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DO DEMOCRATIC TRANSITIONS PRODUCE BETTER HUMAN DEVELOPMENT OUTCOMES?
Empirical Evidence f rom 40 Years of Regime Changes
A Thesis
submitted to the Faculty of the
Graduate School of Arts and Sciences
of Georgetown University
in partial fulfillment of the requirements for the
degree of
Master of Public Policy
in Public Policy
By
Amit Reddy, M.A.
Washington, DC
April 12, 2012
iii
D0 DEMOCRATIC TRANSITIONS PRODUCE BETTER HUMAN DEVELOPMENT OUTCOMES?
Empirical Evidence f rom 40 Years of Regime Changes
Amit Reddy, M.A.
Thesis Advisor: Andreas Kern, Ph.D.
ABSTRACT
This paper examines empirically the relationship between democratic transitions
and human development outcomes. It establishes that there is a distinct difference in
long run outcomes as opposed to those in the immediate aftermath of regime changes.
In contrast to the existing literature, which focuses on the effects of transitions with
respect to economic growth, I look at democratization’s effect on domestic policy
outputs in the form of public services. Building on the theory of regime transitions, this
paper hypothesizes that transitions lead to negative human development outcomes in
the short run as new democratic institutions attempt to take hold. Unless supported by
developed nations, these worsening conditions impose pressure on fledgling
governments, leading either to transition reversals or to ‘captured’ democracies. To
explore the impact of democratic transitions on the socio-economic development
outcomes I apply panel data analysis to 161 countries between the years 1960 and 2010.
The overall aim of the paper is to study not only the factors contributing to sustainable
democratic transitions, but also to highlight the difficulties in transforming institutional
configuration and its impact on socioeconomic outcomes. In doing so, the paper
contributes to the growing literature on the political economy of transitions.
iv
This thesis is dedicated to my professors at the Georgetown Public Policy Institute, particularly my thesis advisor, Andreas Kern, without whom none of this would be
possible.
I am also indebted to the feedback of my thesis group, especially Itai Nixon for all his constructive criticism.
Thank you, Amit Reddy
v
TABLE OF CONTENTS
I. INTRODUCTION ................................................................................. 1
II. LITERATURE REVIEW AND BACKGROUND ................................... 3
III. CONCEPTUAL FRAMEWORK ............................................................ 9
Conceptual Model ............................................................................... 12
IV. DATA AND METHODOLOGY ........................................................... 15
V. EMPIRICAL RESULTS AND ANALYSIS ........................................... 19
VI. POLICY IMPLICATIONS .................................................................... 24
VII. CONCLUSION ..................................................................................... 26
Appendix A. Regression Tables ........................................................................ ... 29 Appendix B. Data Definition and Sources ....................................................... ... 32 Appendix C. …………………………………………………………………………………………… 36 C.1 Descriptive Statistics .................................................................. ... 36 C.2 Political Regime Table ............................................................... ... 38 C.3 Graphical Representation of Indicators Across Regime Types.... 40 Bibliography ......................................................................................................... 43
vi
LIST OF TABLES AND FIGURES
TABLE 1. Effects of Democratic Transition on Log Annual Difference in GDP per Capita……………………………………………........................................ 20 TABLE 2. Effects of Democratic Transition on Improvement In Safe Drinking Water Provision……...…………………………………..................................... 22
TABLE 3. Effects of Democratic Transition on Improved Sanitation Facilities………..……………………………………………............................................ 29 TABLE 4. Effects of Democratic Transition on Number of Telephone Lines per 1000 People……………………………..………........................................ 30
TABLE 5. Effects of Democratic Transition on Immunization Rates of Children between Ages 1 & 2…………………………………….................................... 31 TABLE 6.1 Descriptive Statistics of the Entire Population .…...................................... 36 TABLE 6.2 Descriptive Statistics of Countries that Experienced Democratization…. 36
TABLE 6.3 Descriptive Statistics of Countries that are Permanent Democracies…… 37
TABLE 6.4 Descriptive Statistics of Countries that are Permanent Autocracies…….. 37
TABLE 7. Political Regime Table…………………………………………………….………….…….. 38
FIGURE 1. GDP per Capita Growth Annual………………………………………………………... 40
FIGURE 2. Safe Drinking Water Improvements……………………………………………….... 40
FIGURE 3. Improved Sanitation Provision……………………………………………………….... 41 FIGURE 4. Telephone Lines per 100 People……………………………………………………….. 41
FIGURE 5. Immunization Rates………………………………………………………………………. 42 FIGURE 6. Net Development Assistance Received……………………………………………… 42
1
I. INTRODUCTION
Does democratization actually hold benefits for the masses caught up in the process?
Even as I examine this question, Egypt’s hope of a peaceful transition to democracy is on
the brink of collapse as violent protests erupt across the country, and Libya’s fledgling
government is poised to disintegrate into a struggle over the nation’s resources. For the
past year, the Arab world has witnessed a wave of revolutions that have toppled long
established dictators in Tunisia, Egypt, Libya and Yemen, while Syria is on the verge of
joining the ever-growing list. As the citizens of these countries, and the few remnants of
the autocratic world, move towards the establishment of democratic governments, they
do so with the hope of better futures. Whether these democratic transitions can succeed
and endure though, hinges mainly on the present. While much of the literature focuses
on the causes and long-run economic outcomes of democratic transitions, they have
tended to overlook the immediate effects during the process (see for instance,
Papaioannou and Siourounis, 2007). It is important to examine this immediate
relationship, because the stability and endurance of democracy depends on the new
government’s ability to capture and address the most pressing needs of the population;
therefore, establishing credibility in the process.
The growing consensus among researchers in development and political
economics is that democratic transitions lead to better outcomes of economic growth in
the long run, as put forth by Persson and Tabellini (2006), and Papaioannou and
Siourounis (2007). Meanwhile, Rodrik and Wacziarg (2005) look at growth in the short
run, i.e. in the transition years, and conclude that the process does not have negative
outcomes. Interestingly, few previous papers have studied whether a democratic
2
transition is associated with better development outcomes, measured in the form of the
provision and distribution of important public services (see for instance, Lake and
Baum, 2001). Far more striking is the fact that, to the best of my knowledge no one has
attempted to examine development outcomes during the actual process of
democratization. This paper aims to fill this intellectual gap in the literature by posing
the question: ‘Do democratic transitions produce better human development outcomes
during and in the immediate aftermath of the change?’
Given the policy question, I want to explore whether public service provision,
especially with respect to health and education, accelerates, declines, or remains
constant in the years immediately following a regime change. To address this question I
use panel data from a sample of 161 countries, over the period 1960–2009. The
variables I look at for this paper are based on data from Polity IV (2010) to measure
democratic transitions, and The World Bank’s World Development Indicators and
Global Development Finance (2011) to measure human development outcomes, public
service inputs, and economic growth. In line with prior research, I estimate the effect of
democratic transitions using a difference-in-difference technique to study the before-
after variation, controlling for time-invariant country-specific effects and general time
trends.
