The Democratic Transition: A Study of the Causality Between Income and the Gastil Democracy Index
26 Pages Posted: 21 Oct 2008
Date Written: October, 21 2008
The paper considers the transformation of the political system as countries pass through the Grand Transition from a poor developing country to a wealthy developed country. In the process most countries change from an authoritarian to a democratic political system. This is shown by using the Gastil democracy index from Freedom House. First, the basic pattern of correlations reveals that a good deal of the short- to medium-run causality appears to be from democracy to income. Then a set of extreme biogeographic instruments is used to demonstrate that the long-run causality is from income to democracy. The long-run result survives various robustness tests. We show how the Grand Transition view resolves the seeming contradiction between the long-run and the short- to medium-run effects.
Keywords: Paths of development, democracy, biogeography
JEL Classification: B25, O1
Suggested Citation: Suggested Citation