Journal Article

Democracies Cooperate More - Even Where It Threatens to Bite?


  • Hühne
  • P.
  • Nunnenkamp
  • P.
  • Meyer
  • B.
  • Roy
  • M.
Publication Date

Estimating two-step selection models, we find that more democratic governments are more likely to conclude preferential trade agreements (PTAs) and to agree to stricter investment provisions related to pre-establishment national treatment and investor-state dispute settlement in PTAs. This is surprising when considering the potentially high costs of litigation.


JEL Classification
F13, F42

Key Words

  • democracy
  • investor-state dispute settlement
  • national treatment
  • preferential trade agreements (PTA)