Skip to main content
    • Aa
    • Aa
  • Get access
    Check if you have access via personal or institutional login
  • Cited by 19
  • Cited by
    This article has been cited by the following publications. This list is generated based on data provided by CrossRef.

    Albertus, Michael and Menaldo, Victor 2016. Capital in the Twenty-First Century—in the Rest of the World. Annual Review of Political Science, Vol. 19, Issue. 1, p. 49.

    Baklouti, Nedra and Boujelbene, Younes 2016. The Nexus Between Democracy and Economic Growth: Evidence from Dynamic Simultaneous-Equations Models. Journal of the Knowledge Economy,

    Garcia, Maria Melody and von Haldenwang, Christian 2016. Do Democracies Tax More? Political Regime Type and Taxation. Journal of International Development, Vol. 28, Issue. 4, p. 485.

    Haggard, Stephan and Kaufman, Robert R. 2016. Democratization During the Third Wave. Annual Review of Political Science, Vol. 19, Issue. 1, p. 125.

    Houle, Christian 2016. Inequality, Economic Development, and Democratization. Studies in Comparative International Development,

    Knutsen, Carl Henrik and Wegmann, Simone 2016. Is democracy about redistribution?. Democratization, Vol. 23, Issue. 1, p. 164.

    Vahabi, Mehrdad 2016. A positive theory of the predatory state. Public Choice,

    Doces, John A. and Magee, Christopher S. P. 2015. Trade and Democracy: A Factor-Based Approach. International Interactions, Vol. 41, Issue. 2, p. 407.

    Dorsch, Michael T. and Maarek, Paul 2015. Inefficient predation and political transitions. European Journal of Political Economy, Vol. 37, p. 37.

    Nikolova, Elena 2015. Destined for Democracy? Labour Markets and Political Change in Colonial British America. British Journal of Political Science, p. 1.

    Torregrosa Hetland, Sara 2015. Did democracy bring redistribution? Insights from the Spanish tax system, 1960–90. European Review of Economic History, Vol. 19, Issue. 3, p. 294.

    Bronner, Laura 2014. Property and Power: MPs' Assets and Support for Democratization in the 1867 Reform Act. Legislative Studies Quarterly, Vol. 39, Issue. 4, p. 439.

    Libman, Alexander and Obydenkova, Anastassia 2014. International Trade as a Limiting Factor in Democratization: an Analysis of Subnational Regions in Post-Communist Russia. Studies in Comparative International Development, Vol. 49, Issue. 2, p. 168.

    Wu, Wen-Chin 2014. When Do Dictators Decide to Open Trade Regimes?-Inequality and Trade Openness in Authoritarian Countries. International Studies Quarterly, p. n/a.

    Bjørnskov, Christian and Schröder, Philipp J.H. 2013. Are debt repayment incentives undermined by foreign aid?. Journal of Comparative Economics, Vol. 41, Issue. 4, p. 1073.

    Holkeboer, Christian Bachelder and Vreeland, James Raymond 2013. Calling Democracies and Dictatorships: The Effect of Political Regime on International Long-Distance Rates. Kyklos, Vol. 66, Issue. 3, p. 417.

    Svolik, Milan W. 2013. Learning to Love Democracy: Electoral Accountability and the Success of Democracy. American Journal of Political Science, Vol. 57, Issue. 3, p. 685.

    Ivanyna, Maksym and von Haldenwang, Christian 2012. A Comparative View on the Tax Performance of Developing Countries: Regional Patterns, Non-tax Revenue and Governance. Economics: The Open-Access, Open-Assessment E-Journal, Vol. 6, Issue. 2012-32, p. 1.

    Kumar, Manmohan S. and Quinn, Dennis P. 2012. Globalization and Corporate Taxation. IMF Working Papers, Vol. 12, Issue. 252, p. 1.


