Trends in Travel Freedom: The Effect of Travel Freedom on Economic Growth and Democracy

Over the past decade, travel freedom has expanded precipitously thanks to the rising number of bilateral visa-waiver agreements and unilateral decisions implemented by governments. In 2006, a citizen, on average, could travel to 58 destinations without needing a visa from the host nation; by 2018, this number had nearly doubled to 107.

Yet despite the important progress made in overall global mobility, there remains a significant ‘global mobility divide’, with some passports much more powerful than others. For instance, in 2018, the average European could travel to about 163 destinations without a visa, while the average individual from Africa could travel to only about 61 destinations.

Notwithstanding this apparent gap, many developing nations — with the notable exception of some Sub-Saharan countries — have significantly increased their visa-free access over time. A few countries in particular stand out: Albania has increased its total number of visa-free destinations more than six-fold (from 17 in 2006 to 114 in 2018), while countries such as Bosnia and Herzegovina, Serbia, China, and Colombia have more than quadrupled their visa-free access over time.

Visa-waivers ease restrictions on international travel by granting citizens of certain countries and territories the right to travel without prior permission by the host. While some of these waivers are one-sided (that is, one country opening up its borders), others are reciprocal.

Research has shown that visa-free access increases the number of travelers to the visa-free destination country. In contrast, visa requirements have a negative effect on the number of inbound travelers. Scholars have pointed out that, “[a]t the bilateral level, having a travel visa requirement on a particular country is associated with a 70% reduction in inbound travel from that country”.

The number of visa-free destinations held by a sender country has a positive and statistically significant effect on that country’s democracy score.

Beyond tourism, countries such as Japan and Taiwan have recently relaxed travel and residence requirements in the hope of attracting a skilled workforce. A number of European nations, among them Portugal and Greece, have set up ‘golden visa’ programs as a way to revitalize their economies through foreign investment and capital inflow.

What is the effect of visa liberalization on economy and politics? It is estimated that the spread of ‘open door’ policies could potentially contribute to the global economy by generating USD 206 billion in additional tourism revenue and creating as many as 5.1 million jobs.

Yet most existing empirical studies on the effect of visa liberalization are based on the analysis of one or two cases. There is little cross-national evidence on how the rising number of visa-free destinations has affected countries’ economies and, to date, no empirical study that addresses the question of its effect on democracy.

Our research used regression analysis to measure the effect of a country’s number of visa-free destinations on its democracy score and GDP per capita, within a global sample.

We drew the data on visa-waivers from the Henley Passport Index, which compiles the number of visa-free destinations for each country and territory, with data going back to 2006. For the economic variables, we relied on the World Bank, and for the data on democracy, we relied on the Polity data series, which records each country’s democracy score on a scale from –10 (autocracy) to +10 (democracy).

The effect of travel freedom on sender countries’ democracy levels

Based on our preliminary analysis, we found that the number of visa-free destinations held by a sender country has a positive and statistically significant, albeit non-linear, effect on that country’s democracy score (see Figure above).

By minimizing the risk of reverse causality, we were able to rule out the possibility that higher levels of democracy are the cause of high levels of travel freedom, as might generally be assumed.

Indeed, when we tested whether countries’ visa-free scores were affected by changes in their democracy scores, we found no significant relationship, which suggested that the causal arrow points from visa-free travel to democracy, rather than the other way around.

When we increased the number of visa-free destinations from 0 to 150, a country’s predicted democracy score increased from approximately 3.0 to 5.0, with other variables held constant. However, any further increase did not seem to have a positive effect on democracy. Increases in visa-free score also did not have a significant effect on a country’s economic indicators, such as GDP per capita.

There are several possible explanations for the somewhat surprising findings outlined above. For one, democracy is generally thought to be ‘contagious’. It has been argued that democratization is rarely a purely domestic phenomenon, and that cross-border diffusion plays a very important role in its development. One of the pathways through which diffusion occurs is ‘learning’ from other cases through communication and informational networks. It is possible that increased cross-border interactions thanks to visa-free travel can contribute to this learning process.

Furthermore, individuals who are exposed to different cultures may be more tolerant at home. There is a long line of research on the prejudice-reducing effect of inter-group contact. It has been generally found that contact with ‘out-groups’ fosters empathy and reduces bias under certain conditions.

Visa-waivers can also facilitate cooperation between civil society groups and NGOs, including those that specialize in democracy promotion. Finally, visa liberalization can facilitate scientific and academic exchanges. It has been found that foreign-educated individuals have a positive impact on a country’s democracy, especially when they study in democratic countries.

One important avenue for further research is the disaggregation of visa-free destinations. After all, not all destinations are equal. For instance, destinations that are more liberal and democratic may have a larger impact on the sender’s political system than non-democracies do.

Notwithstanding these issues, this study constitutes an important first step and will, we hope, precipitate a timely debate about the political effects of various visa policies.

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