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The agricultural and the democratic transitions. Causality and the Roundup model

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Erich Gundlach
Martin Paldam

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Abstract

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 Kiel Institute for the World Economy in its series Kiel Working Papers with number 1521.

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Length: 20 pages
Date of creation: May 2009
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Handle: RePEc:kie:kieliw:1521

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Related research
Keywords: Long-run growth; transitions; causality and spuriousness;

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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

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  1. Olsson, Ola & Hibbs, Douglas Jr., 2005. "Biogeography and long-run economic development," European Economic Review, Elsevier, vol. 49(4), pages 909-938, May. [Downloadable!] (restricted)
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This page was last updated on 2009-11-24.


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