Income, Democracy, and Critical Junctures

Matteo Cervellati, Florian Jung, Uwe Sunde and Thomas Vischer ()
Additional contact information
Thomas Vischer: University of Munich

No 7069, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 effects 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)
Pages: 43 pages
Date: 2012-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - substantially revised version published in: American Economic Review, 2014, 104 (2), 707-719

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