Why Trading with Dictators May Nevertheless Help the People: On the Interplay between Trade, Political Regimes and Economic Institutions

Research output: Working paper


Recent empirical studies confirm a positive relationship between trade liberalization or trade openness and the quality of domestic economic institutions. An isolated analysis of trade openness per se, however, may grossly simplify the mechanisms at work, as the linkage between open trade and quality of economic institutions is likely to vary for different political regimes. This study examines the causal relationship between trade openness and quality of economic institutions under different political institutions. We find that in the presence of extractive political institutions, the effect of trade openness on economic institutions is reduced significantly.


  • Usman Khalid
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Economics


  • trade openness, political institutions, economic institutions, institutional change
Original languageEnglish
PublisherDepartment of Economics, Lund Universtiy
Number of pages36
Publication statusPublished - 2015
Publication categoryResearch

Publication series

NameWorking Paper / Department of Economics, School of Economics and Management, Lund University