Does political regime influence bilateral trade in West Africa? (original) (raw)
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DOI 10.1007/s10101-008-0053-8 ORIGINAL PAPER Democracy and trade: an empirical study
2003
The theoretical discussion on globalization has suggested that there are linkages between democracy and trade, although the direction of influence is less certain. Formal empirical studies remain scarce, and have often focused on the ques-tion of whether democratic regimes influence trade policy, as opposed to the actual relationship between democracy and trade. This paper seeks to answer the question, “Do democracies trade more? ” by applying the gravity equation to a large dataset of bilateral trade data for the period 1948–1999, while taking into account the role of democracy. It finds that democracy is positively related to trade flows, but only after controlling for trade pair heterogeneity. In addition, it makes the case for studies of this nature to draw a distinction between trade flows in the pre- and post-1990s period of rapid democratization as well as between developed and developing countries.
Trade and Democracy: A Factor-Based Approach
International Interactions, 2015
We study the relationship between trade openness and democracy using a data set with capital-labor ratios, trade flows, and regime type for 142 countries between 1960 and 2007. We are among the first to test a prediction that emerges from the model of Acemoglu and Robinson (2006): Relative factor endowments determine whether trade promotes democracy or not. The statistical results from two-stage least squares estimation indicate that trade is positively associated with democracy among labor-abundant countries but that trade has a negative effect on democracy in capital-abundant countries. The results are not robust, however, and thus we conclude that the evidence in support of their argument is relatively weak.
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This study analyses the role of governance institutions in trade involving Sub-Saharan Africa (SSA) and its trading partners. Specifically, the objectives of this study are to: investigate the effect of institutions on trade between SSA and its trading partners; and examine whether governance institutions matter more for trade in SSA resourcepoor countries (or non-mineral products) than for trade in resource-rich countries (or mineral products). Based on a combination of strands of literature on the subject matter, we used a modified gravity model to analyse the objectives highlighted above. Using data spanning 1996 to 2014, empirical analysis involves estimating variants of gravity equations using the modified Poisson pseudo maximum likelihood estimation approaches. Empirical results show that not all governance variables matter for trade between SSA and its partners. Whether it matters or not depends on countries’ resource endowment, the pattern of trade and the direction of trade...
Trade Liberalization and Regime Type: Evidence from a New Tariff-line Dataset∗
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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...