Riding the Wave: World Trade and Factor‐Based Models of Democratization

Studies of “waves” of regime change, in which large numbers of countries experience similar political transitions at roughly similar periods of time, though once popular, have fallen from favor. Replacing the “third wave” arguments are several competing models relating domestic social structure—specifically, the distribution of income and factor ownership—to regime type. If any of these distributive models of regime type is correct, then global trade has an important explanatory role to play. Under factor‐based models, changes in the world trading system will have systematic effects on regime dynamics. Trade openness determines labor's factor income and ultimately its political power. As world trade expands and contracts, countries with similar labor endowments should experience similar regime pressures at the same time. We propose a novel empirical specification that addresses the endogeneity and data‐quality problems plaguing previous efforts to examine these arguments. We investigate the conditional impact of the global trading system on democratic transitions across 130 years and all of the states in the international system. Our findings cast doubt on the utility of factor‐based models of democratization, despite their importance in fueling renewed interest in the topic.