Democracy and Globalisation
65 Pages Posted: 20 Sep 2007
Date Written: December 2006
Abstract
The relationship between democracy and globalisation has been the focus of substantial policy and academic debate. Some argue that democracy and globalisation go hand in hand suggesting that unrestricted international transactions leads to increased political accountability and transparency. And, politically free societies are likely to have minimal restrictions on the mobility of goods and services across national borders. Others argue that the causal relationship should be reversed: democracies are more likely to have closed markets and vice versa. We examine these relationships between political democracy and trade and financial globalisation over the period 1870-2000 and treat both democracy and globalisation as both cause and effect. Our empirical strategy uses instrumental variables and estimates relationships using the Generalised Method of Moments framework. Our general findings support the hypothesis of a positive two-way relationship between democracy and globalisation.
Keywords: Democracy, globalisation
JEL Classification: D72, P51, F02, F41, N10
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
By Daron Acemoglu, Simon Johnson, ...
-
By Daron Acemoglu, Simon Johnson, ...
-
By Daron Acemoglu, Simon Johnson, ...
-
Do Democracies Have Different Public Policies than Nondemocracies?
By Casey B. Mulligan, Xavier Sala-i-martin, ...
-
Democratic Capital: The Nexus of Political and Economic Change
By Torsten Persson and Guido Tabellini
-
Democratic Capital: The Nexus of Political and Economic Change
By Torsten Persson and Guido Tabellini
-
Democratic Capital: The Nexus of Political and Economic Change
By Torsten Persson and Guido Tabellini