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American Economic Journal: Macroeconomics: Vol. 2 No. 4 (October 2010)

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Do Output Contractions Trigger Democratic Change?

Article Citation

Burke, Paul J., and Andrew Leigh. 2010. "Do Output Contractions Trigger Democratic Change?." American Economic Journal: Macroeconomics, 2(4): 124-57.

DOI: 10.1257/mac.2.4.124

Abstract

Does faster economic growth increase pressure for democratic change, or reduce it? Using data for 154 countries for the period 1963-2007, we examine the short-run relationship between economic growth and moves toward and away from greater democracy. To address the potential endogeneity of economic growth, we use variation in precipitation, temperatures, and commodity prices as instruments for a country's rate of economic growth. Our results indicate that more rapid economic growth reduces the short-run likelihood of institutional change toward democracy. Output contractions due to adverse weather shocks appear to have a particularly important impact on the timing of democratic change. (JEL D72, E23, E32, O11, O17, O47)

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Authors

Burke, Paul J. (Australian National U)
Leigh, Andrew (Australian National U)

JEL Classifications

D72: Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
E23: Macroeconomics: Production
E32: Business Fluctuations; Cycles
O11: Macroeconomic Analyses of Economic Development
O17: Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
O47: Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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