Business, Government & the International Economy
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- July 2025
- Article
Economic Integration and the Transmission of Democracy
By: Marco Tabellini and Giacomo MagistrettiIn this paper, we study the effects of economic integration with democratic partners on democracy. We assemble a large country-level panel dataset from 1960 to 2015, and exploit improvements in air, relative to sea, transportation to derive a time-varying instrument for economic integration. We find that economic integration with democracies increases countries’ democracy scores, whereas the impact of economic integration with non-democracies is muted. Results are stronger when democratic partners have a longer history of democracy, grow faster, spend more on public goods, are culturally closer, and export higher quality goods. The effects we document are driven by imports, rather than exports, and by integration with democratic partners that account for a larger share of a country’s trade in institutionally intensive, cultural, and consumer goods, as well as in goods that involve more face-to-face interactions and entail higher levels of bilateral trust. These patterns are consistent with economic integration favoring the transmission of democracy by signaling the (actual or perceived) desirability of democratic institutions. Alternative mechanisms—including human capital accumulation and economic growth—cannot, alone, explain our findings.
- July 2025
- Article
Economic Integration and the Transmission of Democracy
By: Marco Tabellini and Giacomo MagistrettiIn this paper, we study the effects of economic integration with democratic partners on democracy. We assemble a large country-level panel dataset from 1960 to 2015, and exploit improvements in air, relative to sea, transportation to derive a time-varying instrument for economic integration. We find that economic integration with democracies...
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- June 2025
- Case
That's Bananas! Art, Value and Our Capitalist way of Life
By: Sophus A. Reinert and Rafael Di Tella- June 2025
- Case
That's Bananas! Art, Value and Our Capitalist way of Life
By: Sophus A. Reinert and Rafael Di Tella -
- 2025
- Working Paper
Public Displays of Alignment: Firm Speech in Autocratic Regimes
By: Joris Mueller, Jaya Y. Wen and Cheryl WuPolitical speech by firms is increasingly common around the world. This paper examines the government as an important, yet understudied, audience for such speech, focusing on how Chinese firms rhetorically align with the state. We introduce novel, general, and replicable quantitative measures of rhetorical alignment, using which we establish several empirical facts: (i) rhetorical alignment is prevalent but not universal; (ii) it has increased significantly over time; (iii) it is more pronounced in state-owned and strategic sectors; and (iv) it is negatively correlated with profitability and positively correlated with performance on political and social objectives. Exploiting two natural experiments, we further show that (v) rhetorically aligned firms experience larger stock price declines following events damaging the Party’s reputation, and (vi) firms increase rhetorical alignment after regulatory inspections. Guided by these findings, we propose a conceptual framework wherein rhetorical alignment serves as a commitment device: firms commit to supporting Party interests, and the Party commits to refraining from expropriation. Additional predictions of the framework are tested and supported by the data.
- 2025
- Working Paper
Public Displays of Alignment: Firm Speech in Autocratic Regimes
By: Joris Mueller, Jaya Y. Wen and Cheryl WuPolitical speech by firms is increasingly common around the world. This paper examines the government as an important, yet understudied, audience for such speech, focusing on how Chinese firms rhetorically align with the state. We introduce novel, general, and replicable quantitative measures of rhetorical alignment, using which we establish...
About the Unit
The BGIE Unit conducts research on, and teaches about, the economic, political, social, and legal environment in which business operates. The Unit includes scholars trained in economics, political science, and history; in its work, it draws on perspectives from all three of these disciplines.
The following demonstrates one way of classifying the approaches the Unit takes to learning and teaching.
- The Unit examines the “rules” and policies established by government and other non-business institutions that affect business in the United States.
- The Unit turns to history to understand the origins of today’s business environment as well as some of the alternatives that have emerged from time to time.
- The Unit examines other countries’ business environments and their historical development.
- The BGIE group is deeply interested in the impact of globalization and the way rules are emerging to govern international economic transactions as globalization proceeds.
Recent Publications
Economic Integration and the Transmission of Democracy
- July 2025 |
- Article |
- Review of Economic Studies
That's Bananas! Art, Value and Our Capitalist way of Life
- June 2025 |
- Case |
- Faculty Research
Public Displays of Alignment: Firm Speech in Autocratic Regimes
- 2025 |
- Working Paper |
- Faculty Research
Integral Outside: The Financial Curb Market, the Electric Telegraph, and the Politics of Pricing in Second Empire France
- June 2025 |
- Article |
- Journal of Modern History
Liz Truss and the Thatcher Legacy: Markets and Fiscal Dominance in the United Kingdom
- May 2025 |
- Teaching Note |
- Faculty Research
The Global Strategic Maple Syrup Reserve
- May 2025 |
- Case |
- Faculty Research
Argentina’s Disinflation: An International and Historical Perspective
- May 2025 |
- Article |
- Quarterly Review - Federal Reserve Bank of Minneapolis
Brazil's Messias? The Lava Jato Corruption Scandal, the Recession, and the Rise of Bolsonaro
- May 2025 |
- Teaching Note |
- Faculty Research
Harvard Business Publishing
Seminars & Conferences
There are no upcoming events.