Space is more than geography: Using spatial econometrics in the study of political economy

Although spatial econometrics is being used more frequently in political science, most applications are still based on geographic notions of distance. Here we argue that it is often more fruitful to consider political economy notions of distance, such as relative trade or common dyad membership. We also argue that the spatially autoregressive model usually (but not always) should be preferred to the spatially lagged error model. Finally, we consider the role of spatial econometrics in analyzing time-series-cross-section data, and show that a plausible (and testable) assumption allows for the simple introduction of space (however defined) into such analyses. We present examples of spatial analyses involving trade and democracy.