Publications
Publications
- 2019
- HBS Working Paper Series
Economic Integration and Democracy: An Empirical Investigation
By: Giacomo Magistretti and Marco Tabellini
Abstract
We study whether economic integration fosters the process of democratization and the channels through which this might happen. Our analysis is based on a large panel dataset of countries between 1950 and 2014. We instrument actual trade with predicted trade constructed by estimating a time-varying gravity equation similar to Feyrer (2009). We find that economic integration has a positive effect on democracy, driven by trade with democratic partners and stronger for countries with lower initial levels of economic and institutional development. These results are consistent with a learning/cultural exchange process whereby economic integration promotes the spread of democracy from more to less democratic countries. We corroborate this interpretation by providing evidence against alternative mechanisms, such as income effects, human capital accumulation, and trade-induced changes in inequality.
Keywords
Democratization; Institutional Development; Economic Integration; International Trade; Trade; Global Range; Economics; Government and Politics
Citation
Magistretti, Giacomo, and Marco Tabellini. "Economic Integration and Democracy: An Empirical Investigation." Harvard Business School Working Paper, No. 19-003, July 2018. (Revised January 2019. Available also from VOX.)
About The Author
