Trade Liberalization and Regime Type: Evidence from a New Tariff-line Dataset∗ (original) (raw)

This paper provides an empirical analysis of the theoretical prediction that variations in domestic political institutions produces heterogeneous trade policy across products and partners. We collect 5.7 billion observations of applied tariff rates that 136 countries apply to their trading partners. We then develop a Bayesian multilevel estimator that distinguishes the effects of regime type across industries and trading partners. We find that democracies tend to have lower trade barriers than non-democracies but are more likely to protect their agricultural sectors. We also find that pairs of democracies achieve greater tariff reductions in bilateral Free Trade Agreements than dyads with a democracy and a non-democracy because of shallower concessions granted by non-democratic importers to their democratic partners; democratic importers meanwhile still grant concessions to their non-democratic partners. Our findings add nuance to the claim that democratic political institutions fac...