Economic Development and Democracy Re-examined:

Differentiating the Dependent Variable

Joe Foweraker and Todd Landman

Department of Government

University of Essex

Wivenhoe Park

Colchester, Essex CO4 3SQ

United Kingdom

+44 (0) 1206-872129

Email: joef@essex.ac.uk and todd@essex.ac.uk

www.essex.ac.uk/government

Paper prepared for the ECPR Joint Sessions, Workshop 4, Copenhagen, Denmark, April 14-

19, 2000. We wish to acknowledge the support of the Economic and Social Research Council

(ESRC) for research into Comparative Democratic Performance: Institutional Efficacy and

Individual Rights. This is a draft: please do not cite or quote.

Abstract

It is generally accepted that there is some kind of relationship between

economic development and democracy, and that it can be demonstrated

by quantitative empirical evidence (Rueschemeyer, Stephens and

Stephens 1992: 11-39). For example, Lipset (1959) claims that there is a

strong association between the two, Helliwell (1994) asserts that they

exhibit a positive linear relationship, while Burkhart and Lewis-Beck

(1994) claim this relationship is indeed causal.

The difficulties of validating the empirical claims derive not so much

from the measures of economic development as from the measures of

democracy itself. Democracy is either present or absent (Pzreworski and

Limongi 1997), stable or unstable (Lipset 1959), or is reflected in single

scales that masquerade as summary indicators of the ‘degree of

democracy’ (Helliwell 1994; Burkhart and Lewis-Beck 1994) or

democratic performance (Polity III, see also Landman 1999). In other

words, the dependent variable (democracy) is insufficiently sensitive or

differentiated to provide a proper basis for testing the relationship.

Our inquiry deepens the investigation of the relationship by ‘unpacking’

the dependent variable. To do so it employs a newly constructed cross-

national and time-series data set that provides separate measures of eight

core values of liberal democratic government. The data set contains

measures for forty cases, including both advanced industrial and ‘third

wave’ democracies, over twenty-nine years. The values are

accountability, constraint, representation, participation, political rights,

civil rights, minority rights and property rights.

Our model assumes that the quality of liberal democratic government is

not unidimensional but can be measured across this range of values, so

creating ‘performance profiles’ and demonstrating the likely trade-offs

across distinct democratic values. Consequently, the inquiry begins to

explore the nature of the relationship between development and

democracy by measuring in what degrees and in what ways development

may influence the performance of liberal democratic government.

Introduction

Since the 1950s the quantitative comparison of country cases across space and time

has achieved a strong consensus about the positive linear relationship between

economic development and democracy (Rueschemeyer, Stephens, and Stephens 1992:

12-39 and Landman 2000: 61-71). This relationship suggests that those countries with

high levels of economic development tend to be democratic, while less developed

countries have never been democratic or have experienced democratic breakdown on

one or more occasions. This method of comparison uses standardized indicators of

development and democracy, and searches out empirical regularities across a

significant portion of the sample, with the temporal and spatial 'outliers' interpreted as

a natural occurrence within the global comparison (Landman 2000: 87-89). These

regularities support both a weak claim that development and democracy are

associated with one another (e.g. Lipset 1959, 1994; Cutright 1963) and a strong

claim that development causes democracy (Jackman 1972; Shin 1994; Helliwell

1994; Burkhart and Lewis-Beck 1994).

This consensus about the relationship has been used to justify the foreign aid policies

of advanced industrial democracies that seek to promote democracy elsewhere in the

world in recent decades (Landman 1999: 624-5). The consensus has also contributed

to sanguine views about contemporary processes of democratization (Huntington

1991; 1996), the future direction of global political change (Singer 1997), and even

the 'end of history' (Fukuyama 1992). In the latter case, the association between

development and democracy is assumed to prove that free markets will always

everywhere lead to free societies (Fukuyama 1992; Gray 1999: 1-22; Sen 2000).

Huntington (1996: 192) asserts that economic development is the 'major underlying

factor generating' the current wave of democratic transitions. Przeworski and Limongi

(1997:178) claim that economic growth increases the longevity of democratic

regimes. Singer (1997: 28) argues that 'by the end of the coming century, or the one

after, essentially the world will be wealthy, democratic, and peaceful, as North

America and Western Europe are now.'

Despite the evidence for the political benefits of higher levels of development some

doubts remain. On the one hand, the results of global comparisons are not always

confirmed by comparisons among smaller samples of countries. For example,

comparisons of democracies alone (e.g. Neubauer 1967) or countries within

developing regions like Latin America (e.g. Landman 1999) show no clear

relationship between development and democracy, while qualitative macro-historical

comparisons reveal intervening variables that mediate this relationship (de Schweinitz

1964; Moore 1966; Rueschemeyer, Stephens, and Stephens 1992). On the other, the

indicators of democracy themselves are undifferentiated. These indicators encompass

measures of democratic institutions (e.g. Banks 1998; Vanhanen 1997; Jaggers and

Gurr 1995) or of democratic rights (e.g. Freedom House 1987-1999; Poe and Tate

1994) or of both together (e.g. Arat 1991; Poe and Tate 1994; also Landman 1999:

615). Where different measures of democracy are available they are still combined in

summary scales for the purposes of comparative analysis.

