Openness and Democracy: Some Evidence from Pakistan

The paper empirically examines the relationship between trade openness and the level of democracy in Pakistan using annual time-series data for the period 1947-2009. The analysis shows that trade openness positively affects democracy in Pakistan. The results are robust to controlling for other democracy determining variables and various model specifications. The results also show that the effect of trade openness on democracy increases with the increase of the economic development. Other control variables, i.e. political constraints, human capital, government expenditures, physical capital, inflation and urbanization significantly affect democracy in the theoretically expected directions.