The Economic Origins of Democracy Reconsidered

  • JOHN R. FREEMAN (a1) and DENNIS P. QUINN (a2)
  • DOI:
  • Published online: 08 February 2012

The effects of inequality and financial globalization on democratization are central issues in political science. The relationships among economic inequality, capital mobility, and democracy differ in the late twentieth century for financially integrated autocracies vs. closed autocracies. Financial integration enables native elites to create diversified international asset portfolios. Asset diversification decreases both elite stakes in and collective action capacity for opposing democracy. Financial integration also changes the character of capital assets—including land—by altering the uses of capital assets and the nationality of owners. It follows that financially integrated autocracies, especially those with high levels of inequality, are more likely to democratize than unequal financially closed autocracies. We test our argument for a panel of countries in the post–World War II period. We find a quadratic hump relationship between inequality and democracy for financially closed autocracies, but an upward sloping relationship between inequality and democratization for financially integrated autocracies.

Corresponding author
John R. Freeman is Johnston Professor, Department of Political Science, University of Minnesota, 1414 Social Science Building, 267 - 19th Avenue South, Minneapolis, MN 55455 (
Dennis P. Quinn is Professor, McDonough School of Business, Georgetown University, Rafik B. Hariri Building, 37 and O Streets, NW, Washington, DC 20057 (
Linked references
Hide All

This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

Daron Acemoglu , and James A. Robinson . 2000. “Why Did the West Extend the Franchise?Quarterly Journal of Economics 115 (4): 1167–87.

Daron Acemoglu , and James A. Robinson . 2001. “A Theory of Political Transitions.” American Economic Review 91 (4): 938–63.

Daron Acemoglu , and James A. Robinson . 2002. “The Political Economy of the Kuznets Curve.” Review of Development Economics 6 (2): 183203.

Daron Acemoglu , Simon Johnson , and James A. Robinson . 2001. “The Colonial Origins of Comparative Development: An Empirical Investigation.”American Economic Review 91 (5): 13691401.

Daron Acemoglu , Simon Johnson , and James A. Robinson . 2002. “Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution.” Quarterly Journal of Economics 117 (4): 1231–94.

Daron Acemoglu , Simon Johnson , James A. Robinson , and Pierre Yared . 2008. “Income and Democracy.” American Economic Review 98 (3): 808–42.

Ben Ansell , and David Samuels . 2010. “Inequality and Democratization: A Contractarian Approach.” Comparative Political Studies 43 (12): 1543–74.

Robert J. Barro 1999. “Determinants of Democracy.” Journal of Political Economy 107 (6, pt. 2): S15883.

Robert H. Bates , and Da-Hsiang Donald Lien . 1985. “A Note on Taxation, Development, and Representative Democracy.” Politics and Society 14: 5370.

Michael M. Bechtel 2009. “The Political Sources of Investment Risk: Lessons from a Consensus Democracy.” Journal of Politics 71 (April): 661–77.

Thorsten Beck , and Ross Levine . 2004. “Stock Markets, Banks, and Growth: Panel Evidence.” Journal of Banking and Finance 28 (3): 423–42.

Geert Bekaert , and Campbell R. Harvey . 2000. “Foreign Speculators and Emerging Equity Markets.” Journal of Finance 55 (2): 565613.

Geert Bekaert , Campbell R. Harvey , and Christian Lundblad . 2005. “Does Financial Liberalization Spur Growth?Journal of Financial Economics 77 (1): 355.

R.W. Blundell , and S.R. Bond . 1998. “Initial Conditions and Moment Restrictions in Dynamic Panel Data Models.” Journal of Econometrics 87: 115–43.

Thomas Brambor , William R. Clark , and Matt Goldner . 2006. “Understanding Interaction Models: Improving Empirical Analyses.” Political Analysis 14 (1): 6382.

Jose A. Cheibub , Jennifer Ghandi , and James R. Vreeland . 2009. “Democracy and Dictatorship Revisited.” Public Choice 143 (April): 67101.

Klaus Deininger , and Lyn Squire . 1996. “A New Data Set Measuring Income Inequality.” World Bank Economic Review 10 (3): 565–92.

