Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/24853
Authors: 
Paldam, Martin
Gundlach, Erich
Year of Publication: 
2008
Series/Report no.: 
Kiel working paper 1459
Abstract: 
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.
Subjects: 
Paths of development
democracy
biogeography
JEL: 
B25
O1
Document Type: 
Working Paper

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