Transcript CSAE template - University of Oxford

Democracy and Development
Anke Hoeffler
Centre for the Study of African Economies
Department of Economics, University of Oxford
Centre for the Study of African Economies
Testing the Neocon Agenda:
Democracy in Resource-Rich
Societies
Paul Collier and Anke Hoeffler
Centre for the Study of African Economies
Department of Economics, University of Oxford
Centre for the Study of African Economies
‘Neocon Agenda’
using ‘American Power to reshape the global
environment in the name of a set of liberal democratic
ideals. It is their belief that this will make the United
States more secure by reducing the seemingly intractable
problems of the Middle East, thus getting at some of the
root causes of terrorism.’
Selden (2004), Hoover Institution Policy Review
Centre for the Study of African Economies
natural
resources
growth
democracy
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Effect of Resources on Economic
Consequences of Democracy
• Is democracy more or less beneficial in resource rich
societies?
• Long run: democracy endogenous to resource rents
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Mechanisms that undermine the
benefits of democracy
• Public goods – Patronage goods
• In a well functioning polity: patronage goods result in
electoral defeat and prosecution – Restraints
• Model: provision of patronage goods s.t. to constraints
and how these constraints are affected by natural
resources
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Model
• Checks&balances prevent diversion into patronage
(more public goods)
• Constraints: Taxation results in more scrutiny
• Patronage is a function of government revenue and
embezzlement
• Embezzlement rate depends on taxation
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Model plus natural resources
• Natural resources relax the constraint (less taxation)
• Patronage is higher, due to less scrutiny not due to
higher revenue
• Embezzlement – natural resources (high/low)
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Democracy Scores
Period
Sample
1970-1998
1970
1974
1978
1982
1986
1990
1994
1998
4.03
3.29
3.08
3.18
3.43
3.72
4.52
5.29
5.26
High Natural Rents
Countries
1.46
0.96
0.89
1.32
1.76
1.28
1.89
2.00
1.92
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Democracy and Checks and Balances
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Growth, Democracy and Natural Resource Rents
ln GDP
Nat. Resources
Democracy
(1)
-0.045
(0.702)
-0.027
(0.154)
0.089
(0.036)**
NatRes·Dem
(2)
-0.130
(0.284)
-0.013
(0.572)
0.131
(0.005)***
-0.007
(7)
-0.219
(0.104)
(0.096)*
(0.002)***
-0.051
(0.042)**
0.033
NatRes t-1
NatRes·Checks
0.145
(0.002)***
-0.020
(0.033)**
Observations
R2
858
0.138
858
0.142
720
0.159
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Results
• democratic countries have higher growth
• interaction between resource rents and democracy is
negative
• interaction between resource rents and checks is
positive
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Conclusion
• a priori the effect of natural resources on the economic
consequences of democracy is ambiguous
• Distinction: electoral competition - checks&balances
• Resource rents unleash patronage politics
• Resource rents undermine checks&balances
• Checks&balances are a public good, undersupplied
• Neocon agenda has to be scaled up or down
Centre for the Study of African Economies
Democracy’s Achilles Heel
or,
How to Win an Election without
Really Trying
Paul Collier and Anke Hoeffler
Centre for the Study of African Economies
Department of Economics, University of Oxford
Centre for the Study of African Economies
Leader’s Choices
Growth g
Economic Policy
Rents R
Illicit tactics – penalty P
Win assured
Election Strategy
Licit tactics
Win depends on growth
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Table 1: How many Elections are Contested by Incumbents?
Dirty Elections
Clean Elections
Total
Incumbent did not
stand
73
155
228 (29%)
Incumbent election
251
307
558 (71%)
324 (41%)
462 (59%)
786
Total
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Table 2: How many Elections are Won by Incumbents?
Dirty Election
Clean Election
Total
Incumbent loses
48
132
180 (43%)
Incumbent wins
203
175
378 (57%)
251 (19%)
307 (81%)
558
Total
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Table 3: How do Incumbents Win Elections?
-0.727 (2.91)***
(6) Dirty
Elections Only
-0.596 (1.36)
(7) Clean
Elections only
-0.682 (2.37)**
1.227 (3.19)***
1.222 (3.22)***
0.930 (1.87)*
1.392 (2.07)**
0.015 (3.15)***
0.022 (4.02)***
0.027 (2.31)**
0.017 (2.96)***
0.078 (3.03)***
0.090 (3.39)***
0.083 (2.17)**
0.105 (2.42)**
0.194 (1.47)
0.190 (1.46)
0.292 (1.49)
0.198 (1.09)
-0.780 (3.86)***
-1.351 (4.71)***
-0.336 (1.21)
(4) Core Model
Democracy wave
S.S. Africa
Sec. Enrolment
Growth
Pop. growth
Clean election
-0.552 (2.47)**
-1.189 (4.36)***
Press freedom
(5)
-0.647 (2.12)**
Observations
530
477
205
272
Pseudo R2
0.10
0.13
0.19
0.06
-300.27
-261.73
-83.32
-173.90
Log Likelihood
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Table 5: What Determines Clean Elections?
(3)
(4)
(5)
(6)
Democracy Wave
0.569(2.03)**
0.672(1.80)*
0.384(0.86)
0.668(1.64)
0.689(1.88)*
ln Population
0.271(2.58)***
0.213(1.49)
0.259(1.81)*
0.175(1.19)
0.198(1.35)
Ln GDP(t-1)
0.568(3.87)***
0.626(3.15)***
0.343(1.90)*
0.920(5.04)***
0.563(2.83)***
Resource
-0.065(3.44)***
-0.096(3.05)***
0.014(0.39)
-0.132(3.06)***
-0.095(3.09)***
Checks
1.104(7.62)***
1.265(6.39)***
0.921(4.25)***
1.133(5.70)***
1.253(6.14)***
Pressfreedom
1.059(4.19)***
0.996(3.04)***
1.391(3.34)***
0.800(2.35)**
0.902(2.82)***
Termlimits
-1.669(1.14)
Rents*terml
0.352(2.15)**
Illegal Entry
-1.098(1.66)*
Observations
627
439
188
380
439
PseudoR2
0.57
0.65
0.38
0.66
0.66
Log Likelihood
-177.81
-102.77
-69.28
-81.93
-101.36
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