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Democratization, Violent Social Conflicts, and Growth

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  • Matteo Cervellati

    ()

  • Sunde, Uwe

    ()

Abstract

This paper investigates the empirical role of violent conflicts for the causal effect of democracy on economic growth. Exploiting within-country variation to identify the effect of democratization during the "Third Wave", we find evidence that the effect of democratization is weaker than reported previously once one accounts for the incidence of conflict, while the incidence of conflict itself significantly reduces growth. The results show in turn that permanent democratic transitions significantly reduce the incidence and onset of conflict, which suggests that part of the positive growth effect of democratization arises because democratization reduces conflict incidence. When accounting for the role of violence during democratization, we find evidence that peaceful transitions to democracy have a significant positive effect on growth that is even larger than reported in the previous literature, while violent transitions to democracy have no, or even negative, effects on economic growth.

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File URL: http://www1.vwa.unisg.ch/RePEc/usg/econwp/EWP-1114.pdf
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Bibliographic Info

Paper provided by University of St. Gallen, School of Economics and Political Science in its series Economics Working Paper Series with number 1114.

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Length: 31 pages
Date of creation: Apr 2011
Date of revision:
Handle: RePEc:usg:econwp:2011:14

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Related research

Keywords: Democratization; Armed Conict; Civil War; Economic Growth; Democratization Scenario; Peaceful Transition.;

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  1. Daron Acemoglu & James A. Robinson, 2001. "A Theory of Political Transitions," American Economic Review, American Economic Association, vol. 91(4), pages 938-963, September.
  2. Elias Papaioannou & Gregorios Siourounis, 2008. "Democratization and Growth," Working Papers 00027, University of Peloponnese, Department of Economics.
  3. Dani Rodrik & Romain Wacziarg, 2005. "Do Democratic Transitions Produce Bad Economic Outcomes?," American Economic Review, American Economic Association, vol. 95(2), pages 50-55, May.
  4. Matteo Cervellati & Piergiuseppe Fortunato & Uwe Sunde, 2008. "Hobbes to Rousseau: Inequality, Institutions and Development," Economic Journal, Royal Economic Society, vol. 118(531), pages 1354-1384, 08.
  5. Cervellati, Matteo & Fortunato, Piergiuseppe & Sunde, Uwe, 2011. "Democratization and Civil Liberties: The Role of Violence During the Transition," CEPR Discussion Papers 8315, C.E.P.R. Discussion Papers.
  6. Christopher Blattman & Edward Miguel, 2009. "Civil War," NBER Working Papers 14801, National Bureau of Economic Research, Inc.
  7. Lotta Harbom & Peter Wallensteen, 2010. "Armed Conflicts, 1946-2009," Journal of Peace Research, Peace Research Institute Oslo, vol. 47(4), pages 501-509, July.
  8. Acemoglu, Daron & Johnson, Simon & Robinson, James A. & Yared, Pierre, 2009. "Reevaluating the modernization hypothesis," Journal of Monetary Economics, Elsevier, vol. 56(8), pages 1043-1058, November.
  9. Antonio Ciccone, 2011. "Economic Shocks and Civil Conflict: A Comment," American Economic Journal: Applied Economics, American Economic Association, vol. 3(4), pages 215-27, October.
  10. Torsten Persson & Guido Tabellini, 2006. "Democracy and Development: The Devil in the Details," American Economic Review, American Economic Association, vol. 96(2), pages 319-324, May.
  11. repec:cup:cbooks:9780521855266 is not listed on IDEAS
  12. 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.
  13. Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, . "The Quality of Government," Working Paper 19452, Harvard University OpenScholar.
  14. Lars-Erik Cederman & Simon Hug & Lutz F. Krebs, 2010. "Democratization and civil war: Empirical evidence," Journal of Peace Research, Peace Research Institute Oslo, vol. 47(4), pages 377-394, July.
  15. Paul Collier & Anke Hoeffler, 2004. "Greed and Grievance in Civil War," Development and Comp Systems 0409007, EconWPA.
  16. Philip Keefer, 2008. "Insurgency and Credible Commitment in Autocracies and Democracies," World Bank Economic Review, World Bank Group, vol. 22(1), pages 33-61, January.
  17. Reynal-Querol, Marta, 2005. "Does democracy preempt civil wars?," European Journal of Political Economy, Elsevier, vol. 21(2), pages 445-465, June.
  18. Tavares, Jose & Wacziarg, Romain, 2001. "How democracy affects growth," European Economic Review, Elsevier, vol. 45(8), pages 1341-1378, August.
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