When do Dictators Decide to Liberalize Trade Regimes? Inequality and Trade Openness in Authoritarian Countries

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Author: Wen-Chin Wu
Date: Dec. 2015
From: International Studies Quarterly(Vol. 59, Issue 4)
Publisher: Wiley Subscription Services, Inc.
Document Type: Report
Length: 243 words

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Byline: Wen-Chin Wu This paper investigates how authoritarian leaders employ trade openness as a response to rising inequality. Based on the Heckscher-Ohlin model of international trade and models of democratic transition, I argue that unskilled laborers in authoritarian regimes can benefit from engaging in international trade, thus becoming more compliant to the authoritarian rules as their countries integrate into the world economy. Therefore, dictators in labor-abundant countries expand trade to neutralize democratization threats initiated by rising inequality. My argument uses supporting data from around eighty authoritarian regimes during the period from 1963 to 2003. I address endogeneity problems with dynamic panel data and instrumental variable regression models in this paper. My analyses suggest that economic globalization helps strengthen authoritarian regimes. Article Note: Author's notes: I am grateful to several anonymous reviewers and the ISQ editor for their constructive comments. I wish to thank the following people for their helpful feedback on earlier drafts: Eric Chang, Cristina Bodea, Seo Youn Choi, Sung Min Han, Shih-Hao Huang, Daniel Kono, Jason Kuo, Helen Lee, Hsin-Hsin Pan, Corwin Smidt, Susan Chun Zhu, and participants in the 2011 IPES meeting. Replication files and online appendices of this article are available at the ISQ website. [Corrections added after initial online publication on July 31, 2014: The author's biography has been updated.] CAPTION(S): Appendix S1. List of Authoritarian Regimes. Appendix S2. Summary Statistics. Appendix S3. Determinants of Tariff Rates Under Dictatorships. Appendix S4. Predicted Probability of Trade Openness Under Dictatorships.

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Gale Document Number: GALE|A439973063