The rest of the paper proceeds in the following fashion: The next section outlines
political and economic theories on regime change, also reviewing the existing literature
on the effects of transitions. Section 2 concentrates on the conceptual model and
assumptions on which the hypothesis of this paper rests. Having laid out the concept,
Section 3 delves deeper into the features of the data and methodology used, first to
identify democratic transitions and then to measure their impact on human
3
development. In Section 4, I present the main empirical results and explain how these
results support my hypothesis. Finally, I summarize my findings, draw policy
implications, and discuss future research in Section 5 and section 6 respectively.
II. LITERATURE REVIEW AND BACKGROUND
Do democratic transitions always benefit people over autocratic regimes? In the field of
political theory and political economy there is an ongoing debate around regime changes
and their effectiveness (for a review, see among others Rao, 1984; Linz, 1996; Blasi and
Kroumova, 1996; Sen1999; Roderick 2004). Are democracies more proficient at
providing services to their constituents, or are autocratic regimes better positioned to
resolve collective action problems associated with the provision of public goods?
Conventional wisdom holds that democratic forms of governance will bring prosperity
and development to economically backward countries (Sen, 1999; Bourguignon and
Verdier, 2000; Lake & Baum, 2001), and hence it is important for western democracies
to foster democratic movements on autocratic nations. The other side argues that a
democratic polity can yield inefficient outcomes by enabling various groups to compete
for political influence (Besley and Coate, 1998; Tavares and Wacziarg, 2001), whereas ‘a
strong state with an iron hand neglects populist demands and enforces developmental
policies with its insulation from particularistic pressures’ (Rao, 1984, pp. 69-70).
The collapse of the Soviet bloc in 1989 was considered by many as the
culmination of the fight between liberal and illiberal ideologies. Francis Fukuyama
famously described it as the end of history – ‘What we may be witnessing is not just the
end of the Cold War, or the passing of a particular period of post-war history, but the
end of history as such: that is, the end point of mankind's ideological evolution and the
4
universalization of Western liberal democracy as the final form of human government’
(Fukuyama, 1992, pp. 18). His interpretation has been shown to be premature, and since
the collapse of the Soviet Union, the failure of many of these new democracies and the
further deterioration in Sub-Saharan Africa has reopened the debate. As it became
clearer that democratic transitions themselves do not guarantee successful outcomes,
numerous papers have examined the nature of transitions and their immediate
outcomes (for example, Blasi and Kroumova, 1996; Roberts, 1999; Roland, 2001).
Before analyzing the effects of democratic transitions it is important to examine
the political economy of transitions, and the factors that influence the dissolution of
authoritarian regimes. Acemoglu and Robinson state that within democratic societies
the poor impose higher taxes on the rich than in non-democratic societies (Acemoglu
and Robinson, 2001). Furthermore, when a regime possesses discretionary powers it
ends up with exploitative institutions, which then tends to create distortionary policies
benefitting a small inner group at the expense of the population at large(Tavares and
Wacziarg, 2001). Invariably, and as supported by substantial evidence, this mostly
culminates in the formation of extremely unequal societies with a wealthy elite
dominating the majority. This makes the citizenry pro-democratic and correspondingly
gives the ruling elite an incentive to oppose democracy. The poor pose a threat through
revolution, especially during hard times. The rich will try to prevent a revolution by
offering concessions to the poor. ‘If the redistribution is insufficient the elite might be
forced to make a more credible commitment. This is what extending voting rights
achieves’ (Acemoglu and Robinson, 2001, pp. 939).
The last two decades have witnessed democratization processes in some form or
the other in a majority of nations. This can be described by a change from less
5
democratic to a more democratic political regime, or a movement from semi
authoritarian political system to a democratic political system like Nepal in 1991 or
Comoros in 1990. In some cases the shift has been from absolute dictatorships to fully
liberal democracies, as in the case of Gambia in 1994 and Zimbabwe in 1987. In the
analysis of underlying domestic dynamics that cause transitions, the questions asked
are, why do countries that have practiced dictatorships for decades head down the path
of democracy? Why do democracies find it hard to consolidate in economically
backward societies? In answer to these questions, Kugler proposes that it is a
combination of two processes; the modernization thesis which postulates that
development and modernization will lead to democratization, and the political agent
thesis which postulates that albeit within constraints, democratization was an outcome
of actions, not just of conditions (Przeworski and Limongi, 1997). Casper and Taylor
(1996), treat democratic transitions as a multistage process characterized by the erosion
and collapse of authoritarian rule, followed by democratic transition and consolidation.
Other studies emphasize the strategic relationship between the dictatorship and
its opposition, the population, and view the transition process as one of negotiation.
There are two different reasons for the discontent among general population which
endangers regime stability. Depending on the level of economic development, the
population is either discontent because of a ‘too low’ level of economic welfare or
because of a misaligned ‘welfare-repression balance’. When the source of discontent is
economic conditions, ‘then providing higher welfare in terms of public good provisions,
subsidizing taxes, increasing employment etc are perceived as a signal of the authority’s
capability to ease hardship; regime stability increases’ (Salhi, 2011). The corollary is that
if the authoritarian regime does not possess the resources to ease the population’s
6
hardship, it must increase repression, therein disturbing the ‘welfare-repression
balance’ and hence regime stability.
The notion that transitions occur during times of economic hardship is also
implied in the theory of political transitions (Acemoglu and Robinson, 2001) where the
authors show that regime changes are more likely during periods of recession because
costs of political turmoil are smaller to both rich and poor. Thus once nations head out
on the path to democracy their transitions face an uphill battle. Given the high
uncertainty about the outcome of reforms and the only recent exposure of the public to
democratic processes and institutions, political constraints are likely to play a
particularly important role in policy-making in transition countries (Pirttila and Kim,
2005). Furthermore, as already noted, if transitions are generally related to economic
downturns, then the expectations of the people will be hard to meet by any new regime
due to financial constraints. ‘It is the economic legacy of the authoritarian rule that
determines the policy agenda of its democratic successors’ (Haggard and Kaufman,
1997). When a new democratic government gains power after a crises it faces a difficult
and politically unpopular set of policy choices, which are centered on macroeconomic
stabilization and wider structural adjustment measures.
Another factor that has a crucial influence during the transition is the creation or
reorganization of state capacity. State building is the process by which state capacity is
created, enhanced, or restored, while capacity refers to the ability of the state to govern
effectively. While the authority of the old state is being eroded, that of the new
democratic state needs to be strengthened. The government will be required to take on
new functions, such as the provision of laws, building of administrative organizations,
and implementing regulations that support a market economy (Djankov and Shleifer,
7
2003). Empirical studies confirm the close relationship between good institutions and
development (De Long and Shleifer, 1993; Besley, 1995; Easterly and Levine, 1997;
Acemoglu, 2001), but the initial impact of the fall in authoritative regime is institutional
disorganization. I hypothesize that this institutional vacuum leads to the breakdown or
capture of public services.
While most existing literature examines the factors leading up to regime changes
and the political economy that dictates them, it is only more recently that the focus has
shifted towards studying growth and development during the process. Examining these
effects of transitions, especially in the immediate aftermath, should better reveal the
factors discerning the establishment of successful democracies.
