Politics Remains but Economics Leads and Peace Follows: Making a Case for India-Pakistan Peace Process in line with China Model

Abstract

The paper traces the causal links of Indo-Pakistan conflict with trade, military expenditure and democracy under multivariate time series framework from 1950-2005. We find that higher exports to outside world and increased bilateral trade have high propensity to reduce hostilities between both nations. Furthermore, historically high military expenditures in Pakistan have been a direct outcome of continued hostilities in its Eastern borders whereas Indian military expenditure is weakly related with the conflict. Political orientation of both countries does not seem to significantly affect the conflict either. Overall, the findings support the case for liberal (economic) peace than political (democratic) peace.Inter-state conflict and trade; democracy and conflict; conflict and economic development