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Should the Modernization Hypothesis Survive Acemoglu, Johnson, Robinson, and Yared? Some More Evidence

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  • Hugo J. Faria
  • Hugo M. Montesinos-Yufa
  • Daniel R. Morales

Abstract

An important dimension of the “modernization hypothesis” is the claim that there is a long-run positive relation between socio-economic development and political democracy. This research strand of the modernization hypothesis, however, has been challenged in a series of papers by Daron Acemoglu, Simon Johnson, James Robinson, and Pierre Yared. Employing econometric specifications that condition on lagged democracy, income, education, time effects, and a proxy for the level of capitalist institutions, and applying the System Generalized Method of Moments estimator to a sample that spans recent decades, we find, in congruence with the modernization hypothesis, that income and education predict democracy.

Suggested Citation

  • Hugo J. Faria & Hugo M. Montesinos-Yufa & Daniel R. Morales, 2014. "Should the Modernization Hypothesis Survive Acemoglu, Johnson, Robinson, and Yared? Some More Evidence," Econ Journal Watch, Econ Journal Watch, vol. 11(1), pages 17-36, January.
  • Handle: RePEc:ejw:journl:v:11:y:2014:i:1:p:17-36
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    Cited by:

    1. 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.
    2. 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.

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    More about this item

    Keywords

    Modernization hypothesis; political development; capitalism; system GMM estimator;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • P10 - Economic Systems - - Capitalist Systems - - - General
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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