Reevaluating the modernization hypothesis

Daron Acemoglu, Simon Johnson, James Robinson and Pierre Yared

Journal of Monetary Economics, 2009, vol. 56, issue 8, 1043-1058

Abstract: We revisit and critically reevaluate the widely accepted modernization hypothesis which claims that per capita income causes the creation and the consolidation of democracy. Existing studies find support for this hypothesis because they fail to control for the presence of omitted variables. Controlling for these factors either by including country fixed effects in a linear model or by including parameterized random effects in a nonlinear double hazard model removes the correlation between income and the likelihood of transitions to and from democratic regimes. In addition, the estimated fixed effects from the linear model are related to historical factors that affect both the level of income per capita and the likelihood of democracy in a country. This evidence is consistent with the idea that events during critical historical junctures can lead to divergent political-economic development paths, some leading to prosperity and democracy, others to relative poverty and non-democracy.

Keywords: Democracy; Economic; growth; Institutions; Political; development (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (163)

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Related works:
Working Paper: Reevaluating the Modernization Hypothesis (2007)
Working Paper: Reevaluating the Modernization Hypothesis (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:56:y:2009:i:8:p:1043-1058

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