Income, Democracy, and Critical Junctures

Uwe Sunde, Matteo Cervellati, Florian Jung and Thomas Vischer

No 9259, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Acemoglu, Johnson, Robinson and Yared (2008) document that the cross-country correlation between income per capita and democracy disappears once including country fixed effects. This paper tests the hypothesis that the effect of income on democracy might differ systematically across countries. A replication of the estimation in a less restrictive empirical framework provides evidence for significant but heterogeneous effects of income on democracy for former colonies and non-colonies, as well as within the sample of former colonies. These heterogeneous effect are related to colonial history and early institutions, and are robust to the use of alternative data and estimation techniques.

Keywords: Critical junctures; Democracy; Economic development; Income; Institutions; Modernization hypothesis (search for similar items in EconPapers)
JEL-codes: O10 P16 (search for similar items in EconPapers)
Date: 2012-12
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Citations: View citations in EconPapers (2)

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Working Paper: Income, Democracy, and Critical Junctures (2012)
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