Peace and Conflict Studies - Spring 2014

Peace and Conflict Studies Volume 21, Number 1 93 democracy low was statistically insignificant even at 90% level. Thus, higher economic development is found to decrease the likelihood of a dyadic MID in the developing world, whereas democracy’s effect on the same likelihood was insignificant. These findings counter the democratic peace argument and support the central argument of the more recent “capitalist peace” literature, which contends that it is capitalism, rather than democracy, that leads to peace among states. Table II displays the substantive effects of development (low), capability ratio, alliance , major power , and state age (low) variables on the probability of a dyadic MID in a developing-state dyad. An increase from 3,000 dollars (mean value) by a standard deviation of 3,150 dollars in the GDPpc of the poorer country in a developing-state dyad decreases the likelihood of a MID in that dyad by almost 20%. Graph I below displays the marginal effect of economic development (low) in the probability of a MID in a developing-state dyad. The likelihood of a militarized interstate dispute, which is almost 7% when the GDPpc of the poorer state in the dyad is 1,000 US dollars, declines to below 2% when the GDPpc of the poorer state in that dyad reaches to 20,000 US dollars. Table II: Changes in the Predicted Probability of a MID in a Developing-state Dyad. * Changes in predicted probabilities are changes from the base predicted probability of a dyadic militarized interstate dispute in Table I (which was 0.06). In this and all other calculations of predicted probabilities, the dyad is assumed to be non-allied and include no developed country or major power; all other variables are set at their mean values. As for the control variables, a dyadic alliance reduces the probability of a dyadic MID by 38%, whereas major power inclusion increases the same probability by 31.5%. When power disparity in a dyad is doubled from its mean value, the probability of a MID in that dyad decreases by 25%. Lastly, doubling of the age of the younger state in a dyad from 40 (mean value) to 80 increases the probability of a dyadic MID by 30%. Variable Change in p (MID) economic development - 19.8 % capability ratio - 25 % alliance - 38 % major power + 31.5 % state age + 30 %