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Income and democracy: Evidence from nonlinear estimations

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  • Benhabib, Jess
  • Corvalan, Alejandro
  • Spiegel, Mark M.

Abstract

We test the relation between income and democracy during the postwar period. We employ panel estimation methods that explicitly allow for the fact that the primary measures of democracy are censored with substantial mass at the boundaries. We find that the statistically significant positive income–democracy relationship is robust to the inclusion of country fixed effects.

Suggested Citation

  • Benhabib, Jess & Corvalan, Alejandro & Spiegel, Mark M., 2013. "Income and democracy: Evidence from nonlinear estimations," Economics Letters, Elsevier, vol. 118(3), pages 489-492.
    • Handle: RePEc:eee:ecolet:v:118:y:2013:i:3:p:489-492
    DOI: 10.1016/j.econlet.2012.12.015
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    References listed on IDEAS

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    1. Jeffrey M. Wooldridge, 2005. "Simple solutions to the initial conditions problem in dynamic, nonlinear panel data models with unobserved heterogeneity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(1), pages 39-54, January.
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    More about this item

    Keywords

    Income; Democracy; Modernization theory; Censoring; Dynamic panel;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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