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NPL -1 0
Change in Log GDP per Capita (Penn World Tables) 2 Figure 4
Democracy Growth and Income Growth 1870-1995
Change in Polity Composite Index
.8 PRT HUN
URY BRA NOR ITA
AUT SWE NLD DNK VEN ARG
MEX JPN GBR
CAN BEL USA 0 GRC
CHN 1 1.5
Change in Log GDP per Capita (Maddison) 3.5 The Statistical Model
Panel data regressions with …xed e¤ects show no evidence that
income per-capita is positively correlated with democracy no matter
how you look at the data.
Our basic regression model which we use for the post-war and for the
100 year sample is:
dit = αdit 1 + γyit 1 0
+ xit 1β + µt + δi + uit , (1) where dit is the democracy score of country i in period t . The main
variable of interest is yit 1 , the lagged value of log income per capita.
The parameter γ therefore measures whether income has an e¤ect on
democracy. All other potential covariates are included in the vector
xit 1 . In addition, the δi ’ denote a full set of country dummies and
the µt ’ denote a full set of time e¤ects, which capture common
shocks to (common trends in) the democracy score of all coun...
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- Fall '09