Contractions in economic outputs due to drought increase the likelihood of democratic reform while short-term weather-related jumps in output decrease that likelihood. That is the core finding of a new article in the American Economic Journal: Macroeconomics by Paul Burke and Andrew Leigh (ungated version here, h/t to Kevin Lewis). The effects are substantial. The authors estimate that a one-year recession in an autocratic nation that reduced GDP per capita growth by 6 percentage points increases that country’s probability of undergoing significant democratic reform in the next year by 8 percentage points. The authors are careful to point out that these are short-term effects that do not necessarily tell us anything about long-term relationships between income and democracy. That is: shocks in economic outputs may determine the timing of regime change rather than whether a country eventually becomes (and stays) more democratic.
There is a great Jared Diamond quote to motivate the empirical inquiry: “(Maya) kings got into trouble with their peasants if a drought came, because that was tantamount to the breaking of a royal promise.” Of course we know that drought, flu, and shark attacks may also have consequences for democratic leaders. The abstract is below.
Does faster economic growth increase pressure for democratic change, or reduce it? Using data for 154 countries for the period 1963-2007, we examine the short-run relationship between economic growth and moves toward and away from greater democracy. To address the potential endogeneity of economic growth, we use variation in precipitation, temperatures, and commodity prices as instruments for a country’s rate of economic growth. Our results indicate that more rapid economic growth reduces the short-run likelihood of institutional change toward democracy. Output contractions due to adverse weather shocks appear to have a particularly important impact on the timing of democratic change.