Do Autocratic States Trade Less?

Cambridge Economics Working Paper No. 0742

KOF Working Paper No. 175

31 Pages Posted: 17 Sep 2007

See all articles by Toke Skovsgaard Aidt

Toke Skovsgaard Aidt

University of Cambridge - Faculty of Economics and Politics

Martin Gassebner

ETH Zurich - KOF Swiss Economic Institute; CESifo (Center for Economic Studies and Ifo Institute)

Multiple version iconThere are 2 versions of this paper

Date Written: August 2007

Abstract

The paper analyzes whether the political regime of a country influences its involvement in international trade. Firstly, we develop a theoretical model that predicts that autocracies trade less than democracies. Secondly, we test the predictions of the model empirically using a panel of more than 130 countries for the years 1962 to 2000. In contrast to the existing literature, we use data on individual importing and exporting countries, rather than a dyadic set-up. In line with the model, we find that autocracies import substantially less than democracies, even after controlling for official trade policies. This finding is very stable and does not depend on a particular set-up or estimation technique.

Keywords: international trade, democracy, autocracy, gravity model

JEL Classification: F13, F14, O24, P45, P51

Suggested Citation

Aidt, Toke Skovsgaard and Gassebner, Martin, Do Autocratic States Trade Less? (August 2007). Cambridge Economics Working Paper No. 0742; KOF Working Paper No. 175. Available at SSRN: https://ssrn.com/abstract=1014802 or http://dx.doi.org/10.2139/ssrn.1014802

Toke Skovsgaard Aidt (Contact Author)

University of Cambridge - Faculty of Economics and Politics ( email )

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Martin Gassebner

ETH Zurich - KOF Swiss Economic Institute ( email )

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Switzerland

HOME PAGE: http://www.kof.ethz.ch/chair/

CESifo (Center for Economic Studies and Ifo Institute) ( email )

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Germany

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