democracy, elections, and development

Democracy and Economic Development

ERF 21st Annual Conference

Gammarth, TunisiaMarch 20-22, 2015

Democracy,Elections, andDevelopment

AdamPrzeworski

Introduction

DemocracyandDevelopment

DevelopmentandDemocracy

DemocracyandDevelopment:Variance

Conclusion

Democracy, Elections, and Development

Adam Przeworski

New York University

March 20, 2015


AdamPrzeworski

Introduction




Conclusion

Plan

� Democracy and Development

� Development and Democracy

� elections and democracy

� Back to democracy and development


AdamPrzeworski

Introduction




Conclusion

Plan

� Democracy and Development� Development and Democracy

� elections and democracy

� Back to democracy and development


AdamPrzeworski

Introduction




Conclusion

Democracy and Development:Introduction

� What to believe, with what certainty?

� Many brilliant ideas, few rejected by data� What do I believe?

� On average, non-democracies certainly do not grow fasterthan democracies

� Possibly democracies grow faster, but hard to tell


AdamPrzeworski

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Conclusion


� What to believe, with what certainty?� Many brilliant ideas, few rejected by data

� What do I believe?




AdamPrzeworski

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Conclusion


� What to believe, with what certainty?� Many brilliant ideas, few rejected by data� What do I believe?




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Conclusion

Sources of di¤erent results

� Measures of democracy

� Dependent variable: levels or growth rates, total GDP orper capita

� Channels: speci�cations� Treatment of endogeneity� Organization of data: annual, 5-year average, accumulatedexperience, focus on transitions

� Estimators: �xed e¤ects?� Data sources: di¤erent versions of PWT, Maddison (levelscorrelate highly, growth rates less so)

� Samples: periods and coverage (inclusion of communistcountries)


AdamPrzeworski

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Conclusion


� Measures of democracy� Dependent variable: levels or growth rates, total GDP orper capita





AdamPrzeworski

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Conclusion



� Channels: speci�cations

� Treatment of endogeneity� Organization of data: annual, 5-year average, accumulatedexperience, focus on transitions




AdamPrzeworski

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Conclusion



� Channels: speci�cations� Treatment of endogeneity

� Organization of data: annual, 5-year average, accumulatedexperience, focus on transitions




AdamPrzeworski

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AdamPrzeworski

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� Estimators: �xed e¤ects?

� Data sources: di¤erent versions of PWT, Maddison (levelscorrelate highly, growth rates less so)



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AdamPrzeworski

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Measures of democracy

� Conceptual di¤erences: competitive elections (ACLP, Boixet al) versus constraints on chief executive (Polity) versus"freedom" (Freedom House)

� Dichotomous versus multinomial versus continuous (butalways limited, calling for non-linear models)

� Reproducible versus subjective� Some di¤erences subtle: my own 2000 results biasedagainst young democracies by requiring alternation to haveactually occurred (Knutsen and Wig 2015)


AdamPrzeworski

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� Reproducible versus subjective

� Some di¤erences subtle: my own 2000 results biasedagainst young democracies by requiring alternation to haveactually occurred (Knutsen and Wig 2015)


AdamPrzeworski

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� Reproducible versus subjective� Some di¤erences subtle: my own 2000 results biasedagainst young democracies by requiring alternation to haveactually occurred (Knutsen and Wig 2015)


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Conclusion

Per capita income

� Normatively relevant but

� Growth of per capita income = Growth of total income -growth of population

� Di¤erent processes, to some extent independent� Population growth slower under democracy� Replicating positive results shows all the action is inpopulation growth


AdamPrzeworski

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Conclusion

Per capita income

� Normatively relevant but� Growth of per capita income = Growth of total income -growth of population



AdamPrzeworski

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Conclusion

Per capita income


� Di¤erent processes, to some extent independent

� Population growth slower under democracy� Replicating positive results shows all the action is inpopulation growth


AdamPrzeworski

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Conclusion

Per capita income


� Di¤erent processes, to some extent independent� Population growth slower under democracy

� Replicating positive results shows all the action is inpopulation growth


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Per capita income




AdamPrzeworski

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Endogeneity

� 90% of 483 estimates summarized by D&U takedemocracy as exogenous

� Democracy grows faster because it is a democracy orbecause of conditions that generate democracy?

