Journal
ECONOMETRICA
Volume 79, Issue 3, Pages 923-947Publisher
WILEY-BLACKWELL
DOI: 10.3982/ECTA8183
Keywords
Democratization; transitory economic shocks
Categories
Funding
- Barcelona GSE
- CREI
- FEDEA-BBVA
- Spanish Ministry of Science [SEJ2007-64340, ECO2008-02779]
- ICREA Funding Source: Custom
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We show that democratic change may be triggered by transitory economic shocks. Our approach uses within-country variation in rainfall as a source of transitory shocks to sub-Saharan African economies. We find that negative rainfall shocks are followed by significant improvement in democratic institutions. This result is consistent with the economic approach to political transitions, where transitory negative shocks can open a window of opportunity for democratic improvement. Instrumental variables estimates indicate that following a transitory negative income shock of 1 percent, democracy scores improve by 0.9 percentage points and the probability of a democratic transition increases by 1.3 percentage points.
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