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Democratization, Violent Social Conflicts, and Growth

  • Cervellati, Matteo

    ()

    (University of Bologna)

  • Sunde, Uwe

    ()

    (University of Munich)

This paper investigates the empirical role of violent conflicts for the causal effect of democracy on economic growth. Exploiting within-country variation to identify the effect of democratization during the “Third Wave”, we find evidence that the effect of democratization is weaker than reported previously once one accounts for the incidence of conflict, while the incidence of conflict itself significantly reduces growth. The results show in turn that permanent democratic transitions significantly reduce the incidence and onset of conflict, which suggests that part of the positive growth effect of democratization arises because democratization reduces conflict incidence. When accounting for the role of violence during democratization, we find evidence that peaceful transitions to democracy have a significant positive effect on growth that is even larger than reported in the previous literature, while violent transitions to democracy have no, or even negative, effects on economic growth.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5643.

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Length: 30 pages
Date of creation: Apr 2011
Date of revision:
Handle: RePEc:iza:izadps:dp5643
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  1. Daron Acemoglu & Simon Johnson & James Robinson & Pierre Yared, 2005. "Income and Democracy," NBER Working Papers 11205, National Bureau of Economic Research, Inc.
  2. Cervellati, Matteo & Fortunato, Piergiuseppe & Sunde, Uwe, 2011. "Democratization and Civil Liberties: The Role of Violence During the Transition," CEPR Discussion Papers 8315, C.E.P.R. Discussion Papers.
  3. Daron Acemoglu & James Robinson, 1999. "A Theory of Political Transitions," Working papers 99-26, Massachusetts Institute of Technology (MIT), Department of Economics.
  4. Papaioannou, Elias & Siourounis, Gregorios, 2008. "Democratization and Growth," CEPR Discussion Papers 6987, C.E.P.R. Discussion Papers.
  5. Collier, Paul & Hoeffler, Anke, 2000. "Greed and grievance in civil war," Policy Research Working Paper Series 2355, The World Bank.
  6. Persson, Torsten & Tabellini, Guido, 2006. "Democracy and Development: The Devil in the Details," CEPR Discussion Papers 5499, C.E.P.R. Discussion Papers.
  7. Daron Acemoglu & Simon Johnson & James A. Robinson & Pierre Yared, 2007. "Reevaluating the Modernization Hypothesis," NBER Working Papers 13334, National Bureau of Economic Research, Inc.
  8. Cervellati, Matteo & Fortunato, Piergiuseppe & Sunde, Uwe, 2008. "Hobbes to rousseau: Inequality, institutions and development," Munich Reprints in Economics 20088, University of Munich, Department of Economics.
  9. Lars-Erik Cederman & Simon Hug & Lutz F. Krebs, 2010. "Democratization and civil war: Empirical evidence," Journal of Peace Research, Peace Research Institute Oslo, vol. 47(4), pages 377-394, July.
  10. Christopher Blattman & Edward Miguel, 2010. "Civil War," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 3-57, March.
  11. Dani Rodrik & Romain Wacziarg, 2005. "Do Democratic Transitions Produce Bad Economic Outcomes?," American Economic Review, American Economic Association, vol. 95(2), pages 50-55, May.
  12. Lotta Harbom & Peter Wallensteen, 2010. "Armed Conflicts, 1946—2009," Journal of Peace Research, Peace Research Institute Oslo, vol. 47(4), pages 501-509, July.
  13. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," Journal of Law, Economics and Organization, Oxford University Press, vol. 15(1), pages 222-79, April.
  14. Keefer, Philip, 2007. "Insurgency and credible commitment in autocracies and democracies," Policy Research Working Paper Series 4185, The World Bank.
  15. Reynal-Querol, Marta, 2005. "Does democracy preempt civil wars?," European Journal of Political Economy, Elsevier, vol. 21(2), pages 445-465, June.
  16. Antonio Ciccone, 2008. "Economic shocks and civil conflict: A comment," Economics Working Papers 1127, Department of Economics and Business, Universitat Pompeu Fabra, revised Feb 2011.
  17. Tavares, Jose & Wacziarg, Romain, 2001. "How democracy affects growth," European Economic Review, Elsevier, vol. 45(8), pages 1341-1378, August.
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