Does integration into international markets and political co-operation help to build democracy? This question is motivated by an interesting empirical observation: between 1950 and 2000 the magnitude of international trade and co-operation increased rapidly while the majority of the observed regime transitions did not establish democratic rule but various types of authoritarianism. The study employs a game theoretic model that explicitly accounts for democratization and developments towards authoritarianism. Additionally it suggests utilizing an unconventional measure of regime change that considers positive and negative meaningful institutional changes as well as minor alterations. By applying various regression models it can be shown that strongly integrated authoritarian regimes are less likely to develop towards democracy. While less integrated regimes rather democratize, increasing levels of integration into global markets are likely to stabilize authoritarianism. Moreover, if integrated regimes alter, they are more likely to shift towards stricter authoritarianism. The findings motivate to rethink the common academic and political perception that international co-operation and integration foster democratization. The results of this examination strongly question the efficiency of policies that rely on this perception.
