The Globalization of Trade and Democracy, 1870-2000 / J. Ernesto Lopez-Cordova, Christopher M. Meissner.

Format:

Book

Author/Creator:

Lopez-Cordova, J. Ernesto.

Contributor:

National Bureau of Economic Research.

Meissner, Christopher M.

Series:

Working Paper Series (National Bureau of Economic Research) no. w11117.

NBER working paper series no. w11117

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2005.

Summary:

We study whether international trade fosters democracy. The likely endogeneity between democracy and trade is addressed via the gravity model of trade, allowing us to obtain a measure of natural openness. This serves as our instrumental variable for actual trade openness à la Frankel and Romer (1999). We use this powerful instrument to obtain estimates of the causal impact of openness on democratization. A positive impact of openness on democracy is apparent from about 1895 onwards. Late nineteenth century trade globalization may have helped generate the "first wave" of democratization. Between 1920 and 1938 countries more exposed to international trade were less likely to become authoritarian. Finally, our post-World War II results suggest that a one standard deviation increase in trade with other countries could bring countries like Indonesia, Russia or Venezuela to be as democratic as the US, Great Britain or France. We also see some variation in the impact of openness by region and note that commodity exporters and petroleum producers do not seem to become more democratic by exporting more of such items.

Notes:

Print version record

February 2005.