Jeffrey Frankel
This project is an econometric study across countries of the determinants of several measures of the level of democracy. The focus will be on two international dimensions: openness to trade and openness to migration. The first question is whether countries that engage in more trade, and more movement of people across borders, are also on average more democratic. One might expect that openness in the sense of low barriers to economic transactions with the rest of the world would lead to openness in the sense of an open democratic society. But even if such a correlation is supported by the data, we want to look much harder at the direction of causality.
One possibility is reverse causality, running from democracy to international openness instead of the other way around: a government that allows its people a lot of freedom domestically could find it hard to limit their ability to enter into voluntary transactions with those in other countries. A democratic society could not have built the Berlin Wall to keep people from leaving, or cut itself off from trade the way Albania and Burma did in the 1970s and 1980s. Another possibility is that trade and migration have positive effects on democracy, but that these effects are entirely mediated by income. The argument would be that trade is one important source of economic growth, and that economic growth eventually leads people to want democracy -- look at the evolution of Korea and Taiwan -- but it is conceivable that an outward-oriented development strategy does not lead to democracy any faster than any other strategy that delivers the same economic growth. These are propositions worth testing. We hope to address the causality issues, by looking at geographic determinants of trade.