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Income and democracy: Evidence from system GMM estimates

Author

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  • Benedikt Heid
  • Julian Langer
  • Mario Larch

Abstract

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 model specifications and instrument sets.

Suggested Citation

  • Benedikt Heid & Julian Langer & Mario Larch, 2011. "Income and democracy: Evidence from system GMM estimates," ifo Working Paper Series 118, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
  • Handle: RePEc:ces:ifowps:_118
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    File URL: http://www.cesifo-group.de/DocDL/IfoWorkingPaper-118.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Carolyn Chisadza & Manoel Bittencourt, 2014. "Is Democracy Eluding Sub-Saharan Africa?," Working Papers 201403, University of Pretoria, Department of Economics.
    2. 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.
    3. Fedderke, Johannes & Klitgaard, Robert, 2013. "How Much Do Rights Matter?," World Development, Elsevier, vol. 51(C), pages 187-206.
    4. Armey, Laura E. & McNab, Robert M., 2012. "Democratization and civil war," MPRA Paper 42460, University Library of Munich, Germany.
    5. Casey, Gregory & Klemp, Marc, 2016. "Instrumental Variables in the Long Run," MPRA Paper 68696, University Library of Munich, Germany.
    6. Moral-Benito, Enrique & Bartolucci, Cristian, 2012. "Income and democracy: Revisiting the evidence," Economics Letters, Elsevier, vol. 117(3), pages 844-847.
    7. Lin, Faqin & Sim, Nicholas C.S., 2014. "Baltic Dry Index and the democratic window of opportunity," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 143-159.
    8. Reed, W. Robert & Zhu, Min, 2017. "On estimating long-run effects in models with lagged dependent variables," Economic Modelling, Elsevier, vol. 64(C), pages 302-311.
    9. repec:eaa:aeinde:v:17:y:2017:i:2_2 is not listed on IDEAS
    10. Nouha Bougharriou & Walid Benayed & Foued Badr Gabsi, 2016. "On the determinants of democracy in the Arab World," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 18(59), pages 25-42, March.
    11. 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.
    12. 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.
    13. Benhabib, Jess & Corvalan, Alejandro & Spiegel, Mark M., 2013. "Income and democracy: Evidence from nonlinear estimations," Economics Letters, Elsevier, vol. 118(3), pages 489-492.
    14. 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.
    15. 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.
    16. Ivar Kolstad & Arne Wiig, 2014. "Diversification and democracy," CMI Working Papers 9, CMI (Chr. Michelsen Institute), Bergen, Norway.
    17. 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.
    18. 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).
    19. 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.

    More about this item

    Keywords

    Income; democracy; dynamic panel estimators;

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • 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
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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