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Kiel Institute for World Economics Kiel Working Papers, Kiel Institute for World Economics

No 1521:
The agricultural and the democratic transitions. Causality and the Roundup model

Erich Gundlach and Martin Paldam

Abstract: Long-run development (in income) causes a large fall in the share of agriculture commonly known as the agricultural transition. We confirm that this conventional wisdom is strongly supported by the data. Long-run development (in income) also causes a large increase in democracy known as the democratic transition. Elsewhere we have shown that it is almost as strong as the agricultural transition. Recently, a method has been presented to weed out spuriousness. It makes the democratic transition go away by turning income insignificant, when it is supplemented by a set of formal controls. We show that the same method makes the agricultural transition go away as well. Hence, it seems to be a method that kills far too much, as suggested by the subtitle. This suggestion leads to a discussion of the very meaning of long-run causality

Keywords: Long-run growth, transitions, causality and spuriousness; (follow links to similar papers)

JEL-Codes: O1,; P5,; Q1; (follow links to similar papers)

20 pages, May 2009

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