Income and Democracy: A Comment on Acemoglu, Johnson, Robinson, and Yared (2008)
Univ. of Aarhus Economics Working Paper No. 2008-13
12 Pages Posted: 15 Oct 2008
Date Written: October 15, 2008
Acemoglu, Johnson, Robinson, and Yared (2008) demonstrate that estimation of the standard adjustment model with country-fixed and time-fixed effects removes the statistical significance of income as a causal factor of democracy. We argue that their empirical approach must produce insignificant income effects and that a small change in the estimation process immediately reveals the strong effect of income on democracy.
Keywords: Democracy, Modernization hypothesis, fixed-effects estimation
JEL Classification: D72, O43
Suggested Citation: Suggested Citation