A farewell to critical junctures: Sorting out long-run causality of income and democracy
Erich Gundlach () and
Economics Working Papers from Department of Economics and Business Economics, Aarhus University
We consider the empirical relevance of two opposing hypotheses on the causality between income and democracy: The Democratic Transition claims that rising incomes cause a transi¬ tion to democracy, whereas the Critical Junctures hypothesis denies this causal relation. Our empirical strategy is justified by Unified Growth Theory, which hypothe¬sizes that the present international income differences have roots in the prehistoric past. Thus, we use prehistoric measures of biogeography as instruments for modern income levels, and find a large long-run causal effect of income on the degree of democracy. This result rejects the Critical Junctures hypothesis, which is an important part of the Primacy of Institutions view.
Keywords: Long-run growth; democracy; unified growth theory; biogeography (search for similar items in EconPapers)
JEL-codes: B25 O1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-pol
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Journal Article: A farewell to critical junctures: Sorting out long-run causality of income and democracy (2009)
Working Paper: A farewell to critical junctures: Sorting out long-run causality of income and democracy (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:aah:aarhec:2008-04
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