The Balance of Power and Design of Democracy-Related Clauses in Trade Agreements

• In Event: What Trade Agreements Accomplish

Abstract

The idea that democracies can use trade as a mean to export their model of democracy has been around for a long time. Despite many autocracies signing onto Preferential Trade Agreements (PTAs), the evidence is mixed about the design and effects of democracy-promoting clauses in PTAs. This paper investigates why we observe variation when it comes to incorporating democracy-promoting clauses in PTAs at first. I argue that ambitious clauses are a result of the negotiation power differentials in favour of democracies. I analyse over 800 PTAs signed since 1948 and develop a novel measurement of democracy-promoting clauses using text-as-data methods. I estimate how the interaction effects of regime type and bargaining power account for the design of democracy-related trade provisions using probability regressions. I find that autocracies are less likely to sign democracy-related clauses when they have more bargaining power relative to their democratic trade partners. This bargaining power effect is stronger when the autocratic partner is a single-party autocracy and when the democratic partner is a long-established democracy. These results show that the bargaining at play in the negotiations and the resulting agreements' design could explain different effects on countries’ democratisation, beyond the direct channel of trade flows.

Author

• Marine Roux