International Crises and the Capitalist Peace

Recent research suggests that free markets and economic development contribute to a reduction in interstate conflict. This “capitalist peace” has been seen alternately to complement or to supplant the more well-known democratic peace effect. Here, we compare the behavior of democracies and capitalist dyads in the context of the Interstate Crisis Behavior (ICB) dataset. The ICB data offers a number of advantages in assessing the conflict decisions of national leaders, rather than the accidents of subordinates or others. In particular, we explore as yet untested implications of each perspective, examining the effect of regime type and economic and interest variables on escalation and crisis intensity. Our findings provide new evidence that free markets, economic development, and similar interests account for the special peace in liberal dyads.