In contrast to the extant studies this inquiry sets out to differentiate the dependent

variable by providing measures of eight core values of liberal democratic government.

These values are combined in a conceptual model that serves as the blueprint for a

newly constructed Database of Liberal Democratic Performance (Foweraker and

Krznaric 1999, 2000). These distinct values promote a more variegated view of the

relationship between economic development and democracy. Indeed, the statistical

analysis demonstrates that this relationship varies significantly both across values and

across geographical space. The first section of the inquiry describes the model. The

second section describes the measures of the distinct values and defends the country

sample. The third section explores the first-order relationships between economic

development and the model. The fourth section uses the pooled cross-section time

series data analysis (PCTS) with panel corrected standard errors (Beck and Katz

1995) to estimate the parameters for the relationship between economic development

and each of the values of the model, while controlling for regional differences. The

final section discusses the main theoretical implications of the empirical findings.

A Model of Liberal Democratic Performance

The model encompasses the core values of liberal democratic government, as founded

on the two key principles of liberty and equality and upheld through the rule of law

and the sovereignty of the people.1 It prescribes that these principles are achieved in

practice through the operation of eight values that combine the individual experience

of democracy (rule of law) with the institutional efficacy of democratic government

(sovereignty of the people). The first dimension contains the legal values of civil

rights, property rights, political rights, and minority rights. These rights and the rule of

law are important guarantees of individual freedoms and protections, and so help to

deliver the substance of democracy to the citizenry at large. The second dimension

contains the institutional values of accountability, representation, constraint and

1 A full exposition and defense of the model can be found in Foweraker and Krznaric (2000),

‘Measuring Liberal Democratic Performance: a Conceptual and Empirical Critique’ Political Studies

July/August.

participation. These are the values that protect the rule of law by making government

accountable to the people.

The construction of this model does not imply that none of these values is addressed

by extant measures of democracy. But most of the extant measures tend to focus on

just one or two of these values, and consequently can only provide a rather partial

picture of liberal democratic performance (cf. Hadenius 1992). Yet this partiality is

often disguised by single scales that masquerade as summary performance measures.

The model therefore aspires to expand the effective coverage of distinct aspects of

democratic governance, and so extend the normative range of the measures. It

assumes that liberal democratic performance is not one-dimensional, but can be

measured across the range, so creating performance profiles and admitting the

likelihood of trade-offs across distinct values (cf. Powell 1982). The question now is

not simply whether there is a relationship between economic development and

democracy, but in what ways in particular does development affect these different

dimensions of democracy, and how do they vary from one region to another.

Measuring Democratic Performance: Cases, Time, Variables

The Database of Liberal Democratic Performance (Foweraker and Krznaric 1999)

collates twenty-one measures of the eight core values of the model (two to four

measures per value) for forty countries over the twenty-nine years from 1970 to 1998

(N X T = 1160). These years cover the whole period of the 'third wave' of

democratization, and the countries include seventeen old democracies and twenty-

three new ones. Country cases were selected on the grounds of size, territorial

consistency, data availability, and geographical coverage and balance. The initial

population was the 118 countries described as either ‘liberal’ or ‘electoral’

democracies by Diamond (1997, 1999), and as reaching a minimum threshold of

procedural democracy by Freedom House standards by 1998. Countries with less than

one and a half million inhabitants were eliminated (leaving 82 cases), as were

countries formed or reformed as nation-states since 1989, including both Germany and

the Czech Republic (leaving 67 cases). Countries were also eliminated if they did not

appear in the Minorities at Risk database (Haxton and Gurr 1997), or the Binghamton

Human Rights database, or the Political Risk Services database on property rights

(Knack and Keefer 1995) - leaving 56 cases. The final selection was designed to

achieve a rough balance between old and new democracies, as distributed across

recognizable ‘clusters’, on historical, cultural, geographical, and economic grounds

(see Table 1). Since this case selection is not determined in any way by the values

informing the differentiated dependent variable, it is perfectly possible to make valid

inferences from the comparisons (King, Keohane, and Verba 1994: 129-132; Geddes

1990; Landman 2000: 45-47). The regression analysis itself also controls for regional

differences in the sample.

Table 1 about here

The variables composing the Database of Liberal Democratic Performance were

chosen to provide serviceable time-series measures that are sensitive (sufficient

variation), diverse (in sources and substance), and with different orders of scale

(ordinal and interval) and a variety of scale ranges. A systematic search of some forty

databases was carried out to find variables with the required geographical and

temporal scope and the necessary affinity to the core liberal democratic values to be

measured. Of the total twenty-one variables, eighteen were chosen for the present

inquiry and are listed in Table 2,2 attached to their respective values, divided between

the two main dimensions, and briefly described with their source and their summary

statistics (number of observations, mean, and standard deviation).3

The empirical coverage of these measures varies from comprehensive for

accountability, constraint and political rights (978 of the total 1160 observations), to

moderate for civil rights, property rights and minority rights (449 < N < 525), to

modest for participation (77 < N < 252), where observations are limited by electoral

cycles. The measures of central tendency show the wide diversity of the measures and

no common mean across them, indicating a successful differentiation of distinct

aspects of democratic performance. The geographical and temporal scope of the

measures provides sufficient degrees of freedom for substantive inferences to be made

about the relationship between economic development and democracy.