Under the circumstances set forth in the above section it is hard to guarantee
better outcomes, and so far, the evidence that democratizations yield subsequent
economic growth is quite weak. Political regimes still influence economic development,
but the effects appear difficult to identify from the within-country variation (Persson
and Tabellini, 2006). It is noticed that countries liberalizing their economy before
extending political rights do better. ‘A plausible interpretation is that young democracies
in closed economic environments are more likely bogged down in redistribution conflict
and populist policies, whereas young democracies in open economies are forced to pay
more attention to economic efficiency’ (Persson and Tabellini, 2006). It is also seen that
democratic reforms fail to boost economic performance in some autocracies, and this
might be due to economic collapse in the lead-up to democratization or alternatively,
political uncertainty exerting a negative influence on investments and savings. This
implies that stable and persistent democracy has a stronger effect on development than
democracy per-se. Papaioannou and Siourounis, on the other hand, challenge cross-
8
sectional findings that democratic institutions have a negligible direct effect on
economic growth, showing that on average democratizations are associated with a one
half to one percent increase in annual per capita growth. Similarly, Rodrick argues that
major democratic transitions have, if anything, a positive effect on economic growth in
the short run. Democratizations tend to follow periods of low growth rather than
precede them, and moreover, democratic transitions are associated with a decline in
growth volatility (Rodrick and Wacziarg, 2004). Both these papers look at purely
macroeconomic outcomes in the form of GDP growth, which do not necessarily explain
redistribution or public service provision.
While there has been controversy over the question of whether democracy
enhances economic development, the consensus has been that democracy enhances
human development (Boix, 2001; Lake and Baum, 2001; Brown and Mobarak, 2009). It
is only recently that research has challenged this belief, arguing that there is no
correlation between regime type and various measures of human development or these
relationships are not significant (McGuire, 2004; Ross, 2006).
Regardless of whether a politician is democratically elected or an authoritarian
figure, the aim is to maximize on the rents earned from the power of the state. It follows
that states that earn more rents produce less of any public service than those that do
not. Therefore, ‘democracies, in which the political market is more contestable, should
produce larger quantities of public services’ (Lake and Baum, 2001). Lake and Baum
test their hypothesis, and find democracies producing large quantities of public services
both cross-sectionally and over time for a variety of public health and education
indicators. On the other hand, Gerring and Thacker find that ‘a country’s contemporary
level of democracy has only a weak association with improved human development
9
while a country’s historical experience with democracy has a strong and robust influence
on human development’ (Gerring and Thacker, 2012; pg2). This would imply that
positive human development is not necessarily an immediate outcome of democratic
transitions.
III. CONCEPTUAL FRAMEWORK
Unfortunately, there is little academic literature on the subject of human development
during transitions, or in the immediate years after democratization, and this paper aims
to fill that gap. The premise on which the rest of the paper is developed is that while
democratization may or may not be beneficial to nations in the long run, the actual
process of transition and the immediate aftermath leaves the population worse off in
terms of human development. A vast majority of transitions occur suddenly and at very
fast pace, and the underpinning of this argument is that this sudden change in regime
tends to leave both political and institutional vacuums within the state (Djankov,
Glaeser, Porta, Silanes, and Shleifer, 2003). Under most circumstances a state in
transition has neither, the capacity, the resources, nor the political incentive to reduce
rent seeking, all of which are prerequisites for successful public service delivery. Since it
is only over time that these factors come together, it can be expected that the years of
transition are some of the hardest years for populations.
A much studied example is the Soviet transition, where the fall of the communist
regime triggered extreme economic disorganization (Shleifer and Vishny, 1993). ‘Even
as the markets began to work disorder manifest itself everywhere, with the unofficial
economy reaching perhaps 40% of the nation’s total economy’ (Johnson, Kaufmann,
and Shleifer, 1997). The experience of transition shows that policies of liberalization,
10
stabilization, and privatization that are not grounded in adequate institutions may not
deliver successful outcomes (Roland, 2000). ‘First and most immediately, the economic
crisis and breakdown of state institutions attending the collapse of the Soviet Union
forced the reformers to launch economic reform without adequate political, economic,
and administrative supports’ (Robert and Sherlock, 1999). Short on time to build basic
institutions and market infrastructure to support comprehensive economic
restructuring, they lost control of much of the processes. Simultaneously, weak
governments in combination with nascent institutions not only allow the emergence of
organized crime, but they may also divert the efforts of economic agents from
productive activity to rent-seeking activities, especially under initial conditions where
markets are repressed. ‘New democratic leaders can easily exploit and trade political
gains for short-run economic losses’ (Haggard and Kaufman, 1997).
A source of concern is how well the various political systems are at getting
efficiency-enhancing reforms adopted, and at overcoming the resistance of interest
groups who have an interest in preserving the status quo. Blasi and Kroumova argue
that ‘in the absence of institutionalized consultation with legislators and interest
groups, decision makers are deprived of feedback that may be essential in correcting
mistakes’ (Blasi, Kruse and Kroumova, 1996). This implies that the reforms are more
exposed to popular backlash and rapid reversal. Thus democratic institutions may well
be undermined by the failure to take swift action. Unfortunately, this is exactly the time
when the new regime also needs to build trust amongst the people, because depending
on the manner of its accession to power the government might face a lack of credibility.
‘However, the transition itself raises expectations that government will respond to new
political constituencies. Moreover, policy reform is difficult precisely because economic
11
problems are more acute, and the demands for short-term economic relief more
widespread’ (Haggard and Kaufman, 1997).
For the incumbent, political survival is the predominant concern. Given the goal
of staying in power, a trade-off exists between implementing growth-enhancing policies
and the demand of citizens for enhanced welfare in the short run. The incumbents are
assessed to some extent by the economic welfare they generate for their citizens, in the
form of monetary transfers or the provision of public goods (Salhi, 2011). What path the
government takes depends on circumstances. When faced with strong elite conflict and
weak links between state and society there is a substantial reduction in the incentives of
incumbents to devote either the resources or the political capital which are required to
build state capacity. On the one hand the costs of creating state capacity and
implementing sound reforms will be perceived as acceptable if the incumbent has the
support of the elite and a popular base with the public. On the other hand, ‘when
political competition is weakly institutionalized and social bases of support are fragile,
politicians who face significant opposition are likely to view state resources as assets to
attract and cement political allies rather than build state capacity’ (Linz and Stepan,
1996).
When the incumbents are in possession of the financial/natural resources they
can provide the desired public services to appease their constituency. If the incumbents
are dependent on external help, there exists pressure to implement growth enhancing
strategies over public spending. Analytical models of transition (Chadha and Coricelli
(1997), and Roland (1999)) have stressed the importance of government expenditure to
support an efficient restructuring of the economy. Restructuring of the economy and
reallocation of resources implies transitory losses in the form of unemployment or
12
disruption of public services. Most developing countries do not have the social safety
nets to protect against such losses, and unless the government takes certain steps to ease
the ensuing hardship, not only will there be resistance to the restructuring but also
resentment towards the new regime. To protect against all this the government must
possess the necessary funds.
Finally, it should also be taken into account that while the new government might
be willing to spend on public goods, the success of the task of providing public services,
including law and order, education and basic infrastructure depends not only on the
fiscal resources and extractive capabilities of the state, but also the professional
competencies of the state's administrative capacity. As mentioned earlier, in a majority
of cases transitions lead to a disruption or breakdown in state capacity. The outcome
from these situations could be an infusion of spending on public services purely as a
signaling effect, with little change in provision quality or outcome. All these issues lead
to the implication that human development is very likely to suffer a setback during
transitions, depending to some extent on prevailing conditions, and the level of external
help received by the new government.
