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)
Burke, Paul J., and Andrew Leigh.
"Do Output Contractions Trigger Democratic Change?"
American Economic Journal: Macroeconomics,
Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
Business Fluctuations; Cycles
Macroeconomic Analyses of Economic Development
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence