Page 7 - Azerbaijan State University of Economics

Salah Salimian, Mahdi Movahedi Beknazar, Kiumars Shahbazi, Zahra Khalilzadeh Silabi: The Role
of Investment in the Equilibrium of International Political Economy (Game Theory Approach)

This new approach facilitated the expansion of trade cooperation and pushed the
political disputes to the sidelines (however, the conflicts were not completely
resolved). As a conclusion, it can be claimed that the trade relations between Taiwan
and China developed while the political conflicts still maintained. However, the
principle of trading is considered as a main step in international relations by all
accounts and this barely existed in the past decades. Therefore, it can be concluded
that with the presence of political conflicts, economic cooperation is real and possible.
This can help peace and stability and reduce conflicts. As investigated, economic
cooperation is possible even with the presence of political conflicts and some
historical examples have been presented.
Now, with the new advances and developments in industry and transportation,
distance has lost its traditional role as a barrier to trade, therefore, countries are not as
concerned about trade dependency as in the past .

Thus, it can be concluded that interaction, in its economic context, has extended to a
political context and therefore, helps peace and stability. The status of European
countries after World War II can be studied; shortly after World War II, the economic
cooperation between countries where there was hostility and conflict began to expand
and extended to important political issues in Europe until it found its present structure
and nature through the integration of the European Union. As noted in the principles
of Liberal theory, these developments could be analyzed in this framework and
context. However, it should be noted that this theoretical framework is incapable of
analyzing some divergences such as the UK leaving the EU (Brexit) and other
theoretical frameworks such as realism that should be used to explain it (Kazemi,
2015).

Moreover, it should be noted that what significantly affects economic cooperation is
capital interdependency. In other words, the more two countries cooperate and
converge in terms of capital, the less likely initiation of military conflict and serious
dispute will be since the risk and sensitivity of capital is much more compared to
other aspects of economic cooperation (Gharayan, 2011).

Within the framework of liberal schools, war is an exceptional phenomenon and the
principle of cooperation dominates the human community. The human being is
inherently a tradesman and sees their profit in cooperation. Likewise, war is the
product of some deviations in human nature such as ambition. The individual seeks
profit and competes to achieve it; however, individuals have many common interests
which lead to fulfillment of their commitments and obligations to society and social
cooperation in national and international arenas.

7