Table 2 about here

Economic Development and Democracy I

The definition of economic development has evolved from economic growth and

efficient use of resources to income distribution and employment to the social and

economic rights of citizenship (e.g. Todaro 1994: 13-18; Törnquist 1999: 7-9). But at

bottom it continues to be conceived as economic performance expressed through GDP

2 Three of the variables (military spending, inequality, local tax) were not selected for conceptual and

methodological reasons. First, all three measures in part reflect the level of economic development and

thus form part of the set of independent variables in the relationship. Second, upon further reflection,

these three variables may not capture the notion of democratic performance, since authoritarian and

democratic regimes alike could do quite well on any of them.

per capita or energy consumption (e.g. Helliwell 1994; Burkhart and Lewis-Beck

1994). This inquiry uses these two traditional measures, with energy consumption

measured in kilograms of coal equivalent per annum, but takes their log values to

reduce the problem of skewness. They are significantly correlated (Pearson's r = .43, p

< .001) for the country case-years of the Database. The examination of the

correlations between development and democracy uses both measures, but the

regression analysis is confined to GDP per capita in order to focus exclusively on

variations in the differentiated dependent variable.

The correlation matrices for the two economic development variables and the

democracy measures are reported in Table 3 (institutional measures) and Table 4

(rights measures). Focussing first on the associations between the democracy measures

themselves, it is clear that the correlations are stronger between measures of the same

value than across values – which is as it should be. The rights measures are more

strongly correlated overall than the institutional measures. The strongest of the rights

correlations is between competitiveness of participation and trade union rights (Tau b

= .63, p < .001), while the strongest of the institutional correlations is between

executive recruitment competition and executive constraint (Tau b = .79, p < .001).

The associations between economic development and democracy are clear. In

particular, GDP per capita is significantly correlated with fifteen of the eighteen

democracy measures, the exceptions comprising one representation and two minority

rights measures. Energy consumption presents a more mixed picture, with nine

positive and significant and three negative and significant correlations. Overall these

3 A full description and explanation of all the variables can be found in the Code Book attached to the

results replicate earlier findings on the positive association between economic

development and democracy and offer some support for the traditional thesis. But it is

the variations in the relationship that are important for this inquiry, and only more

advanced analysis that controls for time-dependent, unit, and regional effects can

achieve more specific inferences about the nature of the relationship.

Tables 3 and 4 about here

Economic Development and Democracy II

Most of the literature, not least the recent comparative studies by Helliwell (1994:

230) and Burkhart and Lewis-Beck (1995: 905-6), assumes that democracy is a linear

function of development. This inquiry follows this assumption in using a variation of

ordinary least squares regression (OLS) to test the relationship. This method of

estimation controls for unit and time effects across the pooled – or panel - cross-

section time series (PCTS) matrix of 1160 unit-time observations (forty N times

twenty-nine T).4 The data set comprises cases at different levels of development from

across the world, and the analysis estimates parameters for the bivariate relationship

between development and each value of democracy, while controlling for regional

differences in the sample.

Since the data matrix contains more units than time periods (N > T), OLS estimation

procedures are used with a common AR (1) autocorrelation term and panel-corrected

Database of Liberal Democratic Performance (1999), Data Archive, University of Essex, Study

Number 4046. 4 Using standard OLS regression without controlling for unit and time effects can produce problems of

heteroskedasticity, time-series autocorrelation and spatial auotcorrelation that separately and together

violate the basic error assumptions of linear regression, so leading to potentially false inferences

(Stimson 1985, Sayrs 1989; Beck and Katz 1995). Here, measures of democracy may trend over time,

and may vary more in some regions of the world than others.

standard errors (PCSEs) (Beck and Katz 1995: 639; 644-5). This procedure begins by

specifying the unit and time variables (i.e. country and year), while producing

corrected standard errors that reflect the 'stacked' or repeated panel structure of the

data. The inclusion of the AR (1) auto-regressive term controls for time-serial

correlation, expressed in this inquiry as the 'trending' of the democracy measures.5

Taken together, these steps in the method of estimation yield both consistent and

efficient b coefficients with accurate estimates of their variability (Beck and Katz

1995: 638). Inclusion of regional and/or 'cluster' dummy variables in the estimation

controls for possible differences between advanced industrial democracies and other

countries in the sample.

