Do Political Regime Changes Help Predict Growth Takeoffs?

Do political regime changes as well as the quality of political institutions help predict the turning points in a country's growth history? I show that controlling for a variety of economic factors, both democratic and autocratic regime changes help predict growth “takeoffs†. However, I find evidence that countries with low levels of income per capita benefit less from democratizations. This threshold level of income is estimated using Hansen's threshold regression methodology. The threshold regression approach also reveals non-linearities in the effect of trade openness and level of political development on growth. In particular, I find that countries in the mid-range of trade openness benefit the most from an increase in trade volumes. In addition, the paper presents a methodology for identifying growth takeoffs which defines takeoffs relative to country's own economic history while taking into account the historical growth conditions in the rest of the world.