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Income, Democracy, and Critical Junctures

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  • Sunde, Uwe
  • Cervellati, Matteo
  • Jung, Florian
  • Vischer, Thomas

Abstract

Acemoglu, Johnson, Robinson and Yared (2008) document that the cross-country correlation between income per capita and democracy disappears once including country fixed effects. This paper tests the hypothesis that the effect of income on democracy might differ systematically across countries. A replication of the estimation in a less restrictive empirical framework provides evidence for significant but heterogeneous effects of income on democracy for former colonies and non-colonies, as well as within the sample of former colonies. These heterogeneous effect are related to colonial history and early institutions, and are robust to the use of alternative data and estimation techniques.

Suggested Citation

  • Sunde, Uwe & Cervellati, Matteo & Jung, Florian & Vischer, Thomas, 2012. "Income, Democracy, and Critical Junctures," CEPR Discussion Papers 9259, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:9259
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    Cited by:

    1. Sequeira Tiago Neves, 2017. "Democracy and income: taking parameter heterogeneity and cross-country dependency into account," The B.E. Journal of Macroeconomics, De Gruyter, vol. 17(2), pages 1-19, June.
    2. 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.

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    More about this item

    Keywords

    Critical junctures; Democracy; Economic development; Income; Institutions; Modernization hypothesis;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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