The Golden Hello and Political Transitions

34 Pages Posted: 17 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 17, 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 in-ternational 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

Suggested Citation

Aidt, Toke Skovsgaard and Albornoz, Facundo and Gassebner, Martin, The Golden Hello and Political Transitions (October 17, 2012). CESifo Working Paper Series No. 3957. Available at SSRN: https://ssrn.com/abstract=2162839

Toke Skovsgaard Aidt

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

Austin Robinson Building
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Cambridge, CB3 9DD
United Kingdom
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+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 )

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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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