Trade, Openness and Domestic Conflict: An Empirical Investigation for Latin America

This paper explores whether there is an empirical relationship between trade, openness and domestic conflict for Latin America based on the analytical framework of Garfinkel, Skaperdas and Syropoulos (2004). Using ordinal regressions and Markov switching models for seventeen countries, we identify the factors responsible for the initiation and sustenance of domestic conflict. Our overall results suggest that: (i) increased trade openness reduces domestic conflict intensities but (ii) over dependence on agricultural exports, along with poor socio-political performance, lead to sustenance of low intensity conflicts. We also analyze conflict duration using proportional hazard models and find that over-reliance on agricultural exports plays the main role in conflict sustenance after controlling for socio-political factors.