ECONOMIC DEVELOPMENT AND DEMOCRACY

In this essay, I review recent research on the effects of economic development on democracy. On the theoretical side, for the first time there has been a systematic attempt to bring the types of formal models developed by economists and political scientists outside of comparative politics to bear on the origins of democracy. I present a simple analytical framework that captures some of the results in this literature. On the empirical side, the issue of identifying causal relationships in the data is finally receiving attention. However, the application of techniques adopted from best-practice econometrics shows no evidence that economic development has a causal effect on democracy. Neither does it support the idea that economic development influences the probability of coups but not democratizations. More likely, and in line with the model I develop, income per capita and democracy are correlated because the same features of a society simultaneously determine how prosperous and how democratic it is. There is still a lot to learn on this topic.