UC Irvine

This study tests the relationship between Global Value Chains (GVCs) and regional security across six cases: three in Southeast Asia – Cambodia, Indonesia, and Vietnam and three in East Africa – Ethiopia, Kenya, and Tanzania in East Africa. This comparison not only determines if and how GVCs impact conflict but also assesses its relative impact compared to that of traditional trade. An empirical analysis of the relationship between GVC and regional security reveals four important conclusions. First, GVC has a significant impact on domestic and regional security. However, its effect is not the main effect. Instead, GVC acts as a moderating variable. Second, what a ruling coalition perceives as its existential threat influences its choice of a regime survival strategy. The regime survival strategy, in turn, determines the regime’s relationship with GVCs. Three, GVCs help regimes reinforce their regime security, create the political need for negotiation, and establish the condition for trading partners to make pre-negotiation adjustments during discord or potential discord. Some ruling coalitions also use GVC for state and nation-building. All these factors increase the odds of de-escalating conflicts before they become full-blown wars. Four, GVC cannot guarantee peace because while they effectively create a need for negotiation, they are less effective in generating a political need for compromise. Moreover, political actors that devalue economic gains can override their constraints. In summary, GVCs can tame wars and promote cooperation. However, unfortunately, they can also contribute to conflict escalation in some cases. The direction of their impact depends on the ruling coalition’s role in their adoption or proliferation.