Why Democracies Cooperate More: Electoral Control and International Trade Agreements

Leaders in democracies have a greater incentive to pursue international cooperation in trade than do their nondemocratic counterparts. In commercial matters, democracies are more cooperative than are other states because of the domestic political benefits that can be generated by international trade agreements. The chapter shows that the model indicates that the probability of a trade agreement being signed by two countries increases as either country becomes more democratic. If the election’s outcome is binding, the regime is a pure democracy. If, on the other hand, the executive retains office irrespective of the voters’ decision, the regime is a pure autocracy. Voters base their electoral decision only on the information available to them, implying that they may reject executives for events that are beyond the executives’ control. The economy is small, the executive can choose trade barriers without being able to affect world prices and hence other countries policy decisions, and vice versa.