Long-run development (in income) causes a large fall in the share of agriculture commonly known as the agricultural transition. We confirm that this conventional wisdom is strongly supported by the data. Long-run development (in income) also causes a large increase in democracy known as the democratic transition. Elsewhere we have shown that it is almost as strong as the agricultural transition. Recently, a method has been presented to weed out spuriousness. It makes the democratic transition go away by turning income insignificant, when it is supplemented by a set of formal controls. We show that the same method makes the agricultural transition go away as well. Hence, it seems to be a method that kills far too much, as suggested by the subtitle. This suggestion leads to a discussion of the very meaning of long-run causality.
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Paper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number
2009-06.
Find related papers by JEL classification: O1 - Economic Development, Technological Change, and Growth - - Economic Development P5 - Economic Systems - - Comparative Economic Systems Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture H5 - Public Economics - - National Government Expenditures and Related Policies H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
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