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dc.contributor.authorMijiyawa, Abdoulen_US
dc.description.abstractThis paper analyzes the link between inflation and democracy in developing countries. In order to address the endogeneity issue of democracy, I use the date of political independence as an instrument for democratic institutions. The application of the criterion of Stock and Yogo (2002, 2005) for weak instrumental variable in my sample reveals that, the independence date is a good instrument for democratic institutions. Using five years pooled data covering the period 1960-2003, and a sample of 62 developing countries former extractive colonies (including 32 African countries); I find a robust positive causal relationship between inflation and democracy. It appears that democracy increases inflation because democracy stimulates money creation and compromises trade liberalization in my sample of developing countries. Case studies based on Chile, Ghana, and Sri Lanka better illustrate the result relating to the relationship between inflation and democracy in my sample.en_US
dc.publisherVerein für Socialpolitik, Ausschuss für Entwicklungsländer Göttingenen_US
dc.relation.ispartofseriesProceedings of the German Development Economics Conference, Zürich 2008 28en_US
dc.subject.keywordMedian voteren_US
dc.subject.keywordStabilization Policiesen_US
dc.subject.keywordWeak Instruments Testen_US
dc.titleInflation and Democracy in Former Extractive Colonies Analysis with a New Instrumental Variableen_US
dc.typeConference Paperen_US
Appears in Collections:Proceedings of the German Development Economics Conference, 2008 (Zürich)

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