Economic Liberalism in Illiberal Regimes: Authoritarian Variation and the Political Economy of Trade¹

Abstract

Over the last few decades, a vast literature has emerged examining the relationship between democratic political institutions and trade policy outcomes. While this literature has added significantly to our knowledge, it has effectively ignored policymaking in dozens of important states-those that remain autocratic. This paper fills that hole by exploring the effects of authoritarian variation on national trade policies. Our contention is that more institutionalized authoritarian regimes will tend to adopt more open trade policies. This relationship should hold, we argue, for two distinct reasons. First, we argue that autocratic regimes with larger ''selectorates'' should have greater incentives to provide public rather than private goods. As a result, we expect that multiparty, and to a lesser extent single-party, autocracies will tend to prefer more open trade policies than non-party (often personalistic) dictatorships, monarchies, and military juntas. Second, we contend that more stable autocratic regimes will have longer time horizons and therefore greater incentives to adopt policies, such as trade openness, that may strengthen long-run economic performance. We find strong support for these arguments using several cross-national time-series models of all autocracies ranging from 1962 to 2007 (contingent on data availability).Over the last few decades, a vast literature has emerged examining the relationship between democratic political institutions and trade policy outcomes. While this literature has added significantly to our knowledge of the politics of commercial openness, it has effectively ignored policymaking in dozens of important states-those that remain autocratic. Despite the recent waves of democratization, it is apparent that authoritarian regimes will not become relics in the near future, so it remains important to improve our understanding of their economic behavior. This paper seeks to do that by drawing on recent scholarship in comparative politics to explore the effects of authoritarian variation on national trade policies.For the purposes of this study, we define authoritarian regimes as those in which the primary decision makers cannot be removed from power by democratic means. Scholars of comparative political institutions have divided authoritarian regimes into a variety of subcategories, including military juntas, personalistic dictatorships, monarchies, single-party regimes, and multiparty authoritarian regimes (Geddes 1999;Hadenius and Teorell 2007). Our contention is that the more institutionalized types of authoritarian regimes will tend to adopt more open trade policies. This relationship should hold, we argue, for two distinct reasons. First, more institutionalized autocracies will tend to incorporate more dissenting voices into the governing process, increasing the size of their ''selectorates'' (Bueno de Mesquita, Smith, Siverson, and Morrow 2003; Kim and Gandhi 2010). Leaders who must satisfy a large number of constituents in order to stay in power will find it difficult to pay ...

Trade Interests in Foreign Policy of the Global South

“…It is important underline that authoritarian regimes do not behave similarly to one another with regard to their trade policies and it is a mistake to consider such regimes as identical (Hankla & Kuthy, 2013). Hadenius and Teorell (2007) found that multiparty regimes have significantly lower levels of trade protectionism than single-party autocracies, monarchies, non party regimes, and military juntas.…”

“…Instead their focus will be providing immediate benefits to their supporters in order to remain in power. As a consequence, the leaders of more stable autocratic regimes will be more likely to provide the public good of free trade, while those whose hold on power is precarious will tend to rely on particularistic goods such as protectionism to keep their winning coalition intact (Hankla & Kuthy, 2013).…”

“…They find that in post-communist East-Central Europe, both democracies and autocracies with more veto players also enjoyed freer trade. This link, they believe, is a product of incorporated a wider variety of voices into policymaking, thereby reducing the ability of governments to depend on patronage to stay in power (Hankla & Kuthy, 2013).…”

“…Therefore, the pressure for protectionism in an attempt to gain short-term support in new unstable regimes is likely to be even greater for authoritarian governments than for those in a democracy. Additionally, truly stable authoritarian regimes tend to have individual leaders with very long time horizons (far beyond those of stable democratic leaders), providing them with stronger incentives to choose policies, like free trade, that may contribute to long-run economic growth (Hankla & Kuthy, 2013).…”

“…In the case using these data, it can expect that single party regimes will tend to have more liberal trade policies than other authoritarian regime types. For the test using the Hadenius and Teorell (2007) data, it can expect that multiparty regimes will tend to have more liberal trade policies in comparison with any of the other four regime types (single-party, military, monarchy, and personal regimes) (Hankla & Kuthy, 2013).…”