Income and the (eventual) rise of democracy
Debowicz, Dario and Dickson, Alexander and MacKenzie, Ian and Sekeris, Petros (2025) Income and the (eventual) rise of democracy. Public Choice. ISSN 0048-5829 (https://doi.org/10.1007/s11127-025-01268-3)
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Abstract
We investigate the relationship between income and democracy. A theoretical framework is developed where citizens derive utility from both material goods and political rights. Citizens can devote their time either to creating material benefits or to political activism (that improves political liberties). We demonstrate a non-monotonic relationship between income and democracy. In low income countries—where the elasticity of the marginal rate of substitution between material goods and political rights is low because of small incomes—exogenous increases in income (wages) lead to a reduction in the level of political liberties: as wages increase, citizens are increasingly willing to give up time otherwise devoted to activism to work more. In high income countries, the opposite is true: political liberties increase with income. Our country fixed-effects and GMM estimations on cross-country data over 1960–2010 empirically validate this non-monotonic prediction, thereby corroborating our theory above-and-beyond the effect of institutions and culture. The predictions are equally validated for data spanning back to 1800.
ORCID iDs
Debowicz, Dario, Dickson, Alexander
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Item type: Article ID code: 92314 Dates: DateEvent7 March 2025Published7 March 2025Published Online15 February 2025Accepted27 February 2024SubmittedSubjects: Social Sciences > Economic Theory
Political Science > Political theoryDepartment: Strathclyde Business School > Economics Depositing user: Pure Administrator Date deposited: 11 Mar 2025 16:52 Last modified: 11 Mar 2025 16:52 URI: https://strathprints.strath.ac.uk/id/eprint/92314