Commodity terms of trade shocks and political transitions

In: Economics & politics, Volume 34, Issue 3, p. 465-493

Abstract

AbstractIn this paper, we estimate the effects of relative international commodity prices on political transitions accounting for time trends (since democracy might evolve in waves) and the fact that different autocratic regime types might respond differently. A standard deviation (2.1 percentage points) decrease in the growth rate of our 3‐year moving‐average relative price index increases the democratic transition probability by 0.5 percentage points or 13% of the mean probability. The transition probability moves nearly one for one with economic growth. Military autocracies might democratize after positive shocks. The autocratic‐transition effects are negative but insignificant.