Free Trade and Forms of Democratization

Abstract

How do democratic transitions affect trade policy? A well-known finding is that transitions in developing countries produce lower tariff rates. But prior work implicitly assumes that all forms of democratic transitions are alike. There is less reason to expect trade liberalization to follow transitions led by political elites, which constitute roughly half of all democratic transitions in recent decades. Analysis of industry-level tariff rates indicates that elite-led transitions are not consistently followed by trade liberalization, while transitions initiated by the general public are associated with tariff rate reductions.