Working Paper: CEPR ID: DP9259
Authors: Matteo Cervellati; Florian Jung; Uwe Sunde; Thomas Vischer
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 effect 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
JEL Codes: O10; P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| income (E25) | democracy (D72) |
| income (E25) | democracy (in non-colonies) (D72) |
| income (E25) | democracy (in former colonies) (F54) |
| democracy (D72) | income (E25) |