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Do Output Contractions Trigger Democratic Change?

Author

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  • Burke, Paul J.

    (Australian National University)

  • Leigh, Andrew

    (Parliament of Australia)

Abstract

Does faster economic growth increase pressure for democratic change, or reduce it? Using data for 154 countries for the period 1963-2007, we examine the short-run relationship between economic growth and moves toward and away from greater democracy. To address the potential endogeneity of economic growth, we use variation in precipitation, temperatures, and commodity prices as instruments for a country’s rate of economic growth. Our results indicate that more rapid economic growth reduces the short-run likelihood of institutional change toward democracy. Output contractions due to adverse weather shocks appear to have a particularly important impact on the timing of democratic change.

Suggested Citation

  • Burke, Paul J. & Leigh, Andrew, 2010. "Do Output Contractions Trigger Democratic Change?," IZA Discussion Papers 4808, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4808
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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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