The Impact of International Institutions on Bilateral Trade: Economic and Political

This study aims to contribute to drawing a more complete picture of the role of multilateral economic and political institutions. Particularly, we pursue answers to questions such as how much influence participation in multilateral trade arrangements and military alliance has on bilateral trade of the states involved. Our results show that political institutions, set apart from trade issues, do affect bilateral trade--even though these effects are demonstrably smaller than those that occur within economic institutions. Military disputes between two states are sure to decrease bilateral trade, while joint democracy and policy similarity between two states, although moderate, increase bilateral trade, but military alliance is indeterminate.