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Income and democracy: Evidence from nonlinear estimations

Author

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  • Benhabib, Jess
  • Corvalan, Alejandro
  • Spiegel, Mark M.

Abstract

We test the relation between income and democracy during the postwar period. We employ panel estimation methods that explicitly allow for the fact that the primary measures of democracy are censored with substantial mass at the boundaries. We find that the statistically significant positive income–democracy relationship is robust to the inclusion of country fixed effects.

Suggested Citation

  • Benhabib, Jess & Corvalan, Alejandro & Spiegel, Mark M., 2013. "Income and democracy: Evidence from nonlinear estimations," Economics Letters, Elsevier, vol. 118(3), pages 489-492.
  • Handle: RePEc:eee:ecolet:v:118:y:2013:i:3:p:489-492
    DOI: 10.1016/j.econlet.2012.12.015
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    References listed on IDEAS

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    1. Bobba, Matteo & Coviello, Decio, 2007. "Weak instruments and weak identification, in estimating the effects of education, on democracy," Economics Letters, Elsevier, vol. 96(3), pages 301-306, September.
    2. Moral-Benito, Enrique & Bartolucci, Cristian, 2012. "Income and democracy: Revisiting the evidence," Economics Letters, Elsevier, vol. 117(3), pages 844-847.
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    6. 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.
    7. Daron Acemoglu & Simon Johnson & James A. Robinson & Pierre Yared, 2008. "Income and Democracy," American Economic Review, American Economic Association, vol. 98(3), pages 808-842, June.
    8. Jess Benhabib & Alejandro Corvalen & Mark M. Spiegel, 2011. "Reestablishing the income-democracy nexus," Working Paper Series 2011-09, Federal Reserve Bank of San Francisco.
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    13. Jess Benhabib & Adam Przeworski, 2006. "The political economy of redistribution under democracy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 29(2), pages 271-290, October.
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    Citations

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    Cited by:

    1. Ngoc Thi Minh Tran & Michael P. Cameron & Jacques Poot, 2017. "International Migration and Institutional Quality in the Home Country: It Matters Where You Go and How Long You Stay," Working Papers in Economics 17/17, University of Waikato.
    2. Fahad Hassan Khan, 2014. "From revenues to democracy?," Departmental Working Papers 2014-25, The Australian National University, Arndt-Corden Department of Economics.
    3. Casey, Gregory & Klemp, Marc, 2016. "Instrumental Variables in the Long Run," MPRA Paper 68696, University Library of Munich, Germany.
    4. repec:spr:inrvec:v:64:y:2017:i:4:d:10.1007_s12232-017-0273-8 is not listed on IDEAS
    5. Saha, Shrabani & Zhang, Zhaoyong, 2017. "Democracy-growth nexus and its interaction effect on human development: A cross-national analysis," Economic Modelling, Elsevier, vol. 63(C), pages 304-310.
    6. Wadjamsse B. Djezou, 2014. "The Democracy and Economic Growth Nexus: Empirical Evidence from Côte d’Ivoire," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 11(2), pages 251-266, December.
    7. Michal Madr, 2016. "Economic Development as a Factor of Democratisation: Evidence from Post-Socialist Economies," MENDELU Working Papers in Business and Economics 2016-70, Mendel University in Brno, Faculty of Business and Economics.
    8. Hugo J. Faria & Hugo M. Montesinos-Yufa, 2017. "Is the Effect of Income on Democracy Heterogeneous?," Working Papers 2017-05, University of Miami, Department of Economics.
    9. Benhabib, Jess & Corvalen, Alejandro & Spiegel, Mark M., 2014. "Modernization and Discrete Measures of Democracy," Working Paper Series 2014-1, Federal Reserve Bank of San Francisco.
    10. Matteo Cervellati & Florian Jung & Uwe Sunde & Thomas Vischer, 2014. "Income and Democracy: Comment," American Economic Review, American Economic Association, vol. 104(2), pages 707-719, February.
    11. Williams, Kevin, 2017. "Do remittances improve political institutions? Evidence from Sub-Saharan Africa," Economic Modelling, Elsevier, vol. 61(C), pages 65-75.
    12. Kemnitz, Alexander & Roessler, Martin, 2017. "Economic development, democratic institutions, and repression in non-democratic regimes: Theory and evidence," CEPIE Working Papers 04/17, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    13. Contreras, Jose L. & Corvalan, Alejandro, 2014. "Olympic Games: No legacy for sports," Economics Letters, Elsevier, vol. 122(2), pages 268-271.
    14. Suzanna-Maria Paleologou, 2015. "Income and democracy: the modernization hypothesis re-visited via alternative non-linear models," Empirical Economics, Springer, vol. 48(2), pages 909-921, March.
    15. Corvalan, Alejandro & Vargas, Miguel, 2015. "Segregation and conflict: An empirical analysis," Journal of Development Economics, Elsevier, vol. 116(C), pages 212-222.

    More about this item

    Keywords

    Income; Democracy; Modernization theory; Censoring; Dynamic panel;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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