The parameter estimates for each of the democratic measures with adequate degrees

of freedom are reported in Tables 5-8. Parameters were estimated for twelve of the

initial eighteen measures of democracy listed in Table 2. Those excluded for reasons

of statistical reliability include government type (SGOVTYPE), presidential votes

(SPRESVOT), trade union rights (SUNION), government media censorship

(SCENSOR), economic freedom (SECONFR2), and women's equal rights

(SEQUAL). In general, the spatial and temporal coverage of these variables is too

patchy for the type of parameter estimation employed in this study (even after using

pairwise deletion of cases). Yet estimates are still available for at least one measure of

each distinct democratic value. The tables report OLS estimates with panel-corrected

5 The Beck and Katz (1995) procedure for OLS estimation with panel corrected standard errors

(PCSEs) has been incorporated into STATA 6.0. The first step is to specify the unit and time variables

with the tsset command as follows: tsset COUNTRY YEAR, yearly. This step is then followed by the

xtpcse command for each regression equation as follows: xtpcse DEPENDENT VARIABLE

INDEPENDENT VARIABLES, correlation (ar1) pairwise, which controls for time-serial and panel

heteroskedasticity.

standard errors in parentheses and inferential probability statistics for z – which is to

be interpreted in the same fashion as the more familiar t score.

The results in each column in Tables 5 and 6 are for the bivariate relationship between

development and democracy while controlling for the possible strong influence of

advanced industrial democracies in the sample.6 The analysis uses a dummy variable

with a value of one for these advanced cases and zero for all others. The results show

a positive and significant effect of economic development on ten of the twelve

measures of democracy.7 The exception is the effect of economic development on

incarceration rates, suggesting that countries with higher levels of development tend

to imprison higher proportions of their populations. But this result is distorted by the

exceptionally high rates of incarceration in the United States.8 Once the 'US effect' for

incarceration is controlled, it is clear that economic development has a clear positive

effect on nearly all aspects of democratic performance.

Yet the performance of the advanced group is distinctive. In general, the wealthier the

country the better it performs democratically. But the advanced group performs better

than might be predicted from its levels of development on five out of ten of the

measures.9 Quantitative improvement has created a qualitative shift to more

6 The advanced cluster includes the following thirteen countries: United States, Canada, United

Kingdom, France, Italy, Denmark, Netherlands, Switzerland, Spain, Portugal, Greece, Australia, and

New Zealand. 7 The co-efficients for legislative votes (SLEGIVOT) and political discrimination (SDISCR2) are non-

significant. 8 The dummy variable for the United States alone shows a strong positive co-efficient for incarceration

rates, while the co-efficient for the remaining countries of the advanced cluster is negative (see column

three in Table 6). The prison population of the United States increased by ninety-two per cent in the

years 1985-95 to six hundred per 100,000 inhabitants. 9 The dummy variable for this group has a positive and significant co-efficient for competitiveness of

executive recruitment (SELECTIO), executive constraint (SEXECONS), competitiveness of

participation (SCOMPETE), the protection of civil rights (SCIVIL2), and, as mentioned above, a

negative co-efficient for prison incarceration.

competitive procedures for executive recruitment and constraint, whether presidents

or prime ministers, as well as better protection for political and civil rights.

This qualitative shift between the performance of the advanced countries and the rest

begs the question of the relative performance of other regional groups in the

Database, namely Central and Eastern Europe, Africa, Latin America, Asia, and the

Middle East (which in this sample is the single case of Israel). The inclusion of

dummy variables for these groups (see Tables 7 and 8) does not alter the overall

results in any important way.10

But the regional results merit closer examination. First,

four of the five institutional variables for Eastern Europe, and three for Africa, are

negative and significant, indicating that the associations between economic

development and democratic governance are less strong for countries in these two

regions. Second, all the regional variables for the political rights measure

(competitiveness of participation) and one of the civil rights measures (human rights)

are also negative and significant (with the exception of Israel for competitive

participation), suggesting that the associations between development and the

protection of political and civil liberties are less strong everywhere outside of the

advanced industrial world. Furthermore, Eastern Europe and Africa imprison a higher

than proportional number of their population, while Israel’s protection of minority

rights is significantly weaker than ‘expected’ – owing no doubt to its treatment of the

Palestinian population.

Theoretical Implications

10

The same bivariate regressions as before show a positive and significant effect of economic

development on ten of the twelve measures of democracy, while the coefficients for legislative votes

(SLEGIVOT) and political discrimination (SDISCR2) are not statistically significant. These results

By differentiating the dependent variable it emerges that economic development has

an impact on nearly every aspect of democratic performance. Thus, GDP per capita is

significantly associated with fifteen out of eighteen performance measures, and GDP

parameter estimates are positive and significant for ten out of twelve such measures.

These findings lend rotund support to the traditional thesis, and there is little doubt

that – at this level of aggregation – democracy is indeed a linear function of

development.

Yet these findings may be fundamentally misleading if the regional effects are not

taken into account. On the one hand, the advanced group of democracies performs

better than expected on half of the performance measures. On the other, the rest of the

regional groups perform worse than expected on some or most of the measures –

depending on the region. In other words, the relationship between development and

democracy is indeed linear, but the advanced group falls along a different line than

the rest.11

In general, the qualitative gap between the advanced group and the rest is

created more by performance on the rights measures than on the institutional

measures, for the protection of political rights and civil liberties is much more

precarious everywhere outside of the advanced group. But Eastern Europe and Africa

also lag far behind on institutional democratic development, and, once their records of

incarceration are noted, must be regarded as the least democratically developed

regions.12

remain broadly in line with earlier empirical findings, as summarized in Rueschemeyer, Stephens, and

Stephens (1992: 12-39) and Landman (2000: 61-90). 11

There is reason to suppose that the traditional finding of a strong association between economic

development and democratic performance at global level is partly an artifice of the advanced group that

clusters at the upper end of the distribution, so inflating the coefficients and raising the t (z) scores. 12

This is a worrying result for advocates of the rapid eastward expansion of the EU.

