IDEAS home Printed from https://ideas.repec.org/p/jrp/jrpwrp/2021-018.html
   My bibliography  Save this paper

The Poverty Effect of Democratization: Disaggregating Democratic Institutions

Author

Listed:
  • Christoph Doerffel

    (Friedrich Schiller University Jena)

Abstract

This paper analyzes which institutional features contribute to poverty reduction when countries democratize. For this, theories and data are used that distinguish between different areas of democratic institutions – namely electoral, liberal, participatory, deliberative, and egalitarian democratic institutions. The data analysis uses semi-parametric treatment effects estimates to estimate average treatment effects of democratization on poverty reduction and estimates this separately for countries with relatively weaker and stronger institutions at the time of democratization. The estimations reveal no clear pattern of a specific, predominant area of institutions while others are remain less important. In each area of institutions, some of its features contribute to poverty reduction and some do not. Especially, the hypothesis that stronger institutions lead to poverty reduction cannot confirmed. Stronger institutions only lead to significant poverty reduction for the institutions of executive and legislative being elected, and judicial constraints on the executive. For most other significant effects, weaker institutions lead to poverty reduction. This is likely due to triggered changes in institutions by democratization that only occur when institutions are still relatively weak, rather than due to growth or inequality changes. When the effect of democratization on poverty reduction is significant, it is meaningful in size (ranging from around 12 to 25 percent during the first five years after democratization, depending on the specific mid- and low-level institution). The pattern is the clearest for deliberative, participatory, and egalitarian institutions and less clear for electoral and liberal democratic institutions. This illustrates that institutions which capture how responsive policymaking is to its constituencies are more important for poverty reduction than institutions that capture formal aspects of democracy.

Suggested Citation

  • Christoph Doerffel, 2021. "The Poverty Effect of Democratization: Disaggregating Democratic Institutions," Jena Economic Research Papers 2021-018, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2021-018
    as

