War, Trade, and Distrust: Why Trade Agreements Don’t Always Keep the Peace*

There is growing evidence that preferential trade agreements (PTAs) provide strong institutional incentives to prevent international conflict among member states, often creating the conditions of trust that can help prevent militarized aggression. We provide an approach to the study of how international institutions influence conflict behavior that considers how PTAs exclude as well as include members and create asymmetrical relationships among members that could exacerbate conflict. PTAs do more than create expectations of economic gains and reduce opportunism; they also create hierarchical relations between states, which can encourage conflict under different conditions due to distrust. We theorize these conditions for militarized international disputes, develop appropriate measures using social network analysis, and test our expectations on new PTA data during the period 1950 to 2000.