Does Strengthening the Rule of Law Foster Trade Openness in the Organization for Security and Co-Operation in Europe and Other European Countries?

Abstract

Transparent, stable, and open trade policies are essential for fostering economic growth, resilience, and addressing critical global issues such as climate change, food security, and underdevelopment. This study examines the impact of the rule of law, financial inclusion, economic growth, and inflation on trade within the Organization for Security and Co-operation in Europe and European countries. The results show that a strong positive relationship between the rule of law and trade in both groups of countries is maintained across nearly all quantiles. Additionally, economic growth has a consistently positive association with trade in both regions. However, financial inclusion negatively affects trade from the second to the sixth quantiles according to the Method of Moments Quantile Regression econometric method. Inflation, on the other hand, does not exhibit a significant relationship with trade. Consequently, both the Organization for Security and Co-operation in Europe and European countries should make the rule of law, economic growth, and financial inclusion focal points of their trade policies. This study provides important insights that can inform policy decisions in these regions. © 2025 American Journal of Economics and Sociology, Inc.