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

journal contribution
posted on 2015-08-01, 00:00 authored by Jakob B Madsen, Paul A Raschky, Ahmed Skalli
Using data for political regimes, income and human capital for a sample of 141 countries over the periods 1820–2000 and 1500–2000, this research examines the income and growth effects of democracy when human capital, among other key variables, is controlled for. Linguistic distance-weighted foreign democracy is used as an instrument for domestic democracy. Democracy is found to be a significant determinant of income and growth and the result is robust to various estimation methods and covariates. We find that a one-standard deviation increase in democracy is associated with a 44–98% increase in per capita income.

History

Journal

European economic review

Volume

78

Pagination

175 - 195

Publisher

Elsevier

Location

Amsterdam, The Netherlands

ISSN

0014-2921

Language

eng

Publication classification

C1.1 Refereed article in a scholarly journal

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