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The Role of Democracy and Governance in the Enhancement of Indonesian Exports to the Organization of the Islamic Cooperation (OIC) Countries

Author

Listed:
  • Aditya Rangga Yogatama
  • Fithra Faisal Hastiadi

    (Department of Economics, Faculty of Economics and Business, University of Indonesia)

Abstract

The formulation of new OIC Charter at the 11 th OIC Summit in Dakar, 2008, has became the momentum for OIC countries to reassert the importance of democracy and institutional reform in promoting economic and trade cooperation among its members. This study aims to explore the role of democracy and governance in the enhancement of Indonesian exports to the OIC countries during 1998-2012 using augmented gravity model. The results showed that both democracy and governance in Indonesia have positive and significant effect in enhancing Indonesian exports to the OIC countries. While the governance in OIC countries also has positive and significant effect in improving Indonesian exports. On the other hand, democracy in OIC countries has negative and significant effect on the same matter, because lower income OIC countries tend to implement closed trade policy.

Suggested Citation

  • Aditya Rangga Yogatama & Fithra Faisal Hastiadi, 2015. "The Role of Democracy and Governance in the Enhancement of Indonesian Exports to the Organization of the Islamic Cooperation (OIC) Countries," Working Papers in Economics and Business 201504, Faculty of Economics and Business, University of Indonesia, revised Jul 2015.
    • Handle: RePEc:lpe:wpecbs:201504
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Democracy; Governance; Exports; Indonesia; OIC;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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