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Income, Education and Democracy
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Income, Education and Democracy

Author

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  • Parente, Stephen L.

    (Department of Economics, University of Illinois.)

  • Sáenz, Luis Felipe

    (Department of Economics, University of South Carolina.)

  • Seim, Anna

    (Dept. of Economics, Stockholm University)

Abstract

This paper puts forth a unified theory of growth and polity in which economic development affects a country's polity and polity affects its development. Education crucially impacts both trajectories, first by moving resources out of the traditional sector and decreasing incomes of the landed class and second, by increasing the de facto power of the masses. An autocrat aligned with the landed class will try to retard education of its citizens but eventually will relinquish power when the transfers needed to prevent the masses from revolting become too large. At this point society democratizes and the economy's growth path is determined by the median voter. The model is calibrated to the economic and political histories of Britain from 1200-2000 and used to quantify the role of education, land inequality, constraints on the executive, and school curricula for the timing of modernization and democratization. The effects of these factors are found to be large, on the order of centuries. The paper also contributes to the empirical literature by showing that support for the modernization hypothesis based on System General Method of Moments estimation is more robust than previous research suggests and by showing that only primary education predicts democracy in this estimation method.

Suggested Citation

  • Parente, Stephen L. & Sáenz, Luis Felipe & Seim, Anna, 2019. "Income, Education and Democracy," Research Papers in Economics 2019:3, Stockholm University, Department of Economics.
    • Handle: RePEc:hhs:sunrpe:2019_0003
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    1. Sergei Guriev & Daniel Treisman, 2019. "Informational Autocrats," Journal of Economic Perspectives, American Economic Association, vol. 33(4), pages 100-127, Fall.

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    More about this item

    Keywords

    Modernization; Democratization; Unified Growth Theory; De Facto Power.;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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