IDEAS home Printed from https://ideas.repec.org/p/ags/ubzefd/18729.html
   My bibliography  Save this paper

Open Borders, Open Regimes? Testing Causal Direction Between Globalization And Democracy, 1970-2000

Author

Listed:
  • Burkhart, Ross E.
  • de Soysa, Indra

Abstract

Pessimists on globalization claim that liberalization of markets allows multinational corporations free reign, constraining local autonomy and precipitating a "race to the bottom" that will endanger recent democratic gains. The optimists see the end of dirigiste economic models as favorable for political liberalization, envisioning foreign direct investment (FDI) as one way in which to transfer wealth to poor societies, leading to democracy. The most recent literature assesses this debate using FDI flows. We believe that FDI stocks is a superior variable, and captures the underlying idea of "saturation point" better. We create models of democracy and use estimates of FDI stock for 107-120 countries over the 1970-2000 time period as a principal control variable. We find that FDI Granger-causes democracy to a greater degree than the other way around. Cross-sectional time-series results show FDI's effect on democracy to be robust, independent of trade, income, urbanization, and historical and institutional factors. Trade is positively, but weakly, associated with democracy as well. It seems that poor countries stand to gain much from interdependence with the rich. The problem with globalization may be that it has not gone far enough.

Suggested Citation

  • Burkhart, Ross E. & de Soysa, Indra, 2003. "Open Borders, Open Regimes? Testing Causal Direction Between Globalization And Democracy, 1970-2000," Discussion Papers 18729, University of Bonn, Center for Development Research (ZEF).
    • Handle: RePEc:ags:ubzefd:18729
    DOI: 10.22004/ag.econ.18729
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/18729/files/dpdp0067.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.18729?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Political Economy;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ubzefd:18729. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/zefbnde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.