Reconsidering the modernization hypothesis: The role of diversified production and interest-group competition
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- 2020 The Role of Diversified Production
Accepted author manuscript, 348 KB, PDF document
DOI
The modernization hypothesis attributes democracy to higher incomes. The hypothesis has been controversial with claims of no relationship or opposite causality. Using data on a large sample of countries over the period from 1995 to 2015, we show empirically that the hypothesis is valid by studying the role of diversified production and interest-group competition. Production diversification increases incomes and is associated with emergence of competing organized interest groups representing the different diversified sectors. The interest-group competition underlies democracy by restraining rent seeking for benefits that would otherwise be sought through single-decision-maker authoritarian government.
Keywords
- Interest groups, Modernization, Production diversification
| Original language | English |
|---|---|
| Article number | 101929 |
| Journal | European Journal of Political Economy |
| Volume | 65 |
| Early online date | 14 Aug 2020 |
| DOIs | |
| Publication status | Published - Dec 2020 |
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