Democratic Capital: The Nexus of Political and Economic Change / Torsten Persson, Guido Tabellini.

Format:

Book

Author/Creator:

Persson, Torsten.

Contributor:

National Bureau of Economic Research.

Tabellini, Guido.

Series:

Working Paper Series (National Bureau of Economic Research) no. w12175.

NBER working paper series no. w12175

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Democratic Capital

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2006.

Summary:

We study the joint dynamics of economic and political change. Predictions of the simple model that we formulate in the paper get considerable support in a panel of data on political regimes and GDP per capita for about 150 countries over 150 years. Democratic capital -- measured by a nation's historical experience with democracy and by the incidence of democracy in its neighborhood -- reduces the exit rate from democracy and raises the exit rate from autocracy. In democracies, a higher stock of democratic capital stimulates growth in an indirect way by decreasing the probability of a successful coup. Our results suggest a virtuous circle, where the accumulation of physical and democratic capital reinforce each other, promoting economic development jointly with the consolidation of democracy.

Notes:

Print version record

April 2006.