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The agricultural and the democratic transitions - Causality and the Roundup model

Author

Listed:
  • Erich Gundlach

    (Kiel Institute for the World Economy, Germany)

  • Martin Paldam

    () (School of Economics and Management, University of Aarhus, Denmark)

Abstract

Long-run development (in income) causes a large fall in the share of agriculture commonly known as the agricultural transition. We confirm that this conventional wisdom is strongly supported by the data. Long-run development (in income) also causes a large increase in democracy known as the democratic transition. Elsewhere we have shown that it is almost as strong as the agricultural transition. Recently, a method has been presented to weed out spuriousness. It makes the democratic transition go away by turning income insignificant, when it is supplemented by a set of formal controls. We show that the same method makes the agricultural transition go away as well. Hence, it seems to be a method that kills far too much, as suggested by the subtitle. This suggestion leads to a discussion of the very meaning of long-run causality.

Suggested Citation

  • Erich Gundlach & Martin Paldam, 2009. "The agricultural and the democratic transitions - Causality and the Roundup model," Economics Working Papers 2009-06, Department of Economics and Business Economics, Aarhus University.
  • Handle: RePEc:aah:aarhec:2009-06
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    File URL: ftp://ftp.econ.au.dk/afn/wp/09/wp09_06.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. Olsson, Ola & Hibbs, Douglas Jr., 2005. "Biogeography and long-run economic development," European Economic Review, Elsevier, vol. 49(4), pages 909-938, May.
    3. repec:cup:apsrev:v:53:y:1959:i:01:p:69-105_00 is not listed on IDEAS
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    Cited by:

    1. Askarov, Zohid & Doucouliagos, Hristos, 2015. "Development Aid and Growth in Transition Countries," World Development, Elsevier, vol. 66(C), pages 383-399.

    More about this item

    Keywords

    Long-run growth; transitions; causality and spuriousness;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • P5 - Economic Systems - - Comparative Economic Systems
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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