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On Democratization and Economic Conditions in Eastern Europe


  • Bernd Hayo

    (University of Bonn and Georgetown University)


The paper empirically investigates whether people's attitude towards the progress in political transformation in Eastern Europe are influenced by economic factors. Thereby it addresses the question of independence between economic and political system. Using a large panel data set, containing about 68000 observations on individuals from 19 countries over 6 years, this question is analyzed in the framework of an appropriately adjusted ordered logit model. It is found that both subjective and objective personal economic experiences, such as the development of the financial situation of the household or its position in the income distribution, as well as objective aggregate data, such as inflation or the private sector share, have a significant influence on people's opinion with respect to progress in democratization. Thus, studies on transition countries should take into account that there appear to be important spill-overs from people's economic experience to their assessment of progress in transforming the political system.

Suggested Citation

  • Bernd Hayo, 2001. "On Democratization and Economic Conditions in Eastern Europe," Development and Comp Systems 0106001, EconWPA.
  • Handle: RePEc:wpa:wuwpdc:0106001
    Note: Type of Document - ; pages: 18; figures: included

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    References listed on IDEAS

    1. Rafael Di Tella & Robert J. MacCulloch & Andrew J. Oswald, 2003. "The Macroeconomics of Happiness," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 809-827, November.
    2. Fidrmuc, Jan, 2000. "Liberalization, democracy and economic performance during transition," ZEI Working Papers B 05-2000, University of Bonn, ZEI - Center for European Integration Studies.
    3. de Melo, Martha & Denizer, Cevdet & Gelb, Alan, 1996. "From plan to market : patterns of transition," Policy Research Working Paper Series 1564, The World Bank.
    4. Dethier, Jean-Jacques*Ghanem, Hafez*Zoli, Edda, 1999. "Does democracy facilitate the economic transition : an empirical study of Central and Eastern Europe and the Former Soviet Union," Policy Research Working Paper Series 2194, The World Bank.
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    Cited by:

    1. Jain, Sanjay & Sharun Mukand, 2003. "Public Opinion and the Dynamics of Reform," Royal Economic Society Annual Conference 2003 114, Royal Economic Society.

    More about this item


    Eastern Europe; Political Economy; Democracy; Transformation;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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