The Coevolution of Trade Agreement Networks and Democracy

Abstract

The proliferation of preferential trade agreements (PTAs) and the wave of democratization are among the most significant developments in international relations during the past three decades. The correlation between these is well noted. The causal link between these phenomena, however, remains unclear. On one hand, democracies have been found to be more likely to join PTAs. On the other hand, trade agreements should foster democratization because they undermine the ability of governments to distribute rents to maintain an autocratic regime. If PTAs and democracy coevolve through a selection and a contagion effect, then conventional statistical techniques can produce wholly misleading results. This article presents a new approach based on recent advancements in longitudinal network analysis. Our findings confirm that historically, democratization indeed made states more likely to sign PTAs, but that trade agreements also encourage the democratization of a country, in particular if the PTA partners are themselves democracies.