On the Relation between Trade and Democratization

Martin Hoppe

No 143, DIW Roundup: Politik im Fokus from DIW Berlin, German Institute for Economic Research

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.

Pages: 6 p.
Date: 2023
New Economics Papers: this item is included in nep-int and nep-pol
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