Global sources of credibility: production integration, international institutions, and private property rights in authoritarian regimes

Abstract

Abstract An important field of the political economy literature examines the mechanism of property rights commitments in authoritarian regimes where formal political constraints are absent. While many of the existing studies focus on how domestic autocratic institutions shape the formation of property rights regimes, this paper takes an open-economy approach and examines the compound effect of global economic integration and intergovernmental organizations (IGOs) on property rights protection in authoritarian regimes. We propose that the domestic presence of foreign factors of production is positively associated with more credible property rights commitments in authoritarian economies. Moreover, this association is moderated by authoritarian regimes' participation in institutionalized IGOs, which enhance the organizational capacity of these foreign owners of production factors. Through the transnational networks of production integration, international institutions indirectly alter the domestic distribution of bargaining power between the authoritarian government and private economic actors, rendering the commitment to property rights protection more credible. An analysis of a panel dataset consisting of 105 authoritarian regimes yields preliminary evidence supporting our proposition.