South Asia today is among the most unstable regions in the world, riddled by both intra- and inter-state conflict. This book presents a comprehensive technical analysis of the trade–conflict relationship within the region, and explores how South Asia demonstrates underperformance of its potential for economic integration.
Using the gravity model framework, the book highlights quantitative estimates of the cost of conflict in terms of loss of trade for South Asia. Other variables representative of political and economic regimes are also included to make the model comprehensive, and the book goes on to discuss how the analysis reveals the overriding significance of the India–Pakistan relationship in the regional landscape. It looks at how the results of the econometric exercise reveal the extent to which a common border, when disputed, becomes a barrier rather than a facilitator to trade and, additionally, the extent to which long standing and persistent conflict can debilitate trade relationships.
The book is a useful contribution for students and scholars of South Asian studies and international political economy, and assists in formulating policy to correct the anti-home bias that is evident in trade patterns of the South Asian economies.
1. Introduction 2. South Asia - The Region 3. Trade and FDI Patterns of South Asian Countries 4. Preferential Trading Agreements in South Asia 5. Conflict in South Asia 6. Theoretical Foundations of the Economic Integration and Conflict Relationship in South Asia 7. Impact of Conflict on Intra-regional Trade in South Asia: A Gravity Model Analysis 8. Summary Findings and an Assessment of the Way Forward