Harris Dellas , and Martin Hess . 2005. “Financial Development and Stock Returns.” Journal of International Money and Finance 24 (6): 891912.

Mihir A. Desai , and Dhammika Dharmapala . 2010. “Do Strong Fences Make Strong Neighbors?National Tax Journal 63 (4, pt. 1): 723–40.

Giorgio DeSantis , and Bruno Gerard . 1997. “International Asset Pricing and Portfolio Diversification with Time-Varying Risk.” Journal of Finance 52 (5): 18811912.

David Dollar , and Aart Kraay . 2002. “Growth Is Good for the Poor.” Journal of Economic Growth 7 (3): 199225.

B.J. Eichengreen , and D. Leblang . 2003. “Capital Account Liberalization and Growth: Was Mr. Mahathir Right?International Journal of Finance and Economics 8: 205–24.

Barry J. Eichengreen , and David Leblang . 2008. “Democracy and Globalization.” Economics and Politics 20 (November): 289334.

R.J. Franzese Jr., and J.C. Hays . 2007. “Spatial Econometric Models for the Analysis of TSCS Data in Political Science.” Political Analysis 15 (2): 140–64.

Robert J. Friedrich 1982. “In Defense of Multiplicative Terms in Multiple Regression Equations.” American Journal of Political Science 26 (November): 797833.

James K. Galbraith , and Hyunsub Kum . 2005. “Estimating the Inequality of Household Incomes.” Review of Income and Wealth 51 (1): 115–43.

William Goetzmann , Lingfeng Li , and Geert Rouwenhorst . 2005. “Long-Term Global Market Correlations.” Journal of Business 78 (1):138.

Timothy Hellwig , Eve M. Ringsmuth , and John R. Freeman . 2008. “The American Public and Room to Maneuver: Responsibility Attribution and Policy Efficacy in an Era of Globalization.” International Studies Quarterly 52 (4): 855–80.

Robert R. Kaufman 2009. “The Political Effects of Inequality in Latin America: Some Inconvenient Facts.” Comparative Politics 41 (3): 359–79.

Gary King , Michael Tomz , and Jason Wittenberg . 2000. “Making the Most of Statistical Analyses: Improving Interpretation and Presentation.” American Journal of Political Science 44 (April): 347–61.

Branko L Milanovic . 2005. “Can We Discern the Effect of Globalization on Income Distribution? Evidence from Household Budget Surveys.” World Bank Economic Review 19 (1): 2144.

Helen V. Milner , and Bumba Mukherjee . 2009. “Democratization and Economic Globalization.” Annual Review of Political Science 12 (May): 163–81.

Thomas Plümper , Vera Troeger , and Hannes Winner . 2009. “Why Is There No Race to the Bottom in Capital Taxation?International Studies Quarterly 53 (3): 761–86.

Dennis P. Quinn , and A. Maria Toyoda . 2007. “Ideology and Voter Sentiment as Determinants of Financial Globalization.” American Journal of Political Science 51 (April): 344–63.

Rafael Reuveny , and Quan Li 2003. “Economic Openness, Democracy and Income Inequality.” Comparative Political Studies 36 (5): 575601.

Kenneth L. Sokoloff , and Stanley L. Engerman . 2000. “History Lessons: Institutions, Endowments, and Paths of Development in the New World.” Journal of Economic Perspectives 14 (3): 217–32.

Duane Swank , and Sven Steinmo . 2002. “The New Political Economy of Taxation in Advanced Capitalist Democracies.” American Journal of Political Science 46 (3): 642–55.

Oliver Williamson . 1981. “The Economics of Organization: The Transaction Cost Approach.” American Journal of Sociology 87 (3): 548–77.

Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

American Political Science Review
  • ISSN: 0003-0554
  • EISSN: 1537-5943
  • URL: /core/journals/american-political-science-review
Please enter your name
Please enter a valid email address
Who would you like to send this to? *