Income and Democracy: Lipset's Law Revisited

Author/Editor:

Anke Hoeffler ; Robert H. Bates ; Ghada Fayad

Publication Date:

December 17, 2012

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

We revisit Lipset‘s law, which posits a positive and significant relationship between income and democracy. Using dynamic and heterogeneous panel data estimation techniques, we find a significant and negative relationship between income and democracy: higher/lower incomes per capita hinder/trigger democratization. Decomposing overall income per capita into its resource and non-resource components, we find that the coefficient on the latter is positive and significant while that on the former is significant but negative, indicating that the role of resource income is central to the result.

Series:

Working Paper No. 2012/295

Subject:

Income shocks National income Natural resources Personal income

English

Publication Date:

December 17, 2012

ISBN/ISSN:

9781475596649/1018-5941

Stock No:

WPIEA2012295

Pages:

26

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