The split between rights performance and institutional performance confirms the

conclusions of a growing literature on the qualitative distinction to be made between

‘electoral’ and ‘liberal’ democracies (for a full review see Diamond 1999). In the

‘electoral’ democracies the electoral process is a protected domain that ensures that

governments are indeed chosen by relatively free and fair elections. This domain is

protected by international monitoring and conditionalities of credit, finance and trade,

as well as by the domestic accountability implicit in political party competition. In

this way the electoral domain largely escapes contamination by clientelism and the

‘rule of informal rules’ (O’Donnell 1997, 49). But electoral politics of this kind does

not and cannot entail an effective rule of law, so that citizens and minorities may

enjoy restricted political rights, even while their civil rights of personal integrity and

equality before the law are infringed or ignored (Foweraker and Landman 1997). In

other words the split between the rights measures and the institutional measures

reflects the difference ‘between formal rights and actual rights, between commitments

to treat citizens as free and equal and practices which do neither sufficiently’ (Held

1992, 20).13

The findings of this study succeed in differentiating the effects of economic

development on democratic performance not only across diverse aspects of

democratic performance but also across distinct regions. In this way they are able both

to confirm and enhance the conclusions of Burkhart and Lewis-Beck (1994) who also

find that more economically advanced countries have superior democratic

performance. But they seek to demonstrate this superiority through interaction

13

In global perspective, the split between rights performance and institutional performance is more

salient in Latin America and Asia, where democratic governance has advanced despite the

precariousness of individual and minority rights and protections, than in Eastern Europe and Africa,

where both governance and rights appear equally retarded.

variables that link level of development to 'world position'. These variables show

negative results for countries in the 'semi-periphery' and 'periphery', suggesting that

economic development has less effect on democratic performance outside of the core

of the world economy. In sum, the introduction of world position into the estimates

produces a significant 'slope-shift' in the predicted effect of development on

performance.

Our approach is analogous but different. On the one hand, democratic performance is

differentiated not one-dimensional. On the other, regional groups are introduced

instead of world position. The combination of differentiated performance measures

with regional dummies reveals not a ‘slope-shift’ but an ‘intercept-shift’ that is

positive for advanced countries (across five out of ten measures) and negative for the

rest (across up to ten measures). These different results are illustrated in Figures 1a

and 1b, where the solid lines show the predicted values of democracy given the level

of economic development and the dotted lines capture the slope and intercept shifts.

Figure 1a illustrates Burkhart and Lewis-Beck’s results, figure 1b our own results.

Figures 1a and 1b about here

These two sets of results are broadly similar, and certainly point in the same direction.

But in some important respects our results are more specific, and possibly more exact.

Both sets of results demonstrate a significant contrast between the effects of economic

development on democratic performance inside and outside the core of the world

economy. Burkhart and Lewis-Beck explain this contrast in terms of ‘world system’

theory, and we concur wholeheartedly that it is time to ‘bring dependency theory back

in’ to the relationship between economic development and democracy. If this

explanation is correct, then the intercept shift produced by the introduction of regional

dummies appear to be a more exact representation of the ‘world system’ than the

slope shift produced by the interaction variables.14

For the intercept shift makes it

clear that the advanced group in the core of the world system has a different starting

point from the rest, and that its structural superiority will remain whether the rest

achieves higher rates of economic growth or not.15

At the same time our study allows us to specify more precisely the effects of the

structural gap on democratic performance. First, as already observed, the broadest

effect is on rights performance rather than institutional performance. So democratic

governance may be reasonably secure while individual liberties and minority

protections remain fragile. Second, this process of the ‘hollowing out’ (Diamond

1999) of democracy is most patent in Latin America and Asia where democratic

governance in the form of electoral democracy is most effective. Both Africa and

Eastern Europe, in contrast, appear to lag behind in both democratic governance and

individual rights. The possible explanations are, however, specific to the two regions.

Africa is arguably the most ‘dependent’ of the third world regions, lying on the

14

While both dummy variable techniques (regional vs. interaction) show a certain 'discount' of the

economic development effects on democratic performance, Burkhart and Lewis-Beck's (1994)

specification shows a discount in the slope of the relationship between economic development and

democracy. This discount allows them to calculate the 'net effects' of economic development on

democracy for countries in the semi-periphery and periphery (p. 906). The substantive interpretation of

their results is that the semi-periphery and periphery are less able to accrue the democratic benefits of

economic development. Moreover, the negative co-efficients for their interaction dummy variables are

hardly surprising given the fact that a second 'counting' of economic development for those countries

either in the semi-periphery or periphery is being used to explain a smaller value of the dependent

variable. Our specification and results, on the other hand, reveal the same slope for the relationship but

a more direct democratic performance discount based on regions, which have not been chosen on the

basis of economic development. Thus, the parallel regression lines capture more fully the divisions in

the world system identified by dependency theory. 15

It is telling that our advanced group encompasses ten long-established and industrially developed

democracies plus Portugal, Spain and Greece. The latter three countries were invited to join the

advanced ‘club’ of the EU on condition that they met a range of exacting democratic criteria.

extreme periphery of the world system. Eastern Europe, on the other hand, spent

decades in the political freezer of state socialism with no opportunity to develop forms

of democratic governance.

