Haakon Gjerløw and Carl Henrik Knutsen

Apr 6, 2022

One Road to Riches?

How State Building and Democratization Affect Economic Development

Cambridge University Press 2021

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Building effective state institutions before introducing democracy is widely presumed to improve different development outcomes. Conversely, proponents of this "stateness-first" argument anticipate that democratization before state building yields poor development outcomes. In One Road to Riches?: How State Building and Democratization Affect Economic Development (Cambridge UP, 2021), we discuss several strong assumptions that (different versions of) this argument rests upon and critically evaluate the existing evidence base. In extension, we specify various observable implications. We then subject the "stateness-first" argument to multiple tests, focusing on economic growth as an outcome. First, we conduct historical case studies of two countries with different institutional sequencing histories, Denmark and Greece, and assess the "stateness-first" argument (e.g., by using a synthetic control approach). Thereafter, we draw on an extensive global sample of about 180 countries, measured across 1789-2019 and leverage panel regressions, pre-parametric matching, and sequence analysis to test a number of observable implications. Overall, we find little evidence to support the "stateness-first" argument.

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