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On the Relation between Trade and Democratization

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  • Martin Hoppe

Abstract

Whether trade can achieve societal change is a contested topic and difficult to investigate. This round-up aims at summarizing recent empirical research on this topic while focusing on democracy and democratization as an important part of societal change. No robust results for change arising from trade can be found, but there exists an inverse causality, i.e., democratization leading to more trade. Further, reciprocal causality between democratic consolidation and trade agreements is found, meaning an influence of democratic instability on free trade agreements and vice versa.

Suggested Citation

  • Martin Hoppe, 2023. "On the Relation between Trade and Democratization," DIW Roundup: Politik im Fokus 143, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwrup:143en
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.868731.de/DIW_Roundup_143_en.pdf
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    References listed on IDEAS

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    1. Xuepeng Liu & Emanuel Ornelas, 2014. "Free Trade Agreements and the Consolidation of Democracy," American Economic Journal: Macroeconomics, American Economic Association, vol. 6(2), pages 29-70, April.
    2. Acemoglu,Daron & Robinson,James A., 2009. "Economic Origins of Dictatorship and Democracy," Cambridge Books, Cambridge University Press, number 9780521671422, October.
    3. Milner, Helen V. & Kubota, Keiko, 2005. "Why the Move to Free Trade? Democracy and Trade Policy in the Developing Countries," International Organization, Cambridge University Press, vol. 59(1), pages 107-143, January.
    4. Yu, Miaojie, 2010. "Trade, democracy, and the gravity equation," Journal of Development Economics, Elsevier, vol. 91(2), pages 289-300, March.
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