CONCEPTUAL MODEL
Based on the framework set forth above it is possible to trace the paths available to any
new regime, and consequently examine the outcomes of each of these paths. Faced with
some or all of the hurdles outlined, i.e. economic difficulties, institutional vacuums, and
lack of democratic tradition/credibility the new regime might do one of the following.
(a) One option available to the new regime is to enrich itself through a process
of rent seeking. This includes a fire-sale of all public wealth to crony capitalists,
13
establishing organized crime, and creating kleptocratic elite. The best example of this
process is Russia. During the mass privatization of state owned enterprises the
government permitted insider dealing, and indulged in massive giveaway of the
enterprises to well connected insiders. The reason this could happen was the lack of
established institutions (decent legal and enforcement infrastructure capacity) to
control the process, and the lack of transparency demanded by a population that is used
to democratic processes. Furthermore, ‘in a vicious circle, dirty privatization also
reinforces corruption and organized crime through bribery’ (Black and Kraakman,
1999). As we now know, around $5 billion of the international loans provided by the
World Bank and International Monetary Fund were stolen upon arrival in Russia. This
led to a complete collapse of the economy and the administration. Russia’s health care
collapsed, with a shortage of medicines and nutrition. There was skyrocketing growth in
drug addiction, alcoholism, crime, poverty and unemployment. In the final analysis, this
outcome has left the Russian public with an immense skepticism of the reform process
and of democratization. The result is a derailing of the democratic transition and the
installation of an illiberal and undemocratic regime such as the current one under Putin.
(b) A second route available to a new regime, especially if faced by economic
crisis, is to look towards the developed world for assistance and follow the ‘structural
readjustment policies’ prescribed by the IMF and World Bank. A common starting point
of these policies is the introduction of severe austerity programs, and a reduction in the
size of the government. The drastic cuts in ‘government services and subsides also target
education, health and other sectors that contribute to the social wage, especially of the
low income groups’ (Beneria, 1999). The readjustment also leads to temporary
unemployment and the process places more value in the market outcomes than in
14
human development. In the short run these policies invariably have a negative impact,
with shrinking of household budgets for a substantial proportion of the population,
increasing poverty and loss of social safety nets. In the long term, it is expected that the
reforms will reverse the initial problems and result in overall growth. This outcome to a
large extent will depend on the continued assistance of the developed world, and the
ability of the new regime to maintain credibility with the population through these
hardships.
(c) A third path open to any new regime is to appease the population by
implementing populist policies through subsidies and increased spending on public
services. As the new regime attempts to establish itself it can build credibility within the
population by improving the public provisions that lead to human development like
education, health and basic utilities. But this would imply the access to large amounts of
capital and the prompt rebuilding of administrative capacity. At this point, the outcome
is dictated by whether the new regime has either the natural resource wealth or the
foreign aid to support its populist policies, and equally important whether it has the
capacity and the assistance to develop its state facilities. If the government does possess
these factors, then the result could be a positive effect on human development, which in
turn will lead to the government gaining credibility. On the other hand, if the state does
not possess either the finances or the capacity, what will be witnessed is an initial burst
of spending as a ‘signaling effect’, followed by a swift collapse as the new regime runs
bankrupt. This once again leads not only to the deterioration of human development but
also a loss in credibility of the democratic transition.
Two of the three scenarios presented above lead to the deterioration of public
services in the short run. Even in the third scenario, positive human development is
15
dependent on multiple factors. What this implies is that under most situations, during
the process of regime transition the human development outcomes of the population
take a negative turn. This is why the world over it has been so difficult for new
democracies to consolidate themselves. The results in the following section support this
conceptual framework through empirical analysis.
IV. DATA AND METHODOLOGY
Democratization Data: This paper utilizes two sources to identify and assess
democratic transition over the last 50 years. (a) the most popular method that regime
change can be identified is by using the Polity IV codes, which capture regime changes
that shift from autocracies to democracies and vice-versa. The dataset is available to the
public from the Integrated Network for Societal Conflict Research data page, under the
Polity IV Project: Political Regime Characteristics and Transitions, 1800-2010,
produced by the Center for Systemic Peace, April 30th 2010. The dataset codes
“patterns of authority” and regime changes for all independent countries with a
population greater than 500,000 thousand, which stands at 164 countries as of 2010.
For the purpose of this paper the subpopulation of interest are those countries, which
have undergone regime changes between the years 1960 and 2005. I will use autocratic
countries, and other nations that had no-regime change to act as a counterfactual.
Polity IV adopts as its basic threshold value a 3-point change in the POLITY variable,
with each continuous, sequential change (in the same general direction) in a complex
transition occurring within three years or less of the previous change; this criteria
defines a “regime transition” (denoted with a non-zero value on the REGTRANS
variable and a flag value “1" on the D4 variable). This standard signifies a substantive,
16
normative change in political authority considered sufficient to present real
opportunities for regime opponents to challenge the, as yet, non-institutionalized
authority of the polity. As such, the “regime transition” standard is used to define the
ending of an established polity and the beginning of a new polity.
(b) A second method of identifying democratic transitions is the dataset
constructed by Elias Papaioannou and Gregorios Siourounis. Using subjective political
freedom indicators, electoral archives, and historical resources in 174 countries in the
period 1960-2005, the authors identify 63 incidents of permanent democratic
transitions, 3 reverse transitions from relatively stable democracy to autocracy and 6
episodes of small improvements in representative norms (borderline democratizations).
The main reason for looking at this alternate dataset is that this Polity Project’s "polity
change" variable by construction does not capture a complete democratic (or autocratic)
transition, rather identifying a move towards change. For example, according to Polity
IV criterion Cambodia experienced a democratic transition in 1972 (when the Polity
index jumped from −9 to −5), and Chad democratized in 1994 (when the index jumped
from −7 to −3), but it is hard to call either of these real democracies. Another key
advantages of this dataset is that they also classify non-reforming countries to stable
autocracies and always democratic.
I group the countries into five categories based on the political regimes and
transitions from the period 1960-2005. (1) ‘always authoritarian’ are those countries
that are throughout the sample period autocratic. (2) ‘always democratic’ are those
countries which throughout the sample period remain democracies. (3) ‘permanent
democratization’ is the group of interest in this paper and includes all the countries that
abandoned autocratic ruling in the period 1960-2005 and have remained democratic
17
therein without any reversals. (4) ‘borderline democratization’ includes countries that
have taken some steps towards democratic rule, but are still far from establishing
credible democracy. (5) ‘reversals’ indicate countries that experienced a turn-around
from democratic governments into authoritarian regimes.
Data on Human Dvelopment:
As my dependent variables, I investigate numerous indicators of the level of education,
public health, and utilities provided by the state. Although the form of state involvement
differs from direct production in some countries to regulation of private service
providers in others, both are core areas of state responsibility in nearly every country. I
use multiple indicators of both physical input and output for each area to account for
two factors. For one, measuring purely outcome indicators does not take into
consideration that indicators like life expectancy and literacy are persistent, i.e. they are
not truly sensitive to short term impacts. On the other hand, measuring only input
indicators could lead to a biased result as it is hard to parse out the quality of these
inputs, for example the outcome of a public expense that is purely used as a signal
mechanism to gain popular support might not be as effective as the input indicates.
