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Relationship between Income and Emergence of Democracy Reexamined, 1820-2000: A non-parametric approach

Author

Listed:
  • Branko Milanovic

    (World Bank)

Abstract

The paper contrasts Lipset’s modernization hypothesis and Przeworski- Limongi hypothesis that entries into democracy are random with respect to income. We use data on income and democracy going back to 1820, multiple definitions of democracy, and non-parametric testing focusing on the distribution of entrants’ incomes. We find that income matters for entry into higher levels of democracy; but if we control for the previously achieved level of democracy, the income effect vanishes. This means that countries that enter into higher levels of democracy are not a random draw from the universe of all country incomes but are a random draw from the joint distribution of previous level of democracy and income. These results are compatible with the presence of a subgroup of (low) income and (low) democracy countries from which recruitment into democracy is seldom made. But for other countries, accession to higher levels of democracy is income-random. Income seems therefore both to matter (probably explaining why poor countries cannot improve their democracy levels) and not matter (explaining why for other countries improvements in democracy are income-random).

Suggested Citation

  • Branko Milanovic, 2005. "Relationship between Income and Emergence of Democracy Reexamined, 1820-2000: A non-parametric approach," Law and Economics 0509004, EconWPA.
  • Handle: RePEc:wpa:wuwple:0509004
    Note: Type of Document - pdf; pages: 39
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/le/papers/0509/0509004.pdf
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    References listed on IDEAS

    as
    1. Adam Przeworski & Fernando Limongi, 1993. "Political Regimes and Economic Growth," Journal of Economic Perspectives, American Economic Association, vol. 7(3), pages 51-69, Summer.
    2. Branko Milanovic, 2005. "The Modern World: The effect of democracy, colonialism and war on economic growth 1820-2000," Development and Comp Systems 0509002, EconWPA.
    3. repec:cup:apsrev:v:53:y:1959:i:01:p:69-105_00 is not listed on IDEAS
    4. Barro, Robert J, 2000. "Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Democracy; income; modernization;

    JEL classification:

    • K - Law and Economics

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