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The agricultural and the democratic transitions - Causality and the Roundup model

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  • Erich Gundlach

    (Kiel Institute for the World Economy, Germany)

  • Martin Paldam

    (School of Economics and Management, University of Aarhus, Denmark)

Abstract

Long-run development (in income) causes a large fall in the share of agriculture commonly known as the agricultural transition. We confirm that this conventional wisdom is strongly supported by the data. Long-run development (in income) also causes a large increase in democracy known as the democratic transition. Elsewhere we have shown that it is almost as strong as the agricultural transition. Recently, a method has been presented to weed out spuriousness. It makes the democratic transition go away by turning income insignificant, when it is supplemented by a set of formal controls. We show that the same method makes the agricultural transition go away as well. Hence, it seems to be a method that kills far too much, as suggested by the subtitle. This suggestion leads to a discussion of the very meaning of long-run causality.

Suggested Citation

  • Erich Gundlach & Martin Paldam, 2009. "The agricultural and the democratic transitions - Causality and the Roundup model," Economics Working Papers 2009-06, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2009-06
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    References listed on IDEAS

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    10. Erich Gundlach & Martin Paldam, 2008. "The Democratic Transition. A study of the causality between income and the Gastil democracy index," Economics Working Papers 2008-15, Department of Economics and Business Economics, Aarhus University.
    11. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
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    Cited by:

    1. Askarov, Zohid & Doucouliagos, Hristos, 2015. "Development Aid and Growth in Transition Countries," World Development, Elsevier, vol. 66(C), pages 383-399.
    2. Zohid Askarov & Hristos Doucouliagos, 2013. "Does aid improve democracy and governance? A meta-regression analysis," Public Choice, Springer, vol. 157(3), pages 601-628, December.
    3. Robert H. Bates & Ghada Fayad & Anke Hoeffler, 2012. "The state of democracy in Sub-Saharan Africa," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 15(4), pages 323-338, December.

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    More about this item

    Keywords

    Long-run growth; transitions; causality and spuriousness;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • P5 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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