The World Development Indicators (2011) is the source of all numerous
indicators of the human development outcomes and public service inputs. The data is
obtained from the World Bank, which is available for public access in Excel format,
downloadable from the organization’s web page. The WDI includes data from 209
countries spanning from 1960 to 201o. In addition, to check for robustness the paper
will use some other indicators that measure public service inputs like telephone
connectivity, and electricity penetration. The model also uses controls to account for
18
natural resources and foreign aid. By controlling for foreign aid, natural resources, and
debt ratios, we can isolate the effects of transitions from external influence.
Empirical Model:
To analyze the relationship between democratic transitions and human development
outcomes I use annual frequency data (panel data) and examine the within-country
effects of transitions. I employ the following regression equation to make the analysis:
xi,t = αi + ηt + δdemoci,t + controli,t + vi,t
The dependent variable xi,t is the development indicator of interest in country i in year
t. Country fixed-effects (αi) and year fixed-effects (ηt) control for country characteristics
that are time invariant, and global trends that vary across time but not between
countries, respectively. The controli,t includes natural resources and foreign aid for a
country i at time t. The main variable of interest, democi,t is an indicator (dummy)
variable that takes the value one in the year a permanent democratization episode
occurs and in all years following. Countries that do not undergo permanent
democratizations take on the value 0 for democi,t through all years. The regression
constitutes a difference-in-difference model, where democratization countries are the
‘treated’ group, while non-reforming countries (always democratic, always autocratic
and always in intermediate status) serve as the ‘control’ group. Due to the inclusion of
country and year fixed-effects the coefficient δ measures the annual growth effect of
democratization in reforming countries compared to the general evolution of growth in
non-reforming countries. Most importantly, the specification accounts for time-
invariant country characteristics, such as geography, social norms and colonization that
may influence both economic and political development.
19
The model involves multiple time periods to measure the change in human
development at different stages of a democracy; at time ‘t+3’ for the period immediately
after transition, at ‘t+5’ for the period 5 years after the transition, a period ‘t+10’ for ten
years after democratization, and finally ‘t+all’ which covers all subsequent years after a
democratization episode. By looking at these time periods we can analyze the trend in
the impact of democratization.
V. EMPIRICAL RESULTS AND ANALYSIS
As a first step, I evaluate the effects of democratic transitions on the annual log
difference in real GDP per capita using a time and country fixed effects regression.
While this paper’s variables of interest are human development, there are two reasons to
study the effects on GDP (a) to test the model by comparing to previous results by other
authors (b) compare the effects on economic development with that of human
development to see if they follow a similar trend. Table1 presents the results for the
regression. The country fixed effects only isolates the within effect of democratization by
adding a vector of country dummies (αi). Looking at column (I) of the country fixed
effects the coefficient on democratization is seen to be 1.106 and statistically significant
at the 1% level. The difference-in-difference coefficient where I control for both country
and year fixed-effects implies an even larger average growth effect of democratization of
TABLE 1: EFFECTS OF DEMOCRATIC TRANSITION ON LOG ANNUAL DIFFERENCE REAL GDP PER CAPITA
Model1: Country Fixed Effects Model2: Country & Time Fixed Effects
1 2 3 4 1 2 3 4
All Years After Transition 1.106** 1.360**
(0.401) (0.441)
10 Years After Transition 0.224 0.831*
(0.366) (0.373)
5 Years After Transition -0.572 0.510
(0.458) (0.465)
3 Years After Transition -1.215* 0.169
(0.615) (0.615)
Constant 1.498** 1.712** 1.770** 1.778** 1.809* 1.745* 1.735* 1.732*
(0.087) (0.041) (0.026) (0.021) (0.869) (0.862) (0.861) (0.861)
Observations 5,699 5,699 5,699 5,699 5,699 5,699 5,699 5,699
R-squared 0.003 0.000 0.000 0.001 0.083 0.081 0.080 0.080
Number of ccode 157 157 157 157 157 157 157 157
Robust standard errors in parentheses
** p<0.01, * p<0.05, + p<0.1
Source: own calculations based on OLS model with country and time fixed effects.
20
21
approximately 1.36%, and is statistically different from zero at the 1% significance level.
What this implies is that in the long run democratization has a significantly positive
effect on log GDP growth of greater than 1%. These results are extremely similar to those
found by Elias Papaioannou and Gregorios Siourounis, who in their paper
‘Democratization and Growth’, show results of 1.44%.
While that is the long run growth result, what are the results in the short run.
Looking at the results across shortening time periods of ten years, five years and three
years after the democratization process, both the models show a similar trend of
decreasing effects of the democratization process. Column (4) of the country fixed
effects model shows that the effect of democratization on log GDP growth is negative in
the first three years subsequent to the democratization episode, with a coefficient of -
1.25%, and significant at the 5% level. While column (4) of both country and fixed effect
model still maintains a positive sign for three years after democratization, the
magnitude has become really small, and the relation is no longer statistically significant.
Similarly, Table 2 shows the effects of democratization on the improvement in safe
drinking water provision. As we’ve seen in the case of GDP, the country fixed effects
model shows that in the long run, measured by all years after transition, the coefficient
is positive and statistically significant at the 1% level. The coefficient is also significantly
large and reveals an 8.5 percentage points increase in the size of population that has
access to safe water. But looking towards column (2), column (3) and column (4) a
decrease in the levels of provision of safe water is observed, especially in column (4)
which is in the three years immediately after transition, where there is a decrease of 3.5
percentage points in the population access to drinking water and this is statistically
significant at the 1%level.
TABLE2: EFFECTS OF DEMOCRATIC TRANSITION ON IMPROVEMENT IN SAFE DRINKING WATER PROVISION
Model 1: Country Fixed Effects Model 2: Country & Time Fixed Effects
1 2 3 4 1 2 3 4
All Years After Transition 8.655** 3.846**
(1.139) (1.206)
Ten Years After Transition -1.479* 0.443
(0.620) (0.455)
Five Years After Transition -2.968** -0.153
(0.551) (0.539)
Three Years After Transition -3.590** -0.566
(0.741) (0.719)
Constant 77.893** 81.202** 81.174** 81.131** 75.618** 76.235** 76.301** 76.322**
(0.406) (0.094) (0.037) (0.032) (0.532) (0.517) (0.514) (0.513)
Observations 724 724 724 724 724 724 724 724
R-squared 0.129 0.009 0.021 0.020 0.420 0.400 0.399 0.400
Number of ccode 156 156 156 156 156 156 156 156
Robust standard errors in parentheses
** p<0.01, * p<0.05, + p<0.1 Source: own calculations based on OLS model with country and time fixed effects
22
23
Once I run the regression controlling for both, time and country effects as done in
model 2, the magnitude on the coefficients reduces and they are no longer statistically
significant except for in column 1 (the long run effects). This difference in model 1 and
model 2 is probably a result of the fact that the indicator is influenced by a time trend,
which is not accounted for in model 1. Nonetheless, when compared, the columns show
the same trend as observed in the model 1, that is, the coefficients are decreasing as the
number of years post transition decrease. When looking at the coefficient for three years
after transition it is seen that there is nearly a 0.5 percentage point reduction in the
access to safe drinking water.
