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Do Output Contractions Trigger Democratic Change?

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Author Info

  • Burke, Paul J.

    ()
    (Australian National University)

  • Leigh, Andrew

    ()
    (Australian National University)

Abstract

Does faster economic growth increase pressure for democratic change, or reduce it? Using data for 154 countries for the period 1963-2007, we examine the short-run relationship between economic growth and moves toward and away from greater democracy. To address the potential endogeneity of economic growth, we use variation in precipitation, temperatures, and commodity prices as instruments for a country’s rate of economic growth. Our results indicate that more rapid economic growth reduces the short-run likelihood of institutional change toward democracy. Output contractions due to adverse weather shocks appear to have a particularly important impact on the timing of democratic change.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4808.

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Length: 85 pages
Date of creation: Mar 2010
Date of revision:
Publication status: published in: American Economic Journal: Macroeconomics, 2010, 2 (4), 124-157
Handle: RePEc:iza:izadps:dp4808

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Keywords: weather; democratization; economic growth; commodity prices;

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References

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  1. Andrew Leigh, 2009. "Does the World Economy Swing National Elections?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(2), pages 163-181, 04.
  2. Alberto Alesina & Nouriel Roubini & Gerald D. Cohen, 1997. "Political Cycles and the Macroeconomy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510944, December.
  3. Joshua Angrist & Alan B. Krueger, 2001. "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," NBER Working Papers 8456, National Bureau of Economic Research, Inc.
  4. Richard Tiffin & Xavier Irz, 2006. "Is agriculture the engine of growth?," Agricultural Economics, International Association of Agricultural Economists, vol. 35(1), pages 79-89, 07.
  5. Jan Dehn, 2000. "Commodity price uncertainty in developing countries," CSAE Working Paper Series 2000-12, Centre for the Study of African Economies, University of Oxford.
  6. Daron Acemoglu & Simon Johnson & James A. Robinson & Pierre Yared, 2008. "Income and Democracy," American Economic Review, American Economic Association, vol. 98(3), pages 808-42, June.
  7. J. Vernon Henderson & Adam Storeygard & David N. Weil, 2009. "Measuring Economic Growth from Outer Space," NBER Working Papers 15199, National Bureau of Economic Research, Inc.
  8. Jan Dehn, 2000. "Commodity Price Uncertainty in Developing Countries," Economics Series Working Papers WPS/2000-12, University of Oxford, Department of Economics.
  9. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
  10. Jinyong Hahn & Jerry Hausman, 2003. "Weak Instruments: Diagnosis and Cures in Empirical Econometrics," American Economic Review, American Economic Association, vol. 93(2), pages 118-125, May.
  11. Jenny A. Minier, 2001. "Is Democracy a Normal Good? Evidence from Democratic Movements," Southern Economic Journal, Southern Economic Association, vol. 67(4), pages 996-1009, April.
  12. Dehn, Jan, 2000. "Commodity price uncertainty in developing countries," Policy Research Working Paper Series 2426, The World Bank.
  13. repec:cup:cbooks:9780521855266 is not listed on IDEAS
  14. Tang, Sam Hak Kan & Yung, Linda Chor Wing, 2008. "Does rapid economic growth enhance democratization? Time-series evidence from high performing Asian economies," Journal of Asian Economics, Elsevier, vol. 19(3), pages 244-253, June.
  15. Zak, Paul J. & Feng, Yi, 2003. "A dynamic theory of the transition to democracy," Journal of Economic Behavior & Organization, Elsevier, vol. 52(1), pages 1-25, September.
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Blog mentions

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  1. Growth and democratic change: there is no free lunch
    by Economic Logician in Economic Logic on 2010-03-05 13:22:00
  2. Ger ökad tillväxt demokratisering?
    by Niclas Berggren in Nonicoclolasos on 2010-03-26 04:31:44
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