Scholarly Comments on Academic Economics

Should the Modernization Hypothesis Survive Acemoglu, Johnson, Robinson, and Yared? Some More Evidence

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Abstract

An important dimension of the “modernization hypothesis” is the claim that there is a long-run positive relation between socio-economic development and political democracy. This research strand of the modernization hypothesis, however, has been challenged in a series of papers by Daron Acemoglu, Simon Johnson, James Robinson, and Pierre Yared. Employing econometric specifications that condition on lagged democracy, income, education, time effects, and a proxy for the level of capitalist institutions, and applying the System Generalized Method of Moments estimator to a sample that spans recent decades, we find, in congruence with the modernization hypothesis, that income and education predict democracy.

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Volume (Issue)
Pages
17-36
Published
JEL classification
C33, D72, O10, P10, P16
Keywords
Modernization hypothesis, political development, capitalism, system GMM estimator
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