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Should market liberalization precede democracy? Causal relations between political preferences and development

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Author Info

  • Pauline Grosjean

    (EBRD - European Bank for Reconstruction and Development - EBRD)

  • Claudia Senik

    (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, UP4 - Université Paris 4, Paris-Sorbonne - Université Paris IV - Paris Sorbonne - Ministère de l'Enseignement Supérieur et de la Recherche Scientifique, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris)

Abstract

This paper is dedicated to the relation between market development and democracy. We distinguish contexts and preferences and ask whether it is true that the demand for democracy only emerges after a certain degree of market development is reached, and whether, conversely, democratization is likely to be an obstacle to the acceptation of market liberalization. Our study hinges on a new survey rich in attitudinal variables: the Life in Transition Survey (LITS) conducted in 2006 by the European Bank for Reconstruction and Development and the World Bank, in 28 post-Transition countries. Our identification strategy consists in relying on the specific situation of frontier-zones. We find that democracy enhances the support for market development whereas the reverse is not true. Hence, the relativist argument according to which the preference for democracy is an endogenous by-product of market development is not supported by our data.

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Bibliographic Info

Paper provided by HAL in its series PSE Working Papers with number halshs-00588060.

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Date of creation: Jun 2007
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Handle: RePEc:hal:psewpa:halshs-00588060

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Related research

Keywords: market and democracy ; sequencing of development ; transition economies ; attitudinal variables ; cross-countries survey;

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  1. Torsten Persson & Guido Tabellini, 2006. "Democracy and Development: The Devil in the Details," NBER Working Papers 11993, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Grosjean, Pauline & Senik, Claudia, 2008. "Why Populist Democracy Promotes Market Liberalization," IZA Discussion Papers 3527, Institute for the Study of Labor (IZA).
  2. Pauline Grosjean & Claudia Senik, 2008. "How populist democracy promotes market liberalization," PSE Working Papers halshs-00586284, HAL.
  3. repec:hal:wpaper:halshs-00586284 is not listed on IDEAS
  4. Brigitte Granville & Judith Shapiro, 2008. "Scratch a Would-Be Planner: Robbins, Neoclassical Economics and the End of Socialism," Working Papers 11, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.

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