Economic Integration and the Transmission of Democracy

134 Pages Posted: 25 Jul 2018 Last revised: 3 Feb 2023

See all articles by Marco Tabellini

Marco Tabellini

Harvard Business School

Giacomo Magistretti

Northwestern University

Multiple version iconThere are 2 versions of this paper

Date Written: January 2023


In this paper, we study the effects of economic integration with democracies on individuals’ democratic values and on countries’ institutions. We combine survey data with country level measures of democracy from 1960 to 2015, and exploit improvements in air, relative to sea, transportation to derive a time-varying instrument for trade. We find that economic integration with democracies increases both citizens’ support for democracy and countries’ democracy scores. Instead, trade with non-democracies has no impact on either attitudes or institutions. The effects of trade with democracies are stronger when partners have a longer history of democracy, grow faster, spend more on public goods, and are culturally closer. They are also driven by imports, rather than exports, and by integration with partners that export higher quality goods and that account for a larger share of a country’s trade in institutionally intensive, cultural, and consumer goods as well as in goods that involve more face-to-face interactions and entail higher levels of bilateral trust. These patterns are consistent with trade in goods favoring the transmission of democracy by signaling the (actual or perceived) desirability of the latter. We examine alternative mechanisms, and conclude that none of them can, alone, explain our findings.

Keywords: Democracy, political preferences, institutions, economic integration

JEL Classification: F14, F15, P16.

Suggested Citation

Tabellini, Marco and Magistretti, Giacomo, Economic Integration and the Transmission of Democracy (January 2023). Harvard Business School BGIE Unit Working Paper No. 19-003, Available at SSRN: or

Marco Tabellini (Contact Author)

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Giacomo Magistretti

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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