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A synthetic control approach on Chile's transition to democracy

Author

Listed:
  • Daniel A. P. Uhr

    (Applied Economics Post-Graduation Program. Federal University of Pelotas, Brazil.)

  • Julia G. Z. Uhr

    (Applied Economics Post-Graduation Program. Federal University of Pelotas)

  • Regis A. Ely

    (Applied Economics Post-Graduation Program. Federal University of Pelotas)

Abstract

We use a synthetic control approach for performing a case study of the impact of Economic Reforms and Democracy Openness on Chile's GDP per capita. We use data available at the World Bank Open Data from 1976 to 2014 for different countries in order to build a synthetic “authoritarian Chile†and compare it with the “real Chile†. We find a significant positive effect of the process of re-democratization on Chile's long-term GDP per capita. The results are robust to placebo tests and time series methods such as endogenous structural break tests and an analysis of causal impact based on the forecasts of a Bayesian Structural Time Series model.

Suggested Citation

  • Daniel A. P. Uhr & Julia G. Z. Uhr & Regis A. Ely, 2017. "A synthetic control approach on Chile's transition to democracy," Economics Bulletin, AccessEcon, vol. 37(3), pages 2219-2233.
    • Handle: RePEc:ebl:ecbull:eb-17-00037
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    References listed on IDEAS

    as
    1. William Keech, 2004. "Democracy, Dictatorship and Economic Performance in Chile," Econometric Society 2004 Latin American Meetings 332, Econometric Society.
    2. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    3. Andreas Billmeier & Tommaso Nannicini, 2013. "Assessing Economic Liberalization Episodes: A Synthetic Control Approach," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 983-1001, July.
    4. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    5. Jushan Bai & Pierre Perron, 2003. "Computation and analysis of multiple structural change models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(1), pages 1-22.
    6. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
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    More about this item

    Keywords

    Re-democratization; Economic Growth; Chile; Synthetic Control.;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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