Democratic Capital: The Nexus of Political and Economic Change

Torsten Persson () and Guido Tabellini

No 12175, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the joint dynamics of economic and political change. Predictions of the simple model that we formulate in the paper get considerable support in a panel of data on political regimes and GDP per capita for about 150 countries over 150 years. Democratic capital -- measured by a nation's historical experience with democracy and by the incidence of democracy in its neighborhood -- reduces the exit rate from democracy and raises the exit rate from autocracy. In democracies, a higher stock of democratic capital stimulates growth in an indirect way by decreasing the probability of a successful coup. Our results suggest a virtuous circle, where the accumulation of physical and democratic capital reinforce each other, promoting economic development jointly with the consolidation of democracy.

JEL-codes: D70 H11 N10 O11 (search for similar items in EconPapers)
Date: 2006-04
Note: IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (72)

Published as Torsten Persson & Guido Tabellini, 2009. "Democratic Capital: The Nexus of Political and Economic Change," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(2), pages 88-126, July.

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Related works:
Journal Article: Democratic Capital: The Nexus of Political and Economic Change (2009)
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)
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