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Discussion or working paper
Erich Gundlach ,
Martin Paldam

Income and Democracy. A Comment on Acemoglu, Johnson, Robinson, and Yared (2008)

  • Abstract
    Acemoglu, Johnson, Robinson, and Yared (2008) demonstrate that estimation of the standard adjustment model with country-fixed and time-fixed effects removes the statistical significance of income as a causal factor of democracy. We argue that their empirical approach must produce insignificant income effects and that a small change in the estimation process immediately reveals the strong effect of income on democracy.

  • Keywords

    Democracy
    , 
    Modernization hypothesis
    , 
    fixed-effects estimation

  • JEL classification

    D72, O43

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