Many liberals believe that shared democracy can be a foundation for peace not only directly, but indirectly through increased trade between countries as well. We test the hypothesis that democratic states will conduct more trade with each other by relating pairs of states' trade to their political regime type, official language, openness to trade, alliance status, and the presence of militarized disputes, as well as to the states' gross domestic product and the distance between them. We report analyses for 882 dyads from 1962 to 1989 and for 1,042 dyads from 1973 to 1989. Our results provide strong support for the hypothesis that shared democratic polity, common language; and openness to trade are associated with higher values of international trade.
This document examines the various roles the World Bank has played in reconstruction efforts in post conflict countries.