Why Democracies Cooperate More: Electoral Control and International Trade Agreements

TLDR

International trade barriers have fallen over the past fifty years, largely due to the proliferation of liberalizing trade agreements. The study examines how domestic political conditions, especially regime type, shape states’ likelihood of entering trade agreements. The authors test this by analyzing the formation and expansion of preferential trading arrangements since World War II in relation to regime type. Democratic countries are about twice as likely to form PTAs as autocratic ones, and democratic pairs are roughly four times as likely, indicating greater commercial cooperation among democracies.

Abstract

Over the past fifty years, barriers to international trade have decreased substantially. A key source of this decline in protectionism has been the proliferation of agreements among countries to liberalize commerce. In this article, we analyze the domestic political conditions under which states have concluded such agreements and, more generally, explore the factors affecting interstate economic cooperation. We argue that interstate cooperation on commercial issues depends heavily on the political regime types of participants: as states become more democratic, they are increasingly likely to conclude trade agreements. To test our claim, we examine whether the regime types of states have influenced their propensity to form and expand preferential trading arrangements (PTAs) during the period since World War II. We find that democratic countries are about twice as likely to form a PTA as autocratic countries, and that pairs of democracies are roughly four times as likely to do so as autocratic pairs. These results provide strong evidence that democracies are more commercially cooperative than less democratic countries.