Trade Openness and Democracy: The Case of Gabon

Abstract

This article analyzes the relation between trade openness and democracy in Gabon. Unlike traditional approaches based on the estimation of linear gravity models, we first estimate a nonlinear model characterizing the relation between democracy and trade openness. We then determine an optimal threshold beyond which democracy has a positive effect on trade openness in Gabon.

The Effect of Economic Openness, Democracy, and Institutional Quality on Indonesia Exports to ASEAN Plus Three

“…After several countries join as members of the trade bloc who want a commitment to open the economy and remove trade barriers to exports and imports from fellow members, they will come into contact with a reality of each country's uniqueness namely the applied political system that influences trade as evidenced by research Mansfield et al (2000), Duc Cindy et al (2004), Milner and Kubota (2005), and Yu (2010) that democratic state pairs have trade relations that are more open than mixed state pairs (democracy with autocracy) because democratic countries are obstacles lower trade. This conclusion is reinforced by Assoumou Ondo (2017) finding that improvements in democratization make a country (Gabon a sample of countries studied) more open to trade so that trade cooperation with partner countries is freer. Even democratization can increase trade significantly by contributing around 3% to 4% to the growth of bilateral trade as the result of Yu's (2010) research.…”