Discussions of trade interdependence and its political implications occasionally discuss the operationalization of interdependence in some detail, yet the measurement of the dependent variable—international conflict—has largely been taken for granted. Because of this absence, current studies ignore the possibility that realist and liberal interpretations of the political ramifications of interdependence could both be correct. Moreover, current measures of interstate relations allow only a partial testing of interdependence theory. I argue that events data can provide a better measurement of conflict and cooperation in testing theories of interdependence. I highlight the key theoretical claims in this debate, arguing that their predictions are not necessarily mutually exclusive. Finally, I undertake an analysis of interstate political cooperation and conflict which shows that trade has little bearing on levels of cooperation and that increased trade dependence can spur conflict, yet keep these conflicts from become endemic between trade partners.
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