Free Trade Agreements and the Consolidation of Democracy†_2014_AEJ英文文献资料.pdf

American Economic Journal: Macroeconomics 2014, 6(2): 29–70 /10.1257/mac.6.2.29 Free Trade Agreements and the Consolidation of Democracy† By Xuepeng Liu and Emanuel Ornelas* We study the relationship between participation in free trade agree- ments (FTAs) and the sustainability of democracy. Our model shows that FTAs can critically reduce the incentive of authoritarian groups to seek power by destroying protectionist rents, thus making democ- racies last longer. This gives governments in unstable democracies an extra motive to form FTAs. Hence, greater democratic instability induces governments to boost their FTA commitments. In a data- set with 116 countries over 1960–2007, we find robust support for these predictions. They help to rationalize the rapid simultaneous growth of regionalism and of worldwide democratization since the late 1980s. (JEL D72, F13, F15, O19, O24) “Striking down trade barriers is critical to sustaining democracy […] throughout the region.” — Former US President George W. Bush at the 2001 summit of the potential signatories of the Free Trade Area of the Americas (New York Times, 4/18/2001) When the United States formally announced the intention to pursue a free trade agreement with Central American countries, one explicit goal was “to sup- port democracy” in the region (/news/ releases/2002/0111.html). Indeed, the establishment of new de