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Economic Development as a Factor of Democratisation: Evidence from Post-Socialist Economies

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  • Michal Madr

    () (Department of Economics, Faculty of Business and Economics, Mendel University in Brno)

Abstract

The main aim of the paper is to verify whether economic development, as the main component of Modernization theory, has affected the development of political regimes/democracy in post-socialist countries. Within Modernization theory, the contribution distinguishes between endogenous and exogenous Modernization theory. As indicators of the political regime, a composite index combining three concepts of democracy (Freedom in the World, Polity2 of the Polity IV Project and Freedom of Press) is used. On the basis of the index, several political systems (liberal democracies, hybrid and authoritarian regimes, non-liberal states, electoral democracies and non-democratic countries) are compared. For attainment of the aim, the paper uses three methods, a test of the equivalence of means, and logistic and linear regression analyses (OLS, OLS fixed effects, the Difference GMM and the System GMM). The reference period is focused on the years 1990-2015. According to the results, the paper rejects the endogenous Modernisation hypothesis as an explanation of the establishment of political regimes (formal institutions) in post-socialist countries, but alongside, one can state that the theory could be used as an elucidation of the formation of liberal democratic and authoritarian political systems in the post-socialist area. Simultaneously, the exogenous Modernization theory is confirmed, which means that higher economic development promotes the consolidation of democratic systems, particularly in the case of liberal democracies.

Suggested Citation

  • 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.
  • Handle: RePEc:men:wpaper:70_2016
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    References listed on IDEAS

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    More about this item

    Keywords

    Modernization theory; income; democratisation; post-socialist economies;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy

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