Trade and National Security: A Test for Best-Known Hypothesis

National security depends on soft power, the ability of a country to generate and use its economic power and to project its national values. It also depends on long-term factors that contribute to economic growth and increase the total resources base available not only for defense but to provide economic security in the form of income and business opportunities for individuals. The economic issues related to national security are both broad and complex. The economy and economic tools, however, enter into national security considerations in several other ways that include economic sanctions, export controls, economic incentives, expeditionary economics, and economic issues as a cause of conflict. The best-known hypothesis linking trade and conflict among nation-states says, given other thing countries that trade more with each other are less likely to go to war. The argument is a simple application of the theory of self-enforcing cooperation in repeated games. This paper focuses on the effect of trade integration between Iran and its important trading partners include Italy, Germany, Greece, Spain, France, Switzerland, Russia, Netherland, Belgium, Sweden, UK, Austria, on Iran’s national security over 1980-2015. The results indicate that the trade integration has positive effect on Iran’s national security in this period and the best-known hypothesis is valid.