Does High Income Promote Democracy?

The authors construct a statistical model with which to test whether the regularity that democracy is more commonly found among wealthy countries stems from a democratizing effect of high income or is due entirely to other factors, such as the historical context, various features of the institutional setting, and simultaneity with the process of leadership change. Even after correcting for these many other influences, the democratizing effect of income remains as a statistically significant factor promoting the emergence of democratic political institutions. The authors go on to find that leaders' risks of losing power rise during their time in office and that these risks are higher in more democratic countries.

The authors confirm the finding by Burkhart and Lewis-Beck that the democracy-promoting effect of income is stronger among the European countries. They suggest that high income has a more powerful democratizing effect among the Southern European countries because it interacts with pressure from major trading partners to democratize. This suggests a revaluation of policies designed to foster the replacement of authoritarian regimes by democratic ones through free trade.