Income and democracy: Revisiting the evidence

In an influential paper, Acemoglu et al. (2008) find that the positive correlation between income per capita and the level of democracy across countries vanishes once country-specific effects are accounted for. In this paper, we find evidence of a non-linear effect from income to democracy even afte...

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Bibliographic Details
Published in:Economics letters 2012-12, Vol.117 (3), p.844-847
Main Authors: Moral-Benito, Enrique, Bartolucci, Cristian
Format: Article
Language:English
Subjects:
Correlation analysis
Democracy
Income
Lipset hypothesis
Non-linear models
Panel data
Per capita
Political economy
Studies
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Summary:In an influential paper, Acemoglu et al. (2008) find that the positive correlation between income per capita and the level of democracy across countries vanishes once country-specific effects are accounted for. In this paper, we find evidence of a non-linear effect from income to democracy even after controlling for country-specific effects. In particular, our findings point to the existence of a positive effect only in low-income countries. ► We find a non-linear relationship between income and democracy. ► The effect of income on democracy is positive in poor countries. ► This positive effect vanishes in rich countries. ► Our results are robust across different non-linear specifications.
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2012.08.045