    Download full text from publisher

    File URL: https://oweb.b67.uni-jena.de/Papers/jerp2021/wp_2021_018.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael Ross, 2006. "Is Democracy Good for the Poor?," American Journal of Political Science, John Wiley & Sons, vol. 50(4), pages 860-874, October.
    2. Martin C. McGuire & Mancur Olson, 1998. "The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force," International Economic Association Series, in: Silvio Borner & Martin Paldam (ed.), The Political Dimension of Economic Growth, chapter 3, pages 38-73, Palgrave Macmillan.
    3. 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.
    4. Colagrossi, Marco & Rossignoli, Domenico & Maggioni, Mario A., 2020. "Does democracy cause growth? A meta-analysis (of 2000 regressions)," European Journal of Political Economy, Elsevier, vol. 61(C).
    5. United Nations UN, 2015. "Transforming our World: the 2030 Agenda for Sustainable Development," Working Papers id:7559, eSocialSciences.
    6. Svolik, Milan, 2008. "Authoritarian Reversals and Democratic Consolidation," American Political Science Review, Cambridge University Press, vol. 102(2), pages 153-168, May.
    7. L'industria, 2021. "Call for papers," L'industria, Società editrice il Mulino, issue 4, pages 771-786.
    8. Niskanen, William A, 1997. "Autocratic, Democratic, and Optimal Government," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 464-479, July.
    9. Dorsch, Michael T. & Maarek, Paul, 2019. "Democratization and the Conditional Dynamics of Income Distribution," American Political Science Review, Cambridge University Press, vol. 113(2), pages 385-404, May.
    10. Acemoglu,Daron & Robinson,James A., 2009. "Economic Origins of Dictatorship and Democracy," Cambridge Books, Cambridge University Press, number 9780521671422.
    11. Robert Deacon, 2009. "Public good provision under dictatorship and democracy," Public Choice, Springer, vol. 139(1), pages 241-262, April.
    12. Patrick Kline, 2011. "Oaxaca-Blinder as a Reweighting Estimator," American Economic Review, American Economic Association, vol. 101(3), pages 532-537, May.
    13. José Cheibub & Jennifer Gandhi & James Vreeland, 2010. "Democracy and dictatorship revisited," Public Choice, Springer, vol. 143(1), pages 67-101, April.
    14. L'industria, 2021. "Call for Papers," L'industria, Società editrice il Mulino, issue 1, pages 175-189.
    15. Deacon, Robert, 2003. "Dictatorship, Democracy, and the Provision of Public Goods," University of California at Santa Barbara, Economics Working Paper Series qt9h54w76c, Department of Economics, UC Santa Barbara.
    16. Hristos Doucouliagos & Mehmet Ali Ulubaşoğlu, 2008. "Democracy and Economic Growth: A Meta‐Analysis," American Journal of Political Science, John Wiley & Sons, vol. 52(1), pages 61-83, January.
    17. Adam Przeworski & Fernando Limongi & Salvador Giner, 1995. "Political Regimes and Economic Growth," International Economic Association Series, in: Amiya Kumar Bagchi (ed.), Democracy and Development, chapter 1, pages 3-27, Palgrave Macmillan.
    18. Brown, David S. & Hunter, Wendy, 1999. "Democracy and Social Spending in Latin America, 1980–92," American Political Science Review, Cambridge University Press, vol. 93(4), pages 779-790, December.
    19. Christoph Doerffel & Andreas Freytag, 2021. "The Poverty Effect of Democratization," Jena Economic Research Papers 2021-017, Friedrich-Schiller-University Jena.
    20. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    21. Sigman, Rachel & Lindberg, Staffan I., 2019. "Democracy for All: Conceptualizing and Measuring Egalitarian Democracy," Political Science Research and Methods, Cambridge University Press, vol. 7(3), pages 595-612, July.
    22. Francois Bourguignon, 2004. "The Poverty-growth-inequality triangle," Indian Council for Research on International Economic Relations, New Delhi Working Papers 125, Indian Council for Research on International Economic Relations, New Delhi, India.
    23. L'industria, 2021. "Call for Papers," L'industria, Società editrice il Mulino, issue 2, pages 377-391.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christoph Doerffel & Andreas Freytag, 2021. "The Poverty Effect of Democratization," Jena Economic Research Papers 2021-017, Friedrich-Schiller-University Jena.
    2. Ramos, Antonio P. & Flores, Martin J. & Ross, Michael L., 2020. "Where has democracy helped the poor? Democratic transitions and early-life mortality at the country level," Social Science & Medicine, Elsevier, vol. 265(C).
    3. Kammas, Pantelis & Sarantides, Vassilis, 2019. "Do dictatorships redistribute more?," Journal of Comparative Economics, Elsevier, vol. 47(1), pages 176-195.
    4. Daron Acemoglu & Suresh Naidu & Pascual Restrepo & James A. Robinson, 2019. "Democracy Does Cause Growth," Journal of Political Economy, University of Chicago Press, vol. 127(1), pages 47-100.
    5. Mulligan Casey B & Gil Ricard & Sala-i-Martin Xavier X, 2010. "Social Security and Democracy," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-46, March.
    6. Johannes Blum & Florian Dorn & Axel Heuer, 2021. "Political institutions and health expenditure," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(2), pages 323-363, April.
    7. Carl Henrik Knutsen, 2012. "Democracy and economic growth: A survey of arguments and results," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 15(4), pages 393-415, December.
    8. Martin Roessler, 2019. "Political regimes and publicly provided goods: why democracy needs development," Public Choice, Springer, vol. 180(3), pages 301-331, September.
    9. Bahamonde, Hector & Trasberg, Mart, 2021. "Inclusive institutions, unequal outcomes: Democracy, state capacity, and income inequality," European Journal of Political Economy, Elsevier, vol. 70(C).
    10. Dorsch, Michael T. & Maarek, Paul, 2020. "Economic downturns, inequality, and democratic improvements," European Journal of Political Economy, Elsevier, vol. 62(C).
    11. 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.
    12. Alberto Batinti & Joan Costa‐Font & Timothy J. Hatton, 2022. "Voting Up? The Effects of Democracy and Franchise Extension on Human Stature," Economica, London School of Economics and Political Science, vol. 89(353), pages 161-190, January.
    13. Jong-A-Pin, Richard & Mierau, Jochen O., 2022. "No country for old men: Aging dictators and economic growth," Economic Modelling, Elsevier, vol. 107(C).
    14. Leonid Polishchuk & Georgiy Syunyaev, 2015. "Ruling elites’ rotation and asset ownership: implications for property rights," Public Choice, Springer, vol. 162(1), pages 159-182, January.
    15. Mulligan, Casey B. & Tsui, Kevin K., 2015. "Political entry, public policies, and the economy," Research in Economics, Elsevier, vol. 69(3), pages 377-397.
    16. Kosack, Stephen & Tobin, Jennifer L., 2015. "Which Countries’ Citizens Are Better Off With Trade?," World Development, Elsevier, vol. 76(C), pages 95-113.
    17. Lidia Ceriani & Simona Scabrosetti & Francesco Scervini, 2022. "Inequality, Privatization and Democratic Institutions in Developing Countries," Hacienda Pública Española / Review of Public Economics, IEF, vol. 240(1), pages 95-124, March.
    18. Wong, Mathew Y.H., 2021. "Democracy, hybrid regimes, and inequality: The divergent effects of contestation and inclusiveness," World Development, Elsevier, vol. 146(C).
    19. Christian Houle, 2017. "Inequality, ethnic diversity, and redistribution," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(1), pages 1-23, March.
    20. Christian Houle, 2017. "Inequality, ethnic diversity, and redistribution," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(1), pages 1-23, March.

    More about this item

    Keywords

    Poverty; Democracy; Human Development;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jrp:jrpwrp:2021-018. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.wiwiss.uni-jena.de/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Markus Pasche (email available below). General contact details of provider: http://www.wiwiss.uni-jena.de/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.