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Income and democracy: Evidence from system GMM estimates

  • Heid, Benedikt
  • Langer, Julian
  • Larch, Mario

Does higher income cause democracy? Accounting for the dynamic nature and high persistence of income and democracy, we find a statistically significant positive relation between income and democracy for a postwar period sample of up to 150 countries. Our results are robust across different measures of democracy and instrumentation strategies.

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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 116 (2012)
Issue (Month): 2 ()
Pages: 166-169

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Handle: RePEc:eee:ecolet:v:116:y:2012:i:2:p:166-169
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. 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.
  2. Steve Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  3. Daniel Treisman, 2011. "Income, Democracy, and the Cunning of Reason," NBER Working Papers 17132, National Bureau of Economic Research, Inc.
  4. Gundlach, Erich & Paldam, Martin, 2009. "A farewell to critical junctures: Sorting out long-run causality of income and democracy," European Journal of Political Economy, Elsevier, vol. 25(3), pages 340-354, September.
  5. David Roodman, 2006. "How to Do xtabond2: An Introduction to "Difference" and "System" GMM in Stata," Working Papers 103, Center for Global Development.
  6. Moral-Benito, Enrique & Bartolucci, Cristian, 2012. "Income and democracy: Revisiting the evidence," Economics Letters, Elsevier, vol. 117(3), pages 844-847.
  7. M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
  8. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
  9. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-54, July.
  10. 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.
  11. Matteo Bobba & Decio Coviello, 2006. "Weak Instruments and Weak Identification in Estimating the Effects of Education on Democracy," Research Department Publications 4472, Inter-American Development Bank, Research Department.
  12. Jess Benhabib & Alejandro Corvalan & Mark M. Spiegel, 2011. "Reestablishing the Income-Democracy Nexus," NBER Working Papers 16832, National Bureau of Economic Research, Inc.
  13. Robert J. Barro, 1999. "Determinants of Democracy," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S158-S183, December.
  14. repec:oup:restud:v:58:y:1991:i:2:p:277-97 is not listed on IDEAS
  15. David Roodman, 2007. "A Note on the Theme of Too Many Instruments," Working Papers 125, Center for Global Development.
  16. Felbermayr, Gabriel & Gröschl, Jasmin, 2014. "Within U.S. trade and the long shadow of the american secession," Munich Reprints in Economics 20587, University of Munich, Department of Economics.
  17. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
  18. Alonso-Borrego, Cesar & Arellano, Manuel, 1999. "Symmetrically Normalized Instrumental-Variable Estimation Using Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(1), pages 36-49, January.
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