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Democratization and Economic Prosperity

25 Pages Posted: 10 Apr 2013  

Daniel de Kadt

Massachusetts Institute of Technology (MIT), Department of Political Science

Stephen B. Wittels

Massachusetts Institute of Technology, Department of Political Science

Date Written: April 6, 2013

Abstract

What explains cross-national variation in economic prosperity? One line of ongoing research explores whether political institutions associated with democracy are important determinants. Devising accurate tests of this relationship is non-trivial; while the timing of democratic transitions is arguably stochastic, the process by which countries adopt democratic political practices may be endogenous to economic outcomes. We identify the e ect of democratization by comparing the economic output of democratized units with the output of synthetic counterfactuals of these same units under a condition of no democratic transition. We focus on reforms that took place in Africa in the 1990s using balanced panel data for the period 1975-2008. Our empirical approach yields an unbiased estimate (in expectation) of the e ffect of democratization for each individual treated unit under relatively modest assumptions. We find that, in the African context, formal democratization has highly heterogeneous but substantive e ffects on economic prosperity.

Keywords: Africa, democratization, economic output, heterogeneous effects

Suggested Citation

de Kadt, Daniel and Wittels, Stephen B., Democratization and Economic Prosperity (April 6, 2013). MIT Political Science Department Research Paper No. 2013-10. Available at SSRN: https://ssrn.com/abstract=2247664 or http://dx.doi.org/10.2139/ssrn.2247664

Daniel De Kadt (Contact Author)

Massachusetts Institute of Technology (MIT), Department of Political Science ( email )

Cambridge, MA
United States

Stephen Wittels

Massachusetts Institute of Technology, Department of Political Science ( email )

77 Massachusetts Avenue
Cambridge, MA 02139
United States

HOME PAGE: http://web.mit.edu/polisci/people/gradstudents/steve-wittels.html

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