� Democracies survive in developed countries and no incomematches for developed democracies

� Selection bias� In my experience Heckman and matching generate similarresults but di¤ering from IV


AdamPrzeworski

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Conclusion

Endogeneity




� Selection bias

� In my experience Heckman and matching generate similarresults but di¤ering from IV


AdamPrzeworski

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Conclusion

Endogeneity




� Selection bias� In my experience Heckman and matching generate similarresults but di¤ering from IV


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Conclusion

Channels

� Democracy -> X (investment, education, ...) -> growth,or

� Democracy -> growth, given X?

� Post-treatment bias (King and Zeng): possible to changeone without another?


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Conclusion

Conclusions

� The rest is too detailed to be summarized, but matters

� To my best knowledge:

� No post-1980 study shows that non-democracies growfaster (by per capita income)

� Results are all over the place whether democracies growfaster

� Final word? I no longer believe it is possible.� E¤ect of transitions: may depend on when


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Conclusions

� The rest is too detailed to be summarized, but matters� To my best knowledge:





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Conclusions




� Final word? I no longer believe it is possible.

� E¤ect of transitions: may depend on when


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Conclusions






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Development and Democracy:Introduction

� No doubt that once established, democracies survive inhigher income countries

� Argentina 1976

� Again, endless controversies about the impact ofdevelopment on establishing democracy

� Will not summarize, instead focus on elections


AdamPrzeworski

Introduction




Conclusion

How do democracies stabilize?

� Suppose a regime breaks down: coup, civil war, massevents, other major irregularities resulted in change ofgovernment

� Typically rush to hold an election: 58 percent within 30months

� Elections make the new regime last longer:

� without an election expected life is 20 years� with election without opposition 25 years� with contested election 46 years� and following an alternation 87 years


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� Elections make the new regime last longer:� without an election expected life is 20 years

� with election without opposition 25 years� with contested election 46 years� and following an alternation 87 years


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� Elections make the new regime last longer:� without an election expected life is 20 years� with election without opposition 25 years

� with contested election 46 years� and following an alternation 87 years


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� Elections make the new regime last longer:� without an election expected life is 20 years� with election without opposition 25 years� with contested election 46 years

� and following an alternation 87 years


AdamPrzeworski

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Conclusion




� Elections make the new regime last longer:� without an election expected life is 20 years� with election without opposition 25 years� with contested election 46 years� and following an alternation 87 years


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Conclusion

Alternations

� Partisan alternations in o¢ ce resulting from elections

� First di¢ cult: as of 2009, 68 countries, including Chinaand Russia never experienced one

� Di¢ cult because the stakes are unknown and may be high:

� What will the winners do to the losers? Just send them tolegal opposition or freedom, exile, fortune, life?

� Defeat or destroy? (US in 1800, Putin today)

� Once one occurs,

� subsequent alternations likely� moreover, regime breakdown unlikely


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Alternations



� Di¢ cult because the stakes are unknown and may be high:� What will the winners do to the losers? Just send them tolegal opposition or freedom, exile, fortune, life?


� Once one occurs,

� subsequent alternations likely� moreover, regime breakdown unlikely


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Alternations





� Once one occurs,� subsequent alternations likely

� moreover, regime breakdown unlikely


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Alternations





� Once one occurs,� subsequent alternations likely� moreover, regime breakdown unlikely


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Outcomes of subsequent elections given the number of pastalternations within an electoral spellPast Number of Pr(lost) Pr(obeyjlost) Pr(alternation)alt elections0 1221 0.14 0.83 0.121 353 0.33 0.88 0.302 162 0.47 0.95 0.453 102 0.44 0.93 0.42

