Does democracy drive income in the world, 1500–2000?

Madsen, Jakob B.; Raschky, Paul A.; Skali, Ahmed

doi:10.1016/j.euroecorev.2015.05.005

Cited by 77 publications

(66 citation statements)

References 86 publications

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“…where is the per capita GDP. Sakyi (2011), Narayan, Narayan, and Smyth (2011), Daron Acemoglu, Francisco A. Gallego, and James A. Robinson (2014a); Murtin and Wacziarg (2014) and Madsen, Raschky, and Skali (2015) also considered the per capita income (GDP) and applied a similar approach in their analysis. The data on per capita GDP and PPP (current value in US$) were taken from the WDI DataBank (2017).…”

Section: Data Methodology and Analysis Resultsmentioning

confidence: 99%

“…Minier (1998), Matthew A. Baum and David A. Lake (2003), Roberto Rigobon and Dani Rodrik (2004), Sugata Ghosh and Andros Gregorio (2009), Vishal Chandr Jaunky (2013), Daron Acemoglu et al (2014b), Madsen, Raschky, and Skali (2015) find a positive direct and/or indirect effect of democracy on growth, economic performance, and income in different samples. Democracy level is reported to have a negative effect on economic growth by You (2011), and Aisen and Veiga (2013) and on income by Paresh Kumar Narayan, Seema Narayan, and Russell Smyth (2011).…”

Section: Relationship Between Democracy and Income/growthmentioning

confidence: 99%

“…It can be argued that there has always been a correlation between democracy level and per capita income. Some researchers (Fabrice Murtin and Romain Wacziarg, 2014; Jacob M. Madsen, Paul A. Raschky, and Ahmed Skali, 2015) have also cited a transitional relationship between democracy and income. However, whether or not autocratic regimes hinder a high level of economic income is a controversial issue.…”

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The effect of democracy on income: An analysis of countries affected by coups d’état

Saray

2021

Panoeconomicus

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Although there is a considerable amount of study which examines the effect of democracy on national income, a limited number of papers analyses the effect of democracy on per capita income. The main objective of this research is to show the effect of democracy level on per capita income among new sample, 21 countries which share a similar coup d'état experience in their political history, to fulfil the gap in the literature. The countries selected are from different continents and are those most affected by coups. The impact of two different democracy indicators (Freedom House and Polity IV) on the per capita income of the countries in the period 2000-2014 is analysed. The results of the panel data estimation show that, an increase in democracy level has a positive effect on per capita income for both democracy indicators. As expected, the effect of the investment, secularism and education variables on income is positive, whereas the effect of population growth rate is negative. And trade has no definite effect on per capita income.

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Section: Data Methodology and Analysis Resultsmentioning

confidence: 99%

Section: Relationship Between Democracy and Income/growthmentioning

confidence: 99%

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confidence: 99%

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The effect of democracy on income: An analysis of countries affected by coups d’état

Saray

2021

Panoeconomicus

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“…A few studies have used political institutions in neighbouring countries as an instrumental variable for political institutions in a country under investigation. For example, using a sample of 141 countries, Madsen et al (2015) use linguistic distance-weighted foreign democracy as an instrument for domestic democracy. These and similar studies, thus establish an important point in democracy-growth relationship: Both democratisation and the democratic stock in one country can trigger dynamic spatial spillover effects in countries with spatial proximity.…”

Section: Synoptic View Of the Literaturementioning

confidence: 99%

Arab Countries between Winter and Spring: Where Democracy Shock Goes Next!

2019

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We examine the role of democracy shocks in the cross-country economic growth processes over a period of five decades since 1960. The recent uprisings that arose independently and spread across the Arab world form the main context of our investigation. We study if (i) a shock to democracy in one country triggers institutional reforms and growth upsurge in the neighbouring countries, and (ii) the magnitude and direction of response to democracy shocks are contingent upon income pathways of countries. To estimate the spillover effects of democracy shocks, we model and estimate growth interdependence among individual countries with similar democratic characteristics. To study the nature of responses of democracy shocks on cross-country growth processes, we build and estimate a Global Vector Autoregression (GVAR) model where we allow countries to be interdependent with regard to bilateral migration and geographical proximity. Using the GVAR model, we also stimulate a positive shock to democracy in Egypt-the most populous Arabic country-and study its impacts on institutional reforms and economic growth in the rest of the Arab World. We find that high and upper-middle income countries are immune to democracy shocks in Egypt, whereas the lower middle and low income countries are susceptible to another revolutionary wave.

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“…Their focus lies on correlating democratic transitions with education and income levels, but they do not consider constitutional similarity or European influence more broadly. Madsen et al (2015), on the other hand, use data for political regimes, income and human capital from 1820-2000 and 1500-2000 to examine the income and growth effects of democracy while controlling for human capital and other key variables. They find that their measure of democracy is a significant determinant of income and growth.…”

Section: Introductionmentioning

confidence: 99%

European influence and economic development

Eicher

Kuenzel

2019

Canadian J of Economics

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The development accounting literature identifies political institutions as fundamental development determinants. Forms of government or executive constraints are thought to shape economic institutions (e.g., property rights) that provide necessary incentives for economic growth. One strand of the literature suggests that European influence is a crucial economic development determinant, presumably through the adoption of European institutions. But how exactly did European influence in the distant past induce positive economic outcomes today? Previous approaches rely on “language,” “settler mortality,” “legal origins” or the “number of European settlers” as indirect proxies of European influence. We propose a direct and quantifiable mechanism: the adoption of European constitutional features. We construct a dataset of all constitutional dimensions from 1800–2008 for all countries and find that nations experience growth accelerations after adopting features of European constitutions. The growth effects are influenced (negatively) by periods of political turmoil, but they are independent of colonial backgrounds. These results show how European influence may have fostered growth, and they imply that countries were able to overcome adverse initial conditions over the last 200 years by adopting European constitutional features. Our constitutional dataset is sufficiently detailed to identify the specific dimensions of European constitutions that matter most for development: legislative rules and specific provisions that curtail executive powers.

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Does democracy drive income in the world, 1500–2000?

Cited by 77 publications

References 86 publications

The effect of democracy on income: An analysis of countries affected by coups d’état

The effect of democracy on income: An analysis of countries affected by coups d’état

Arab Countries between Winter and Spring: Where Democracy Shock Goes Next!

European influence and economic development

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