Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/69572
Authors: 
Liu, Xuepeng
Ornelas, Emanuel
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper: Trade Policy 4103
Abstract: 
We study the relationship between participation in free trade agreements (FTAs) and the sustainability of democracy. Our model shows that FTAs can critically reduce the incentive of authoritarian groups to seek power by destroying protectionist rents, thus making democracies last longer. This gives governments in unstable democracies an extra motive to form FTAs. Hence, greater democratic instability induces governments to boost their FTA commitments. In a dataset with 116 countries over 1960-2007, we find robust support for these predictions. They help to rationalize the rapid simultaneous growth of regionalism and of worldwide democratization since the late 1980s.
Subjects: 
regionalism
rent destruction
political regimes
trade liberalization
JEL: 
F13
D72
F53
F15
Document Type: 
Working Paper

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