Income and Democracy: Revisiting the Evidence
26 Pages Posted: 11 Jul 2011
Date Written: July 11, 2011
Abstract
It is well-known in the literature that income per capita is strongly correlated with the level of democracy across countries. In an influential paper, Acemoglu et al. (2008) find that this linear correlation disappears once they control for country-specific effects focusing on within-country variation. In this paper we find evidence of a non-linear effect from income to democracy even after controlling for country-specific effects. While a positive effect emerges for poor countries, this effect vanishes for rich countries.
Keywords: democracy, income, lipset hypothesis, panel data
JEL Classification: D72, E21, C23
Suggested Citation: Suggested Citation
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