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  

Martin Paldam

University of Aarhus - Department of Economics

Erich Gundlach

University of Hamburg

Date Written: October 15, 2008

Abstract

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

Paldam, Martin and Gundlach, Erich, Income and Democracy: A Comment on Acemoglu, Johnson, Robinson, and Yared (2008) (October 15, 2008). Univ. of Aarhus Economics Working Paper No. 2008-13. Available at SSRN: https://ssrn.com/abstract=1284925 or http://dx.doi.org/10.2139/ssrn.1284925

Martin Paldam (Contact Author)

University of Aarhus - Department of Economics ( email )

Universitetsparken
Building 350
DK-8000 Aarhus C
Denmark
+45 8942 1133 (Phone)
+45 8613 6334 (Fax)

Erich Gundlach

University of Hamburg ( email )

Department of Economics
Von-Melle-Park 5
Hamburg, 20146
Germany
+49 40 428384589 (Phone)

HOME PAGE: http://www.erichgundlach.de

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