The effect of income on democracy revisited a flexible distributional approach

Abstract

We reexamine the effect of economic development on the level of democracy based on the data sets of Acemoglu et al. (2008) with a novel regression specification utilizing a zero-one-inflated beta distribution for the response variable democracy. Contrary to the results of Acemoglu et al. (2008), some support of a positive association between income and democracy is found when assuming that the variance of explanatory variables is heterogenous. In particular, our results show that rising income is associated with a higher probability of becoming fully democratic, but income is not generally associated with the mean level of democracy.

Nomadic Concepts, Variable Choice, and the Social Sciences

“…However, Krauss’ discussion also highlights that despite these apparent problems, different social scientists do judge that “democracy” is a good variable to use, and debate about the link between “democracy” and other variables continues. For example, Martins (2016) assesses the link between democracy and popular rebellion in contemporary Brazil, and Idzalika, Kneib, and Martinez-Zarzoso (2019, 1) reassess the relationship between income and democracy and conclude that “rising income is associated with a probability of becoming fully democratic, but income is not generally associated with the mean level of democracy.” The 2018 Report of the International Panel on Social Progress (chapter 14) devotes a chapter to the link between inequality and democracy. While Krauss is convinced that he is right that “democracy” and “inequality” are bad variables, other social scientists disagree.…”