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The Golden Halo and Political Transitions

Author

Listed:
  • Aidt, Toke
  • Albornoz, Facundo
  • Gassebner, Martin

Abstract

In this paper we analyze the role of the IMF and the World Bank in triggering changes in the political regime, i.e., democracy and autocracy. We develop a theoretical model which predicts that anticipation of financial flows from international financial institutions may trigger political regime changes which would not take place otherwise. We test the implications of our model empirically and find support both for the role of perfectly foreseen IMF and World Bank programs and of the history of previous World Bank programs. The magnitude of this effects is quite substantial.

Suggested Citation

  • Aidt, Toke & Albornoz, Facundo & Gassebner, Martin, 2010. "The Golden Halo and Political Transitions," Proceedings of the German Development Economics Conference, Hannover 2010 48, Verein für Socialpolitik, Research Committee Development Economics.
    • Handle: RePEc:zbw:gdec10:48
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    Citations

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    Cited by:

    1. Toke S. Aidt & Facundo Albornoz & Esther Hauk, 2019. "Foreign in influence and domestic policy: A survey," Cambridge Working Papers in Economics 1928, Faculty of Economics, University of Cambridge.
    2. Tian, Jilin & Sim, Nicholas & Yan, Wenshou & Li, Yanyun, 2020. "Trade uncertainty, income, and democracy," Economic Modelling, Elsevier, vol. 90(C), pages 21-31.
    3. Aidt, Toke S. & Albornoz, Facundo & Gassebner, Martin, 2018. "The golden hello and political transitions," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 157-173.
    4. Mare Sarr & Chiara Ravetti & Tim Swanson, 2015. "Why Give Aid to Resource-Rich Autocrats?," CIES Research Paper series 39-2015, Centre for International Environmental Studies, The Graduate Institute.
    5. Toke S. Aidt & Facundo Albornoz & Esther Hauk, 2021. "Foreign Influence and Domestic Policy," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 426-487, June.
    6. Ammons, Joshua D., 2024. "Institutional effects of nonviolent and violent revolutions," World Development Perspectives, Elsevier, vol. 34(C).
    7. François, Abel & Méon, Pierre-Guillaume, 2021. "Politicians at higher levels of government are perceived as more corrupt," European Journal of Political Economy, Elsevier, vol. 67(C).
    8. Roberto Bonfatti, 2017. "An economic theory of foreign interventions and regime change," Canadian Journal of Economics, Canadian Economics Association, vol. 50(1), pages 306-339, February.
    9. Gehring, Kai & Kaplan, Lennart C. & Wong, Melvin H.L., 2022. "China and the World Bank—How contrasting development approaches affect the stability of African states," Journal of Development Economics, Elsevier, vol. 158(C).
    10. Albornoz, Facundo & Hauk, Esther, 2014. "Civil war and U.S. foreign influence," Journal of Development Economics, Elsevier, vol. 110(C), pages 64-78.
    11. Lacroix, Jean & Méon, Pierre-Guillaume & Sekkat, Khalid, 2021. "Democratic transitions can attract foreign direct investment: Effect, trajectories, and the role of political risk," Journal of Comparative Economics, Elsevier, vol. 49(2), pages 340-357.
    12. Kersting, Erasmus K. & Kilby, Christopher, 2016. "With a little help from my friends: Global electioneering and World Bank lending," Journal of Development Economics, Elsevier, vol. 121(C), pages 153-165.
    13. Facundo Albornoz & Esther Hauk, 2010. "Civil War and Foreign Influence," Working Papers 480, Barcelona School of Economics.

    More about this item

    Keywords

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    JEL classification:

    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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