Many liberals believe that shared democracy can be a foundation for peace n
ot only directly, but indirectly through increased trade between countries
as well. we test the hypothesis that democratic states will conduct more tr
ade with each other by relating pairs of states' trade to their political r
egime 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 fro
m 1962 to 1989 and for 1,042 dyads from 1973 to 1989. Our results provide s
trong support for the hypothesis that shared democratic polity common langu
age, and openness to trade are associated with higher values of internation
al trade.