Does economic openness affect liberal and electoral democracy in a different way? Empirical evidence from developing countries

Abstract

The focus of this paper was to empirically analyze the impacts of economic liberalization on the liberal and electoral democracy in a sample of 106 less developed and developing countries over the period 1970-2016. The economic relationship between these countries and the global trade and the financial system generates a crucial question of to what extent political conditions are affected by this changing relation. To test these relationships, this paper uses V-Dem's liberal democracy and electoral democracy indices and nine economic liberalization variables. Utilizing two-step system dynamic panel GMM estimation indicates that trade openness and economic globalization, de facto strongly affects electoral democracy.