Clear and Clean: The Fixed Effects of the Liberal Peace

Abstract

In their article in this issue, Donald P. Green, Soo Yeon Kim, and David H. Yoon claim, contrary to liberal theory and extensive evidence, that neither joint democracy nor economic interdependence significantly reduces the frequency of militarized interstate disputes in pooled time-series analyses when dyadic fixed effects are taken into account. Similarly, their fixed-effects analyses contradict theory and previous evidence that democracies have higher levels of trade with one another than do other types of states. Our reexamination, however, refutes both claims and reinforces previous findings. Their fixed-effects analyses of disputes produces distorted results because they consider a relatively short time period, 1951–92, in which variation in the binary dependent variable and the key independent variables, democracy and trade, is limited. When we analyze a longer period (1886–1992), the results confirm liberal theory. The differences between our analyses of bilateral trade and those of Green, Kim, and Yoon primarily arise from a seemingly minor methodological decision. A more reasonable method confirms that democracies do have higher levels of trade than expected on purely economic grounds. Though we do not advocate a fixed-effects model for analyzing these data and have serious reservations about its general usefulness, our findings provide additional confirmation of liberal theories of international relations.