Table 3, Table 4 and Table 5 (refer Appendix-A) also look at development
indicators and the results are similar, all of them pointing in the same direction of
decreasing human development inputs in the years immediately after democratization,
with significant improvements in the long run. Table 3 examines the effect of
democratization on the improvement in sanitation provision and there is a marked drop
in the provision of services in the three years immediately after transition, which is
statistically significant in the country fixed effects model and has a magnitude of -2.4
percentage points, that is a decrease of 2.4% of the population’s access to good
sanitation. While it is not statistically significant in model 2, it must be noted that the
coefficient is positive immediately after transitions but then turns negative in the five
and ten year windows, before improving in the long run. Table 4 and Table 5, which
measure the effects on number of telephones per 100 people and the immunization rates
of children, also follow as similar negative trend as we approach the years immediately
24
following democratization. The coefficient on telephones during the three year window
is -2.7 in model 1 and -2.8 in model 2, and both are statistically significant at the 1%
level. Similarly the coefficients for the three year period on immunization are -2.6
percentage points and nearly -1 percentage points, though neither of these values is
statistically significant.
These results indicate that while democratization is good for long term growth
there is little evidence to say that this holds in the short term, in fact all the evidence
supports my argument that the immediate after effects of a democratization process is
the worsening of conditions for the population at large. While the conceptual framework
of this paper outlines the key forces that might be at work here, i.e. the lack of state
capacity, economic weakness, and political rent seeking, there are numerous other
factors that are also influencing these outcomes, which are unique to each country. To
the greatest extent, all new regimes are faced with an uphill struggle, and what the
empirical results in this paper indicate is that regardless of the options available during
the process of transition, in the short run the populations are faced with deteriorating
human development.
VI. POLICY IMPLICATIONS
The theory outlined in this paper, and the accompanying empirical results, indicate that
overthrowing an authoritarian regime in itself does not solve the human development
issues facing much of the developing world. The years immediately following the
transition show the greatest decline in the state’s provision of public services. These are
25
not only the hardest years on the population, but also when the nascent democracy is
most vulnerable in its attempt to establish itself. This has significant bearing on how
both international and domestic policy makers approach the process of democratization.
Of the 165 democratization episodes in the last 50 years, 84 of them have been
derailed within the five year window of the transition. Western democracies that want to
bring about democratic transitions in the developing world must recognize that
replacing the authoritarian regime is only the first step in the process of establishing
democracy within a country. In fact, looking at the data (refer to appendix-C.3, Figure
6), it is seen that on average countries receive less foreign aid in the three years
following the transition than in the years preceding them, which implies a loss of
financial resources for the new regime when they need it the most. Developed nations
need to embrace a more long term strategy that involves supporting the nascent
government with both financial assistance and capacity building assistance.
Furthermore, the western world should recognize the constraints faced by both the
fledgling government and the population when pushing for structural reforms and
austerity measures. If no consideration is given to the hardships faced by the citizen, not
only will there be resistance to the reform, but also a negative backlash against the
western world.
For the nascent government, these findings imply that for the transition to lead to
the successful establishment of a democratic regime the government’s policies must
safeguard the population from the negative effects of the reformation period. These
early years are the key to democratization, especially if the government wants to build
26
credibility for itself and for the democratic process. When democracy is sold to the
population as the solution to that ails the country, the transition brings with it huge
expectations from the people. Policy makers while introducing reforms must also take
steps towards addressing these expectations, otherwise the population will either
become disenchanted with the democratic process or actively turn against it. Human
development leads to human capital, and the new government in recognition of the fact
that this human capital is the source of future growth must not neglect the basic
provision of health and education in the early stages. Though it is important to
implement macroeconomic reforms, the new government must be prepared, and make
it a priority, to provide the social safety nets to mitigate some of the losses faced by the
population.
VII. CONCLUSION The relationship between democracy and human development has been the topic of
much debate and there are numerous studies that argue both sides. Despite this
immense literature, both theoretic and empirical, on the effects of democratization on
development, the political science literature lacks a comprehensive analysis of the short
term effects of the process of transition, i.e. the outcomes in the years immediately
following a democratic transition episode. In this paper I analyze the impacts on human
development after incidents of permanent democratic transitions.
The political theory of transitions indicates that regime change is accompanied by
institutional vacuums, economic difficulties and the lack of democratic traditions. I
27
develop on this theory to empirically show that under most circumstances over the first
few years the new regime will be faced with deteriorating human development. In
contrast to the previous literature that examines the relationship using cross-sectional
approach, I look at within-country effects to test my hypothesis. Having identified 63
incidents of permanent democratization episodes, using panel econometrics that control
for country-specific characteristics and general time trends, I show that in the three
years following a democratization episode GDP growth, access to safe drinking water,
access to clean sanitation, the rates of immunization, and the availability of telephone
lines all show negative outcomes. These results support my hypothesis. The results also
show all these indicators recording a positive growth in the long run, indicating that the
long term outcomes of democratization are good for the population.
From a policy perspective, the results suggest that when implementing
democratic regime changes it is important to recognize that the process of transition has
deleterious effects on the provision of basic public services, and a substantial effort must
be made to mitigate these negative effects. If these basic needs of the population are not
met, there are reasonable expectations that the democratic transition will not succeed,
as is borne out by the fact that a majority of transitions that fail do so within the first
three years. But this outlook does not necessarily have to hold true for all scenarios and
countries. It is important to recognize the shortcomings of the paper, most importantly
the inability to empirically parse out the effects of foreign aid and natural resource rents.
Furthermore, the theory indicates that many democratic transitions took place amidst
recessions and collapse of state capacity. Therefore the deterioration of services
28
observed in the years immediately following transitions might well be driven by the
years leading to the transition rather than the process of transition. Thus, the key issue
of causality remains unclear.
Taking into consideration the political turmoil in the Middle East, and the
questions faced by the developed world with respect to supporting the democratization
of this region, this paper lays the foundation to understand the factors that might effect
the human development outcome of these populations, and therein the establishment of
democracy. Further theoretical and empirical work should model the effects of
democratic transitions, controlling for external aid, thus generating more insight into
the interplay between democratization and the geo-political importance of the country.
Another key avenue for further research is in determining the J-curve result to explore
the point in time, where after the initial negative trend, human development starts
improving, just as reforms are expected to make things worse before they get better,
(Hellman, 1998). This knowledge will help us better understand the time and resources
required to implement a successful transition to democracy. My overall findings do
support the theory that democratization does hold benefits for the population in the
long run, and external support might play an important, welfare enhancing role in the
transition processes.
