Network Modeling of International Peace and Trade Data

Despite the desire to focus on the interconnected nature of politics and economics at the global scale, most empirical studies assume that the major actors are not only sovereign countries, but also that their relationships are independent. This means, for example, that trade is often studied without taking into account the interdependence of one country's trade with another. Similarly in international politics, it is often assumed that the policies of one country are entirely independent of the policies in another, even though we may observe consultation between them. Statistical studies have typically assumed that these kinds of dependencies must be ignored. In contrast we employ newly developed statistical methods to reveal these heretofore hidden interdependencies among both trade and international politics. In particular, we develop and estimate statistical models for dependent dyadic data that simultaneously estimate the correlation of actions having the same initiator, the correlation of actions having the same recipient, as well as the reciprocity of actions between a pair of actors and third-order dependencies involving the clustering of three or more actors. In particular, we re-examine some of the claims of the democratic peace hypothesis to see whether they may be explained in part by the dependencies among the actions of countries. In addition, we also re-examine standard models of international trade to gauge whether international commerce can be better understood in the context of dependencies among trading patterns. Preliminary results suggest that there is considerable leverage to be gained by focusing on the dependencies in dyadic data of the kind represented by international trade as well as international conflict and cooperation. The application of this approach has the promise of transforming empirical studies of dyadic, or transactional, data in political science, geography, and economics. In so doing, it may help to re-energize examination of the impacts of international dependencies upon international cooperation and commerce. Understanding the second and third order dependencies among trading countries will help provide a clearer picture of the global opportunities and barriers to increased levels of global trade.