https://doi.org/10.1177/0021909618809394 Journal of Asian and African Studies 1–19 © The Author(s) 2018 Article reuse guidelines: sagepub.com/journals-permissions DOI: 10.1177/0021909618809394 journals.sagepub.com/home/jas J A A S Economic Globalization and Democratic Development in East Asia: The Indirect Link Hayam Kim Department of Political Science, University of Wisconsin-Milwaukee, USA Uk Heo Department of Political Science, University of Wisconsin-Milwaukee, USA; Department of Political Science, Kyung Hee University, South Korea Abstract Over the past decades, East Asian states have enjoyed economic development and progress toward democracy through extensive economic transformation: trade and financial liberalization. To explain the theoretical mechanism of these variables, we investigate the direct and indirect effects of globalization on democratic development via economic development. To this end, a two-equation model is specified and estimated using data from 1972 to 2010 for 12 East Asian countries. The results show that globalization has not only a direct effect, but also an indirect effect on democracy via economic development. Keywords Globalization, democracy, East Asia, economic development Introduction Does economic globalization promote democracy? Scholars and policymakers alike have sought the answer to this question as globalization has shown a gradual upward trend since the 1980s, with a particularly significant increase after the end of the Cold War in 1989 (KOF Swiss Economic Institute, 2018). As a result, there is a plethora of studies that investigate the globalization–democ- racy nexus, leading to three schools of thought on how globalization affects democracy: (1) posi- tive; (2) negative; and (3) insignificant. The positive perspective, often dubbed the “Washington Hypothesis,” is that globalization fosters democracy by reducing the capacity of authoritarian lead- ers to extract rents and strengthening the bargaining power of businesses (Maxfield, 2000). The second position is that globalization may obstruct democracy because it undermines state auton- omy, which makes it difficult for nation-states to act in the interest of their citizens (Peck, 2001). Conversely, another group of scholars argue that globalization does not have a systematic effect on democracy because the effects may vary over countries (Milner and Mukherjee, 2009; Papaioannou and Siourounis, 2008). Corresponding author: Hayam Kim, Department of Political Science, University of Wisconsin-Milwaukee, Milwaukee, WI 53201, USA. Email: hayamkim@uwm.edu 809394JAS 0 0 10.1177/0021909618809394Journal of Asian and African StudiesKim and Heo research-article 2018 Article