Appendix – A
Regression Tables
Source: own calculations based on OLS model with country and time fixed effects
TABLE3: EFFECT OF DEMOCRATIC TRANSITION ON IMPROVED SANITATION FACILITY
Model 1: Country Fixed Effects Model 2: Country & Time Fixed Effects
1 2 3 4 1 2 3 4
All Years After Transition 5.755** 1.073
(1.250) (1.335)
Ten Years After Transition -1.880** -0.263
(0.679) (0.657)
Five Years After Transition -2.577** -0.114
(0.594) (0.543)
Three Years After Transition -2.400** 0.316
(0.727) (0.667)
Constant 63.427** 65.841** 65.724** 65.654** 61.078** 61.305** 61.278** 61.248**
(0.461) (0.106) (0.040) (0.032) (0.569) (0.527) (0.512) (0.511)
Observations 708 708 708 708 708 708 708 708
R-squared 0.069 0.017 0.020 0.011 0.357 0.356 0.356 0.356
Number of ccode 155 155 155 155 155 155 155 155
Robust standard errors in parentheses
** p<0.01, * p<0.05, + p<0.1
29
TABLE4: EFFECT OF DEMOCRATIC TRANSITION ON NUMBER OF TELEPHONE LINES PER 100 PEOPLE
Model 1: Country Fixed Effects Model 2: Time & Country Fixed Effects
1 2 3 4 1 2 3 4
All Years After Transition 6.764** -1.360
(1.068) (1.142)
Ten Years After Transition -0.381 -2.952**
(0.698) (0.629)
Five Years After Transition -2.224** -2.932**
(0.586) (0.501)
Three Years After Transition -2.749** -2.809**
(0.577) (0.466)
Constant 10.762** 12.412** 12.502** 12.466** -1.076 -1.056 -1.084 -1.097
(0.253) (0.087) (0.036) (0.021) (1.578) (1.573) (1.582) (1.586)
Observations 5,220 5,220 5,220 5,220 5,220 5,220 5,220 5,220
R-squared 0.083 0.000 0.006 0.006 0.440 0.452 0.447 0.443
Number of ccode 160 160 160 160 160 160 160 160
Robust standard errors in parentheses
** p<0.01, * p<0.05, + p<0.1 Source: own calculations based on OLS model with country and time fixed effects
30
TABLE5: EFFECT OF DEMOCRATIC TRANSITION ON IMMUNIZATION OF CHILDREN BETWEEN AGES 1 & 2
Model 1: Country Fixed Effects Model 2: Country & Time Fixed Effects
1 2 3 4 1 2 3 4
All Years After Transition 23.184** 4.159+
(2.286) (2.482)
Ten Years After Transition 2.890 1.131
(2.177) (1.380)
Five Years After Transition -1.128 -0.225
(2.064) (1.232)
Three Years After Transition -2.630 -0.995
(2.015) (1.215)
Constant 67.805** 73.983** 74.488** 74.518** 42.822** 42.912** 43.004** 43.032**
(0.651) (0.320) (0.147) (0.084) (2.291) (2.280) (2.285) (2.284)
Observations 4,273 4,273 4,273 4,273 4,273 4,273 4,273 4,273
R-squared 0.139 0.003 0.000 0.001 0.539 0.536 0.536 0.536
Number of ccode 160 160 160 160 160 160 160 160
Robust standard errors in parentheses
** p<0.01, * p<0.05, + p<0.1 Source: own calculations based on OLS model with country and time fixed effects
31
32
APPENDIX – B
DATA DEFINITION AND SOURCES
Polity IV Data: The independent variable that drives the question posed by this
paper is Regime Change, or alternately Democratic Transitions. To identify regime
change I will use the Polity IV (2010) codes, a dataset under the Polity IV Project:
Political Regime Characteristics and Transitions, 1800-2010, produced by the Center
for Systemic Peace, April 30th 2010. The dataset is available to the public, and can
be downloaded off the web in Excel format from the Integrated Network for Societal
Conflict Research data page. The dataset codes “patterns of authority” and regime
changes for all independent countries with a population greater than 500,000
thousand, which stands at 164 countries as of 2010. For the purpose of this paper
the subpopulation of interest are those countries, which have undergone regime
changes between the years 1970 and 2000. While the focus is on democratic
transitions, I will use autocratic countries that had no-regime change to act as a
counterfactual. Depending on the criteria my sample size could vary between 70
and 100 observations of regime changes.
CCODE (Numeric Country Code): Each country in the Polity IV dataset is defined
by a three-digit numeric code, derived from the Correlates of War's listing of members
of the interstate system.
33
SCODE (Alpha Country Code): Each country in the Polity IV dataset is defined by a
three-letter alpha code, derived from the Correlates of War's listing of members of the
interstate system.
YEAR (Year Coded): A four-digit code is used. Polity codes are assigned according
to the regime in place on December 31 of the year coded.
POLITY (Combined Polity Score): The POLITY score is computed by subtracting
the AUTOC score from the DEMOC score; the resulting unified polity scale ranges from
+10 (strongly democratic) to -10 (strongly autocratic).
REGTRANS (Regime Transition): The Polity has undergone a substantive regime
transition, a “regime change”, defined simply as a three-point change in either the
polity’s DEMOC or AUTOC score and may be either a negative value change or a positive
value change. A “democratic transition” is defined as at least a three-point positive
POLITY value change in three years or less from autocracy to a partial democracy.
D4 (Regime Transition Completed): Variable D4 is a flag variable that designates (by
code “1") the year of a regime change or the final year of a multi-year regime transition.
CHANGE (Total change in POLITY value): Net difference between PRIOR (the last
recorded POLITY value) and POST (new) polity values across a continuous polity
change.
STANDARDIZED AUTHORITY CODES (Transition Periods): A score of "-88"
indicates a period of transition. Some new polities are preceded by a "transition period"
during which new institutions are planned, legally constituted, and put into effect.
34
Democratic and quasi-democratic polities are particularly likely to be so established, in
a procedure involving constitutional conventions and referenda. During this period of
transition, all authority characteristic indicators are scored "-88".
World Bank World Development Indicators
NY.GDP.PCAP.KD (GDP per capita (constant 2000 US$)): GDP per capita is
gross domestic product divided by midyear population. GDP is the sum of gross value
added by all resident producers in the economy plus any product taxes and minus any
subsidies not included in the value of the products. It is calculated without making
deductions for depreciation of fabricated assets or for depletion and degradation of
natural resources. Data are in constant U.S. dollars.
SH.H2O.SAFE.ZS (Improved water source, as a % of population with access):
Access to an improved water source refers to the percentage of the population with
reasonable access to an adequate amount of water from an improved source, such as a
household connection, public standpipe, borehole, protected well or spring, and
rainwater collection.
SH.STA.ACSN (Improved sanitation facilities, as % of population with access):
Access to improved sanitation facilities refers to the percentage of the population with at
least adequate access to excreta disposal facilities. Improved facilities range from simple
but protected pit latrines to flush toilets with a sewerage connection.
IT.MLT.MAIN.P2 (Telephone lines (per 100 people)): Telephone lines are fixed
telephone lines that connect a subscriber's terminal equipment to the public switched
35
telephone network and that have a port on a telephone exchange. Integrated services
digital network channels and fixed wireless subscribers are included.
SH.IMM.IDPT (Immunization, DPT (% of children ages 12-23 months)): Child
immunization measures the percentage of children ages 12-23 months who received
vaccinations before 12 months or at any time before the survey. A child is considered
adequately immunized against diphtheria, pertussis (or whooping cough), and tetanus
(DPT) after receiving three doses of vaccine.
DT.ODA.ALLD.KD (Net official development assistance and official aid
received (constant 2009 US$)): Net official development assistance (ODA) consists of
disbursements of loans made on concessional terms, and grants by official agencies of
the members of the Development Assistance Committee (DAC), by multilateral
institutions, and by non-DAC countries to promote economic development and welfare
in countries and territories. Net official aid refers to aid flows (net of repayments) from
official donors to countries and territories in part II of the DAC list of recipients. Data
are in constant 2009 U.S. dollars.
