Democracy doesn't always happen overnight: Regime change in stages and economic growth

Vanessa Boese and Markus Eberhardt

No 2021-01, Discussion Papers from University of Nottingham, GEP

Abstract: We motivate and empirically analyse the idea that democratic regime change is not a discrete event but a two-stage process: in the first stage, autocracies enter into an 'episode' of political liberalization which can last for years or even decades; in the second stage, the ultimate outcome of the episode manifests itself and a nation undergoes regime change or not. Failure to account for this chronology risks biased estimates of the economic effects of democratic regime change since this ignores the relevance of the counterfactual group in which liberalisation did not culminate in a democratic transition. Using novel Varieties of Democracy (V-Dem) data on Episodes of Regime Transformation (ERT) for a large sample of countries from 1950 to 2014 we study this phenomenon in a repeated-treatment difference-in-difference framework which accounts for non-parallel pre-treatment trends and selection into treatment. Our findings suggest that a single event approach significantly underestimates the economic benefits from lasting democratic regime change.

Keywords: Democracy; Growth; Political Development; Interactive Fixed Effects; Difference-in-Difference (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-gro, nep-his and nep-pol
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Democracy Doesn’t Always Happen Over Night: Regime Change in Stages and Economic Growth (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notgep:2021-01

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