Peace and Conflict Studies - Spring 2014

Peace and Conflict Studies Volume 21, Number 1 87 The democratic peace theory also had its dissidents since its inception and has been widely criticized on both theoretical and empirical grounds. Realist, Marxist, and power- transitionist scholars of international relations argued from different perspectives that it was convergence of interests and policy, rather than norms and institutions, which created a relative peace among Western democracies in the post-WWII era (see e.g. Barkawi & Laffey, 1999; Farber & Gowa, 1995; Layne, 1994; Lemke & Reed, 1996; Oren, 1995; Rosato, 2003; Spiro, 1994). A recent challenge to the democratic peace theory is the argument that the correlation between democracy and peace is spurious and it is capitalism , rather than democracy, which has created a relative “zone of peace” among democratic countries (Gartzke & Hewitt, 2010; Gartzke, 2007; McDonald, 2010; Mousseau, 2009). According to the proponents of the capitalist peace theory, capitalism reduces the use of force in interstate relations by de- emphasizing land and minerals (Gartzke, 2007), establishing contract-intensive economies (Mousseau, 2009), and reducing the state’s role in the economy (McDonald, 2010), thereby leading to “capitalist peace”. The “capitalist peace” argument currently suffers a weakness that the democratic peace argument suffered until recently, namely an unsubstantiated universality claim. Despite the presence of considerable empirical evidence which indicates that democracy’s (and several other variables’) effect on interstate conflict varies in developing and developed worlds (Goldsmith, 2006; Henderson, 2003, 2009; Mousseau, 2002), the proponents of the “capitalist peace” argument as well as the scholars who challenged them via statistical refutations (Choi, 2011; Dafoe, 2011) have not taken into account the distinction between developing and developed countries and tested their hypotheses within samples that included “all dyads” in different time periods. This article aims to fill this gap by testing capitalist and democratic peace arguments within the developing world. Studying Interstate Conflict in the Developing World The importance of context in international politics is well studied by scholars of International Relations (IR) (Diehl & Goertz, 2001; Goertz, 1994; Kacowicz, 1998). Contextual analysis of international relations refers to a study that takes into account the categorical differences between two or more “groups of states” and can be based on differences in region, history, regime-type, major-minor power status, economic development, and many others. The differences between the developed and developing states were one of the primary systematic differences that struck the critics of the mainstream IR