3: Does Democracy cause Growth or is it the other way around?

Question 1

3 different approaches to measuring democracy + difficulties

Answer 1

1. democracy-dictator measure (Cheibub, Gandhi, Vreeland, 2010)
   - country as a dictatorship if it fails one of four conditions (chief elective elected directly/indirectly, legislature elected, more than one party in elections, alternation in power under identical electoral rules has taken place)
   - dichotomous measure so you are either a democracy or a dictatorship, no in-between
   - no measure of who gets to vote and who doesn’t (universal suffrage)
2. polity IV (Marshall, Gurr and Jaggers, 2016)
   - polity score based on five dimensions (competitiveness of executive recruitment, openness of executive recruitment, constraints on the executive like separation of power + checks and balances, regulation of political participation, competitiveness of political participation)
   - score goes from -10 to +10 so where are the cut-off points? is it just 6-10 for democracy and -6-10 for dictatorship with a mixed regime in between?
   - aggregation problems mean the measure is imprecise (democracy is not linear)
3. freedom house
   - based on two dimensions (level of political and civil rights)
   - substantive view of democracy so the risk of circular reasoning
   - same problems of polity IV
   - is it reliable and replicable? we do not know how it is calculated so how can we replicate the research and see if there is a political agenda behind it
   - some things within the questions are useful but not clear to what extent they are connected with democracy

Question 2

modernisation theory

Answer 2

developed in the 1950s and 1960s - European model of modernisation projected on developing countries

set of prerequisites for democracy (urbanisation/education, literary/media-press as stepping stones) - Rostow 1957

in a reduced form, income causes democracy - idea is that wealth as we know it is linked to the level of education of the people so if you are wealthy, you can be educated and that plays a role to the extent to which income makes an effect on democracy

Question 3

conceptual framework of Acemoglu and Robinson

Answer 3

political institutions and distribution of resources determine de jure and de facto political power
- de jure as who is the PM? so it is dependent on political institutions
- de facto as who does the PM have to listen to? so it is dependent on distribution of resources
de jure political power comes from political institutions in society whereas de facto political power means that groups of individuals can influence the behaviour of others even if they are not allocated power by political institutions

people in power choose political institutions in the future (to conserve power) and choose economic institutions now

economic institutions relate to the structure of property rights and the presence and perfection of markets
- can lead to different distribution of resources so conflict of interest on what institutions to choose

Question 4

democratisation theory of Acemoglu and Robinson

Answer 4

democracy works as a credible commitment from the elites to the general population to better economic institutions not only today, but also in the future (check both in the present and future)

assumption that democratisation has spillover effects on neighbouring countries and that it has a 20% long-run effect on GDP per capita