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Table 1: Sample of Countries (N = 40)

OLD (N = 17) NEW (N = 23)

USA, Canada, Japan

highly developed capitalist states

Costa Rica, Venezuela, Colombia

Latin America’s ‘old’ democracies

UK, France, Italy

majoritarian/intermediate Lijphart (1984: 219)

similar EU position

similar size/population/GDP

Denmark, Netherlands, Switzerland

consensual Lijphart (1984: 219)

similar size/population/GDP

Australia, New Zealand, India, Sri Lanka

Asia/Oceania

British colonial heritage

Israel

Only Middle East case

Chile, Argentina, Brazil

Southern Cone dictatorships

El Salvador, Nicaragua, Guatemala

Central American cases

Poland, Hungary

economically advanced

Central European

not Ottoman Empire (Austro-Hungarian)

Bulgaria, Romania, Albania

less economically advanced

Eastern Europe

Ottoman Empire

Spain, Portugal, Greece

southern European dictatorships

South Korea, Philippines, Taiwan

east, south-east Asian

Pakistan, Bangladesh, Turkey

Islamic influence

South Africa, Malawi, Ghana

British colonial experience

Table 2: Differentiating Democracy as a Dependent Variable

Democratic Values Variables† Description, source,

And observations (N)

Institutional Efficacy

Accountability SELECTIO

Executive recruitment competition (Jaggers and

Gurr 1995), N = 978, = .74, = .36

SGOVTYPE Civilian vs. military government (Cingranelli and

Richards 1998) N = 147, = .71, = .36

Representation SPARSEAT

Size of the legislature/number of seats for the

largest party (Banks 1998) N = 252, = .42, =

.22

SDISPROP Electoral disproportionality (Ersson 1998, Zelaznik

1999), N = 185, = .18, = .12

Constraint SEXECONS Executive constraints (Jaggers and Gurr 1995), N =

978, = .66,

Participation SLEGIVOT

Legislative votes as % of voting age population

(International IDEA 1997),

N - 252, = .69, = .18

SPRESVOT Presidential votes as % of voting age population

(International IDEA 1997),

N = 77, = .63, = .18

Individual Rights

Political rights SCOMPETE Competitiveness of participation (Jaggers and Gurr

1995), N = 978, = .68, = .33

SUNION Trade union rights (Cingranelli and Richards 1998),

N = 173, = .70, = .33

SCENSOR Government media censorship (Cingranelli and

Richards 1998), N -= 172, = .65, = .32

Civil rights SCIVIL2 Amnesty International human rights (Poe and Tate

1994), N = 510, = .55, = .31

PRISON Prisoners per 100,000 (Walmsey 1996), N = 236,

= 114.65 = 88.78

Property rights SECONFR2 Index of economic freedom (Johnson et al. 1998),

N = 156, = .56, = .15

SPROPERT Risk of expropriation (Knack and Keefer 1995), N=

525, = .72, = .23

Minority rights SWOMENRE % of women in lower house of legislature (Inter-

Parliamentary Union 1995), N = 265, = .09, =

.08

SEQUAL Women's equal rights (Cingranelli and Richards

1998), N = 173, = .47, = .31

SDISCRI2 Political discrimination (Haxton and Gurr 1997), N

= 449, = .33, = .31

SRESTRI2 Cultural restrictions (Haxton and Gurr 1997), N =

210, = .87, = .19 †The variables are taken from the Foweraker and Krznaric (1999) Database of Liberal Democratic

Performance; with the exception of PRISON, all variables range from low (0) to high (1) levels of

democratic performance. N = number of observations = mean, = standard deviation.

Table 3. Correlation Matrix for Economic Development and Institutional Efficacy

Accountability Representation Constraint Participation

SELECTIO SGOVTYPE SPARSEAT SDISPROP SEXECONS SLEGIVOT SPRESVOT

SELECTIO - .47*** .44*** .12 .76*** .17*** .22**

SGOVTYPE - .31*** .18 .50*** -.07 .58

SPARSEAT - .35*** .39*** .09** .11

SDISPROP - .01 .09* -.10

SEXECONS - .23*** .27***

SLEGIVOT - .79***

SPRESVOT -

LNPCGDP .43*** .49*** .26*** .05 .51*** .10*** .15*

LNENERGY .22*** .13** .01 -.13** .27*** -.13** -.03

Correlations reported are Kendall's Tau b, ***p < .001; **p < .05; *p < .10; SELECTIO = executive recruitment competition, SGOVTYPE =

civilian vs. military government, SPARSEAT = size of the legislative chamber/number of seat for the largest party, SDISPROP = electoral

disproportionality, SEXECON = executive constraints, SLEGIVOT = legislative votes as a percentage of voting age population, SPRESVOT

= presidential votes as a percentage of the voting age population, LNPCGDP = natural log of per capita GDP; LNENERGY = natural log of

energy consumption. Both measures of economic development are correlated at Tau b = .31, p < .001, or Pearson's r = .43, p < .001.

