The Democratic Transition. A study of the causality between income and the Gastil democracy index
AbstractThe paper considers the transformation of the political system as countries pass through the Grand Transition from a poor developing country to a wealthy developed country. In the process most countries change from an authoritarian to a democratic political system. This is shown by using the Gastil democracy index from Freedom House. First, the basic pattern of correlations reveals that a good deal of the short- to medium-run causality appears to be from democracy to income. Then a set of extreme biogeographic instruments is used to demonstrate that the long-run causality is from income to democracy. The long-run result survives various robustness tests. We show how the Grand Transition view resolves the seeming contradiction between the long-run and the short- to medium-run effects.
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Bibliographic InfoPaper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 2008-15.
Date of creation: 21 Oct 2008
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Paths of development; democracy; biogeography;
Other versions of this item:
- Martin Paldam & Erich Gundlach, 2008. "The Democratic Transition. A study of the causality between income and the Gastil democracy index," Kiel Working Papers 1459, Kiel Institute for the World Economy.
- B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-10-28 (All new papers)
- NEP-CDM-2008-10-28 (Collective Decision-Making)
- NEP-DEV-2008-10-28 (Development)
- NEP-POL-2008-10-28 (Positive Political Economics)
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- Erich Gundlach & Martin Paldam, 2008.
"A farewell to critical junctures: Sorting out long-run causality of income and democracy,"
Economics Working Papers
2008-04, School of Economics and Management, University of Aarhus.
- Gundlach, Erich & Paldam, Martin, 2009. "A farewell to critical junctures: Sorting out long-run causality of income and democracy," European Journal of Political Economy, Elsevier, vol. 25(3), pages 340-354, September.
- Erich Gundlach & Martin Paldam, 2008. "A Farewell to Critical Junctures: Sorting Out Long-run Causality of Income and Democracy," Kiel Working Papers 1410, Kiel Institute for the World Economy.
- Gundlach, Erich & Paldam, Martin, 2009.
"The transition of corruption: From poverty to honesty,"
Elsevier, vol. 103(3), pages 146-148, June.
- Erich Gundlach & Martin Paldam, 2008. "The Transition of Corruption: From Poverty to Honesty," Kiel Working Papers 1411, Kiel Institute for the World Economy.
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