We reexamine the effect of economic development on the level of democracy based on the data sets of Acemoglu et al. (Am Econ Rev 98(3):808–842, 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 for 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 probability of becoming fully democratic, but income is not generally associated with the mean level of democracy.
Income Democracy Beta distribution Bimodal OECD
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The authors are grateful to the anonymous referee of this journal for their constructive comments and also to Jennifer Phillips for proofreading this article.
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