Democratic Capital: The Nexus of Political and Economic Change

Torsten Persson () and Guido Tabellini

American Economic Journal: Macroeconomics, 2009, vol. 1, issue 2, 88-126

Abstract: We study the dynamics of economic and political change, theoretically and empirically. Democratic capital measured by a nation's historical experience with democracy, and the incidence of democracy in its neighborhood, appears to reduce exit rates from democracy and raise exit rates from autocracy. Higher democratic capital stimulates growth by increasing the stability of democracies. Heterogeneous effects of democracy induce sorting of countries into political regimes, which helps explain systematic differences between democracies and autocracies. Our results suggest the possibility of a virtuous circle, where accumulation of physical and democratic capital reinforce each other, promoting economic development and consolidation of democracy. (JEL D72, I31, N10, N40, O47)

JEL-codes: D72 I31 N10 N40 O47 (search for similar items in EconPapers)
Date: 2009
Note: DOI: 10.1257/mac.1.2.88
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (338)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/mac.1.2.88 (application/pdf)
http://www.aeaweb.org/aej/mac/data/2007-0049_data.zip (application/zip)
http://www.aeaweb.org/aej/mac/app/2007-0049_app.pdf (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Democratic capital: The nexus of political and economic change (2006)
Working Paper: Democratic Capital: The Nexus of Political and Economic Change (2006)
Working Paper: Democratic capital: The nexus of political and economic change (2006)
Working Paper: Democratic Capital: The Nexus of Political and Economic Change (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejmac:v:1:y:2009:i:2:p:88-126

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Journal: Macroeconomics is currently edited by Simon Gilchrist

More articles in American Economic Journal: Macroeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().