The Politics of Preferential Trade Liberalization in Authoritarian Countries

Abstract

While autocracies constitute a third of all signatories of preferential trade agreements (PTAs), very little research has explained why some autocrats join PTAs while others do not. We argue that this variation reflects the leader’s degree of vulnerability to elite-led coups during leadership change–whether a leader enters power legally or extralegally. New extralegal leaders are more vulnerable than new legal leaders, which encourages extralegal leaders to use PTAs to both build support from exporters and pressure disloyal importers. We test our hypotheses using a dyadic data set of 120 autocracies from 1960 to 2014. Our results show that extralegal leaders sign more and deeper PTAs than legal leaders. Moreover, we find that extralegal leaders with a high risk of coups are more likely to form deep PTAs than extralegal leaders with a low risk of coups. In line with our argument, we also provide evidence that extralegal leaders sign trade agreements that are likely to be enforced. Our article has implications for the political economy of trade and for development studies.