Table 4. Correlation Matrix for Economic Development and Individual Rights

Political Rights Civil Rights Property Rights Minority Rights

SCOMPETE SUNION SCENSOR SCIVIL2 PRISON SECONFR2 SPROPERT SWOMENRE SEQUAL SDISCRI2 SRESTRI2

SCOMPETE - .62*** .53*** .56*** -.30*** - .50*** -.20 .38*** .19*** .13**

SUNION - .52*** .29*** -.20** .23 .34*** .30** .41*** .06 .31**

SCENSOR - .29*** -.03 .52*** .44*** .21 .37*** .09 .12

SCIVIL2 - - .36*** .12* .47*** .11** .11

PRISON -.02 -.02 -.02 -.24** .37*** .12

SECONFR2 - .38** .33 .52*** .27** .16

SPROPERT - .24*** .31*** .08** .09*

SWOMENRE - .53*** .16** .33***

SEQUAL - .33*** .39***

SDISCRI2 - .21***

SRESTRI2 -

LNPCGDP .57*** .46*** .48*** .39*** .-.11** .61*** .58*** .20*** .45*** .03 .10

LNENERGY .24*** .10 .17** .19*** .22** .18** .34*** -.11** -.01 .06 -.08

Correlations reported are Kendall's Tau b, ***p < .001; **p < .05; *p < .10; SCOMPETE = competitiveness of participation, SUNION = trade union rights, SCIVIL2 =

Amnesty International human rights, SPRISON2 = prisoners per 100,000, SECONFR2 = index of economic freedom, SPROPERT = risk of expropriation,

SWOMENRE = percentage of women in the lower house of the legislature, SEQUAL = women's equal rights, SDISCRI2 = political discrimination, SRESTRI2 =

cultural restrictions, LNPCGDP = natural log of per capita GDP; LNENERGY = natural log of energy consumption. Both measures of economic development are

correlated at Tau b = .31, p < .001, or Pearson's r = .43, p < .001; See Table 2 for labels of the democratic variables.

Table 5 Parameter estimates for economic development and democratic performance (Institutional Efficacy)

PCTS regression with panel corrected standard errors (PCSEs)

Executive

recruitment

(SELECTIO)

Party size

(SPARSEAT)

Disproportionality

(SDISPROP)

Executive

constraint

(SEXECONS)

Legislative votes

(SLEGIVOT)

Constant -.07

(.32)

.006**

(.15)

.05

(.07)

-.44

(.33)

4.75**

(2.29)

LNPCGDP .10***

(.04)

.05***

(.02)

.02**

(.009)

.13***

(.04)

-.46

(.26)

Advanced dummy

North America,

West and Southern

Europe, and Oceania

.14**

(.07)

.02

(.04)

.009

(.02)

.17**

(.08)

.21

(.26)

Rho .90 .86 -.28 .92 .78

Observations 727 677 142 727 12

R2 .48 .58 .69 .39 .78

Wald Chi-Square 21.13*** 14.68*** 3.53 33.49*** 3.96

Unstandardized co-efficients reported with panel corrected standard errors (PCSEs) in parentheses, probability of z for PCSEs and

for Wald Chi-Square is *p < .10, **p < .05, ***p < .01; LNPCGDP = natural log of per capita gross domestic product.

Table 6 Parameter estimates for economic development and democratic performance (Individual Rights)

PCTS regression with panel corrected standard errors (PCSEs)

Competitiveness of

participation

(SCOMPETE)

Amnesty human

rights

(SCIVIL2)

Incarceration

(PRISON)‡

Risk of

expropriation

(SPROPERT)

Women's

representation

(SWOMENRE)

Political

discrimination

(SDISCR2)

Cultural

restrictions

(SRESTRI2)

Constant -.23

(.19)

.10

(.19)

-169.57***

(48.88)

-.76

(.39)

-.03

(.04)

.06

(.38)

.07

(.47)

LNPCGDP .10***

(.02)

.05**

(.02)

33.78***

(5.90)

.18***

(.04)

.01***

(.006)

.03

(.04)

.10**

(.05)

Advanced dummy

North America,

West and Southern

Europe, and Oceania

.26***

(.06)

.34***

(.04)

-70.97***

(15.05)

-.05

(.08)

.008

(.01)

.05

(.09)

.03

(.85)

United States 372.76***

(40.510

Rho .91 .72 .87 .90 .77 .95 1.00

Observations 727 477 207 494 193 426 197

R2 .61 .64 .71 .74 .65 .14 .07

Wald Chi-Square 98.18*** 122.18*** 135.56*** 17.70*** 13.21 2.62 3.80

Unstandardized co-efficients reported with panel corrected standard errors (PCSEs) in parentheses, probability of z for PCSEs and for Wald Chi-Square is *p < .10,

**p < .05, ***p < .01; LNPCGDP = natural log of per capita gross domestic product; ‡PRISON is the only variable not rescaled or transformed, which measures the

number of prisoners per 100,000 population.

