The Golden Hello and Political Transitions

KOF Working Paper No. 316

34 Pages Posted: 5 Oct 2012

See all articles by Toke Skovsgaard Aidt

Toke Skovsgaard Aidt

University of Cambridge - Faculty of Economics and Politics

Facundo Albornoz

University of Birmingham

Martin Gassebner

ETH Zurich - KOF Swiss Economic Institute; CESifo (Center for Economic Studies and Ifo Institute)

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Date Written: October 4, 2012

Abstract

We analyze the influence of IMF and World Bank programs on political regime transitions. We develop an extended version of Acemoglu and Robinson's (American Economic Review 91, 2001) model of political transitions to show how the anticipation of new loans from international financial institutions can trigger political transitions which would not otherwise have taken place. We test this unexplored implication of the theory empirically. We find in a world sample from 1970 to 2002 that the anticipation of receiving new programs immediately after a political regime transition increases the probability of a transition from autocracy to democracy and reduces the probability of democratic survival.

Keywords: political transitions, democracy, autocracy, IMF, World Bank

JEL Classification: O19, D72, F59, F53

Suggested Citation

Aidt, Toke Skovsgaard and Albornoz, Facundo and Gassebner, Martin, The Golden Hello and Political Transitions (October 4, 2012). KOF Working Paper No. 316. Available at SSRN: https://ssrn.com/abstract=2156885 or http://dx.doi.org/10.2139/ssrn.2156885

Toke Skovsgaard Aidt

University of Cambridge - Faculty of Economics and Politics ( email )

Austin Robinson Building
Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom
+44 1223 33 5231 (Phone)
+44 1223 33 5475 (Fax)

Facundo Albornoz

University of Birmingham ( email )

Economics Department
Birmingham, B15 2TT
United Kingdom

Martin Gassebner (Contact Author)

ETH Zurich - KOF Swiss Economic Institute ( email )

Weinbergstrasse 35
Zurich, 8092
Switzerland

HOME PAGE: http://www.kof.ethz.ch/chair/

CESifo (Center for Economic Studies and Ifo Institute) ( email )

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Munich, DE-81679
Germany

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