example.  Russia is on the cusp.  Reliance on energy exports rather than a more diversified trading base has allowed President Putin to bluster more often and occasionally to engage in naked aggression, if only against minor powers so far.  Fortunately, fewer of these countries exist today and most are on the periphery of the international system, not near its center.