Table 7 Parameter estimates for economic development and democratic performance (Institutional Efficacy)

PCTS regression with panel corrected standard errors (PCSEs)

Executive

recruitment

(SELECTIO)

Party size

(SPARSEAT)

Disproportionality

(SDISPROP)

Executive

constraint

(SEXECONS)

Legislative votes

(SLEGIVOT)

Constant .06

(.32)

.19

(.17)

.05

(.80)

-.30

(.36)

.53***

(.12)

LNPCGDP .10***

(.03)

.04**

(.02)

.02*

(.01)

.14***

(.04)

.02

(.01)

Regional dummies†

Central and Eastern

Europe

-.29**

(.12)

-.23**

(.10)

-.05**

(.03)

-.29*

(.17)

-.01

(.07)

Latin America -.13

(.10)

.05

(.04)

.02

(.02)

-.21**

(.10)

-.07**

(.03)

Asia -.07

(.10)

-.05

(.06)

-.07***

(.02)

-.08

(.09)

-.05

(.04)

Mideast

(Israel)

.05

(.08)

.08*

(.04)

-.01

(.03)

.08

(.25)

.10***

(.03)

Africa -.26**

(.13)

-.22***

(.05)

.35***

(.01)

-.22*

(.13)

-.10

(.11)

Rho .89 .86 .25 .91 .95

Observations 727 677 142 727 198

R2 .52 .61 .74 .41 .93

Wald Chi-Square 26.31*** 67.45*** 5061.71*** 36.92*** 126.06***

Unstandardized co-efficients reported with panel corrected standard errors (PCSEs) in parentheses, probability of z for PCSEs and

for Wald Chi-Square is *p < .10, **p < .05, ***p < .01; LNPCGDP = natural log of per capita gross domestic product; †The co-

efficients for the regional dummies are interpreted with reference to the advanced industrial democracies in the sample.

Table 8 Parameter estimates for economic development and democratic performance (Individual Rights)

PCTS regression with panel corrected standard errors (PCSEs)

Competitiveness of

participation

(SCOMPETE)

Amnesty human

rights

(SCIVIL2)

Incarceration

(PRISON)‡

Risk of

expropriation

(SPROPERT)

Women's

representation

(SWOMENRE)

Political

discrimination

(SDISCR2)

Cultural

restrictions

(SRESTRI2)

Constant .18

(.27)

.19

(.25)

-265.58***

(53.73)

-1.00**

(.41)

-.03

(.05)

-.02

(.51)

.38

(.34)

LNPCGDP .09***

(.03)

.07***

(.03)

40.20***

(4.54)

.20***

(.04)

.02***

(.005)

.04

(.05)

.06*

(.03)

Regional dummies†

Central and Eastern

Europe

-.43***

(.15)

-.12***

(.06)

91.67**

(38.84)

.12

(.10)

.07*

(.04)

.20

(.22)

-.05

(.06)

Latin America -.22***

(.07)

-.40***

(.06)

44.64

(38.70))

-.02

(.09)

-.01

(.01)

.002

(.09)

-.12

(.20)

Asia -.25***

(.09)

-.29***

(.06)

-15.62

(18.97)

.15*

(.08)

-.02*

(.01)

-.04

(.12)

-.004

(.11)

Mideast

(Israel)

-.14

(.22)

-.49***

(.06)

8.12

(32.64)

-.02

(.07)

-.05***

(.01)

-.34***

(.08)

-.32**

(.15)

Africa -.42***

(.09)

-.22**

(.11)

228.93***

(29.02)

.18

(.11)

-.01

(.02)

-.02

(.36)

.10

(.20)

Rho .94 .70 .87 .88 .14 .96 .99

Observations 727 477 207 494 193 426 197

R2 .50 .68 .57 .78 .71 .12 .73

Wald Chi-Square 90.73*** 246.84*** 1040.96*** 40.52*** 225.51*** 304.57*** 854.54***

Unstandardized co-efficients reported with panel corrected standard errors (PCSEs) in parentheses, probability of z for PCSEs and for Wald Chi-Square is *p < .10,

**p < .05, ***p < .01; LNPCGDP = natural log of per capita gross domestic product; †The co-efficients for the regional dummies are interpreted with reference to the

advanced industrial democracies in the sample. ‡PRISON is the only variable not rescaled or transformed, which measures the number of prisoners per 100,000

population.

Dpredicted

Dperiphery

Dsemi-periphery

Dpredicted

Dless-advanced

Dadvanced

Dem

ocr

acy

Dem

ocr

acy

Economic Development Economic Development

Figure 1a. Slope-shift effects Figure 1b. Intercept-shift effectsBurkhart and Lewis-Beck (1994) Foweraker and Landman