Katrin Kamin (Christian Albrecht University, Kiel)
Katrin Kamin – Christian Albrecht University, Kiel and Vanessa A. Boese – Humboldt-University, Berlin
In his 2014 article "Democracy and Armed Conflict" Håvard Hegre argues "[p]erhaps the most serious challenge to the democratic peace comes from arguments suggesting that both democracy and
peace are outcomes of more fundamental societal changes (...) associated with socioeconomic development". This paper examines this challenge to the democratic peace. It studies the quadrangular relationship between democracy, interstate conflict, trade and socio-economic development. Employing Granger causality this article shows that these four factors are endogenous to each other and consequently should be analyzed simultaneously. We measure democracy using the Polyarchy Index from the Varieties of Democracy (V-Dem) data, armed conflict with indicators from the UCDP- as well as the PRIO Battle-Related Deaths Datasets and trade openness as well as female life expectancy from the World Development Indicators. In a second step, this article employs a simultaneous equation panel VAR model using a dataset covering 169 countries and the period 1962 - 2015 to study the effect of shocks in either measure and their
transmission mechanisms. Preliminary results suggest that an increase in the level of development can explain increases in the level of trade openness over a 10-year-period as well as a short-term
increase in conflict-involvement. An increase in conflict-involvement has a slight negative effect on democracy in the short run. There is a reciprocal Granger-causal relationship between conflict and development which provides further evidence for the high level of endogeneity in the system.