Economic Integration and the Transmission of Democracy

82 Pages Posted: 25 Jul 2018 Last revised: 11 Jan 2022

Multiple version iconThere are 2 versions of this paper

Date Written: January 03, 2022

Abstract

In this paper, we study if exposure to the institutions of trade partners changes individuals' attitudes towards democracy and favors the process of democratization. We combine survey data with country-level measures of democracy from 1960 to 2015, and exploit the improvement in air, relative to sea, transportation to derive a time-varying instrument for trade. Relying on within-country variation across cohorts, we find that individuals who grew up when their country was more integrated with democracies are, at the time of the survey, more supportive of democracy. Reflecting the change in citizens' preferences, economic integration with democratic partners has a large, positive effect on a country's democracy score. Instead, economic integration with non-democratic partners has no impact either on individuals' attitudes or on countries' institutions. We provide evidence consistent with the transmission of democratic capital from more to less democratic countries.

Keywords: Democracy, political preferences, institutions, economic integration

JEL Classification: F14, F15, P16.

Suggested Citation

Magistretti, Giacomo and Tabellini, Marco, Economic Integration and the Transmission of Democracy (January 03, 2022). Harvard Business School BGIE Unit Working Paper No. 19-003, Available at SSRN: https://ssrn.com/abstract=3220028 or http://dx.doi.org/10.2139/ssrn.3220028

Giacomo Magistretti

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Marco Tabellini (Contact Author)

Harvard Business School ( email )

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

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