>3 413 0.41 1.00 0.41Total 2251 0.24 0.91 0.22


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The probability of regime breakdown given the number of pastalternations within a spellPast Alt Spells Censored Broke Pr(broke) Pr(morejunc)

0 423 53 214 0.51 0.421 156 27 26 0.18 0.792 102 17 13 0.13 0.853 72 25 5 0.07 0.894 42 10 4 0.09 0.885 28 4 1 0.04 0.966 23 4 1 0.04 0.95

>6 18 18 0 0.00 1.00


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Competitive elections areself-institutionalizing

� Breakdowns less likely at higher incomes

� but income growth seems not to matter (endogeneityproblems perhaps irresolvable)

� Yet, careful, unemployment may matter

� Poland 1989-1993.


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Conclusion


� Breakdowns less likely at higher incomes� but income growth seems not to matter (endogeneityproblems perhaps irresolvable)

� Yet, careful, unemployment may matter

� Poland 1989-1993.


AdamPrzeworski

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Conclusion


� Breakdowns less likely at higher incomes� but income growth seems not to matter (endogeneityproblems perhaps irresolvable)

� Yet, careful, unemployment may matter� Poland 1989-1993.


AdamPrzeworski

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Conclusion

Variance of growth rates� On any list, almost all tigers are autocracies and alldisasters are autocracies

� Variance of growth rates 3 times higher undernon-democracies

� Not because of classi�cation:� Still twice as large when distinguishing democratic andnon-democratic spells

� Still 1.6 larger when distinguishing spells under the sameleader

� Explanations:

� Fire alarm (Sen)� Diversi�cation of projects to build coalitions� Shadow of force

� Elections are competitive and peaceful if their outcomesmay some di¤erence but not too much di¤erence

� Whatever, democracies pucker along at a steady rate(even if sometimes punctuated by crises) whilenon-democracies are volatile


AdamPrzeworski

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Conclusion

Variance of growth rates� On any list, almost all tigers are autocracies and alldisasters are autocracies� Variance of growth rates 3 times higher undernon-democracies



� Explanations:





AdamPrzeworski

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Conclusion


� Not because of classi�cation:

� Still twice as large when distinguishing democratic andnon-democratic spells


� Explanations:





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� Explanations:





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� Explanations:� Fire alarm (Sen)

� Diversi�cation of projects to build coalitions� Shadow of force




AdamPrzeworski

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� Explanations:� Fire alarm (Sen)� Diversi�cation of projects to build coalitions

� Shadow of force




AdamPrzeworski

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Conclusion




� Explanations:� Fire alarm (Sen)� Diversi�cation of projects to build coalitions� Shadow of force




AdamPrzeworski

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Conclusion

Political "instability" and growth

� Lots of literature but startling that

� many events �changes of chief executives, massdemonstrations, general strikes � that cause economiccrises under autocracies do not a¤ect growth underdemocracies

� Regular and expected under democracy, a sign of regimeweakness under autocracy


AdamPrzeworski

Introduction




Conclusion

Political "instability" and growth

� Lots of literature but startling that� many events �changes of chief executives, massdemonstrations, general strikes � that cause economiccrises under autocracies do not a¤ect growth underdemocracies

� Regular and expected under democracy, a sign of regimeweakness under autocracy


AdamPrzeworski

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Conclusion

Conclusion: upbeat

� Even if average rates are the same,

� democracies enable people to plan their lives (with allkinds of consequences, including fertility)

� democracies enable people to express their political viewswithout a threat to the regime and to growth

� The only mechanism we know that processes con�icts inpeace and (some) freedom


AdamPrzeworski

Introduction




Conclusion

Conclusion: upbeat

� Even if average rates are the same,� democracies enable people to plan their lives (with allkinds of consequences, including fertility)

� democracies enable people to express their political viewswithout a threat to the regime and to growth

� The only mechanism we know that processes con�icts inpeace and (some) freedom

Democracy and Economic Development

ERF 21st Annual Conference

Gammarth, TunisiaMarch 20-22, 2015

democracy, elections, and development

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