NY.GDP.TOTL.RT.ZS (Total natural resources rents, as % of GDP): Total
natural resources rents are the sum of oil rents, natural gas rents, coal rents (hard and
soft), mineral rents, and forest rents.
36
Appendix – C
C1. DESCRPITIVE STATISTICS
Table6.1 Descriptive Statistics of the Entire Population
Dependent Variables No of Observations
Mean Standard Deviation
Minimum Maximum
GDP per Capita Growth Annual 5855 1.8996 6.343979 -50.29 101.13
Improvements in Safe Drinking Water Provision
708 80.977 31.86616 4 100
Improved Sanitation Provision 724 65.548 20.05245 3 100
Number of Telephone Lines per 1000 People
5220 12.364 16.5893 0 74.462
Immunization of Children Between Age 1 & 2
4273 74.407 24.79917 1 99
Source: Table based on own statistical analysis
Table 6.2 Descriptive Statistics of Countries that Experienced Democratization
Dependent Variables Number of Observations
Mean Standard Deviation
Minimum Maximum
GDP per Capita Growth Annual 2248 1.812 5.846644 -45.325 101.13
Improvements in Safe Drinking Water Provision
277 82.12 18.61152 17 100
Improved Sanitation Provision 279 67.45 28.85333 4 100
Number of Telephone Lines per 100 People
1933 10.24 12.41977 0.0314 57.42
Immunization of Children Between Age 1 & 2
1596 77.53 22.37948 1 99
Source: Table based on own statistical analysis
37
Table 6.3 Descriptive Statistics of Countries that are Permanent Democracies
Dependent Variables Number of Observations
Mean Standard Deviation
Minimum Maximum
GDP per Capita Growth Annual 1353 2.179 3.675592 -20.03 22.27
Improvements in Safe Drinking Water Provision
169 93.508 12.55659 39 100
Improved Sanitation Provision 159 86.509 22.94624 18 100
Number of Telephone Lines per 100 People
1232 28.583 21.31323 0.076 74.46
Immunization of Children Between Age 1 & 2
983 83.808 17.26421 6 99
Source: Table based on own statistical analysis
Table 6.4 Descriptive Statistics of Countries that are Permanent Autocracies
Dependent Variables Number of Observations
Mean Standard Deviation
Minimum Maximum
GDP per Capita Growth Annual 1974 1.99 8.190358 -50.29 92.58
Improvements in Safe Drinking Water Provision
254 71.59 20.77971 3 100
Improved Sanitation Provision 249 54.74 32.52718 6 100
Number of Telephone Lines per 100 People
1835 5.117 8.310745 0 48.31
Immunization of Children Between Age 1 & 2
1529 67.78 27.45846 1 99
Source: Table based on own statistical analysis
38
C.2 Political Regime Table Table 7. Democratization Episodes
Year Permanent Autocracy
Permanent Democracy
Borderlines Year
Albania 1992 Afghanistan Antigua Central African Republic
1993
Argentina 1983 Algeria Australia Comoros 1990
Armenia 1998 Angola Austria Iran 1997
Bangladesh 1991 Arab Emirates
Bahamas Nepal 1991
Benin 1991 Azerbaijan Barbados Niger 1999
Bolivia 1982 Bahrain Belgium Pakistan 1988
Brazil 1985 Belarus Belize
Bulgaria 1991 Bhutan Botswana
Cape Verde 1991 Bosnia Canada
Chile 1990 Brunei Colombia Reversal Year
Croatia 2000 Burkina Faso Costa Rica Gambia 1994
Czech Rep. 1993 Burundi Cyprus Lebanon 1975
Djibouti 1999 Cambodia Denmark Zimbabwe 1987
Dom. Rep 1978 Cameroon Dominica
Ecuador 1979 Chad Fiji
El Salvador 1994 China Finland
Estonia 1992 Congo, Dem. France
Ethiopia 1995 Congo, Rep. Germany
FYROM 1991 Cote d'Ivoire Iceland
Georgia 1995 Cuba India
Ghana 1996 Egypt Ireland
Greece 1975 Equatorial Guinea
Israel
Grenada 1984 Eritrea Italy
Guatemala 1996 Gabon Jamaica
Guyana 1992 Guinea Japan
Honduras 1982 Guinea-Bissau
Kiribati
Hungary 1990 Haiti Luxembourg
Indonesia 1999 Iraq Malta
Korea, Rep 1988 Jordan Mauritius
Latvia 1993 Kazakhstan Namibia
Lesotho 1993 Kenya Netherlands
Lithuania 1993 Kuwait New Zealand
39
Madagascar 1993 Kyrgyz Republic
Norway
Malawi 1994 Laos Papua New Guinea
Mali 1992 Liberia Sri Lanka
Mexico 1997 Libya Sweden
Moldova 1994 Mauritania Switzerland
Mongolia 1993 Morocco Trinidad & Toba
Mozambique 1994 Myanmar United Kingdom
Nicaragua 1990 North Korea United States
Nigeria 1999 Oman Venezuela
Panama 1994 Qatar Tonga
Paraguay 1993 Rwanda
Peru 1980 Saudi Arabia
Philippines 1987 Seychelles
Poland 1990 Sierra Leone
Portugal 1976 Singapore
Romania 1990 Somalia
Russia 1993 Sudan
Sao Tome. 1991 Swaziland
Senegal 2000 Syria
Serbia-Montenegro
2000 Tajikistan
Slovak Rep. 1993 Togo
Slovenia 1992 Tunisia
South Africa 1994 Turkmenistan
Spain 1978 Uganda
Suriname 1991 Uzbekistan
Tanzania 1995 Vietnam
Thailand 1992 Yemen
Turkey 1983 Malaysia
Ukraine 1994
Uruguay 1985
Zambia 1991
Source: Own table, adapted from Papaioannou, E. & Siourounis, G. (2004)
40
C.3 Graphical Representation of Indicators Across Regime Types
1.812711
2.179186 1.994951
0.5709631
Figure1. GDP per Capita Growth Annual
Transition Countries Permanent Democracies
Permanent Autocracies 3 year transition period
82.12996
93.50888
71.59724 74.35484
Figure2: Safe Drinking Water Improvements
Transition Countries Permanent Democracies
Permanent Autocracies 3 year transition period
Source: Illustrations based on own calculations
Source: Illustrations based on own calculations
41
67.45161
86.50943
54.74137 56.54839
Figure3: Improved Sanitation Provision
Transition Countries Permanent Democracies
Permanent Autocracies 3 Year Transition Period
10.24433
28.58359
5.117316
8.443647
Figure4: Telephone Lines per 100 People
Transition Countries Permanent Democracies
Permanent Autocracies 3 Year Transition Period
Source: Illustrations based on own calculations
Source: Illustrations based on own calculations
42
77.53133 83.80875
67.78352 72.93855
Figure5: Immunization Rates
Transition Countries Permanent Democracies
Permanent Autocracies 3 Year Transition period
537000000
567000000
576000000
Figure6: Net Development Assistance Received
Three years post transition Three years pre transition
All years after transition
Source: Illustrations based on own calculations
Source: Illustrations based on own calculations
43
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