The Role of Democracy and Governance in the Enhancement of Indonesian Exports to the Organization of the Islamic Cooperation (OIC) Countries

Select Language: Indonesia

Aditya Rangga Yogatama
Fithra Faisal Hastiadi


The formulation of new OIC Charter at the 11thOIC Summit in Dakar, 2008, has became the momentum for OIC countries to reassert the importance of democracy and institutional reform in promoting economic and trade cooperation among its members. This study aims to explore the role of democracy and governance in the enhancement of Indonesian exports to the OIC countries during 1998-2012 using augmented gravity model. The results showed that both democracy and governance in Indonesia have positive and significant effect in enhancing Indonesian exports to the OIC countries. While the governance in OIC countries also has positive and significant effect in improving Indonesian exports. On the other hand, democracy in OIC countries has negative and significant effect on the same matter, because lower income OIC countries tend to implement closed trade policy.



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