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The agricultural and the democratic transitions: causality and the roundup model

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  • Gundlach, Erich
  • Paldam, Martin

Abstract

Long-run development (in income) causes a large fall in the share of agriculture commonly known as the agricultural transition. We confirm that this conventional wisdom is strongly supported by the data. Long-run development (in income) also causes a large increase in democracy known as the democratic transition. Elsewhere we have shown that it is almost as strong as the agricultural transition. Recently, a method has been presented to weed out spuriousness. It makes the democratic transition go away by turning income insignificant, when it is supplemented by a set of formal controls. We show that the same method makes the agricultural transition go away as well. Hence, it seems to be a method that kills far too much, as suggested by the subtitle. This suggestion leads to a discussion of the very meaning of long-run causality.

Suggested Citation

  • Gundlach, Erich & Paldam, Martin, 2009. "The agricultural and the democratic transitions: causality and the roundup model," Kiel Working Papers 1521, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1521
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    References listed on IDEAS

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    1. Paldam, Martin & Gundlach, Erich, 2008. "Democratic transition, The: a study of the causality between income and the Gastil democracy index," Kiel Working Papers 1459, Kiel Institute for the World Economy (IfW Kiel).
    2. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
    3. Olsson, Ola & Hibbs, Douglas Jr., 2005. "Biogeography and long-run economic development," European Economic Review, Elsevier, vol. 49(4), pages 909-938, May.
    4. Martin Paldam & Erich Gundlach, 2008. "Two Views on Institutions and Development: The Grand Transition vs the Primacy of Institutions," Kyklos, Wiley Blackwell, vol. 61(1), pages 65-100, February.
    5. Masters, William A & McMillan, Margaret S, 2001. "Climate and Scale in Economic Growth," Journal of Economic Growth, Springer, vol. 6(3), pages 167-186, September.
    6. Lipset, Seymour Martin, 1959. "Some Social Requisites of Democracy: Economic Development and Political Legitimacy1," American Political Science Review, Cambridge University Press, vol. 53(1), pages 69-105, March.
    7. Gregory Clark, 2007. "Introduction to A Farewell to Alms: A Brief Economic History of the World," Introductory Chapters, in: A Farewell to Alms: A Brief Economic History of the World, Princeton University Press.
    8. Daron Acemoglu & Simon Johnson & James A. Robinson & Pierre Yared, 2008. "Income and Democracy," American Economic Review, American Economic Association, vol. 98(3), pages 808-842, June.
    9. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    10. Philippe Aghion, 2005. "Growth and Institutions," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 32(1), pages 3-18, March.
    11. Philippe Aghion & Steven Durlauf (ed.), 2005. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 1, number 1.
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    Cited by:

    1. Robert H. Bates & Ghada Fayad & Anke Hoeffler, 2012. "The state of democracy in Sub-Saharan Africa," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 15(4), pages 323-338, December.
    2. Zohid Askarov & Hristos Doucouliagos, 2013. "Does aid improve democracy and governance? A meta-regression analysis," Public Choice, Springer, vol. 157(3), pages 601-628, December.
    3. Askarov, Zohid & Doucouliagos, Hristos, 2015. "Development Aid and Growth in Transition Countries," World Development, Elsevier, vol. 66(C), pages 383-399.

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    More about this item

    Keywords

    Long-run growth; transitions; causality and spuriousness;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • P5 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture

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