Working Paper

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


  • Gundlach
  • E.
  • Paldam
  • M.
Publication Date

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.


JEL Classification
D72, O43

Key Words

  • democracy
  • fixed-effects estimation
  • Modernization hypothesis