Polity Index Research Articles

Does Trade Openness Influence Democracy? Evidence from Ex-communist Countries

Abstract This paper analyses the influence of trade on democracy, aiming to understand whether becoming more open to trade also makes a country more democratic. So far, the scientific literature that investigate this topic is scarce, and has not reached any solid consensus: while some papers find a positive effect of trade openness on democracy levels, others find a negative effect, or no effect at all. Moreover, the empirical literature on this topic is also very prone to technical problems of the research design, such as endogeneity, which increases the risk of obtaining biased estimates. This paper uses an instrumental variable approach, this way avoiding any omitted variable bias and reverse causality problems. More precisely, we instrument trade openness with its natural, geography-determined rate, based on the gravity equation of trade; we then use the predicted rate of trade openness to capture its effect on democracy, employing an OLS regression on a panel sample of 27 post-communist countries across a period of 24 years. Democracy is measured using the polity index (from Polity V dataset), and also five other variables that capture different facets of democracy – electoral, liberal, participatory, deliberative and egalitarian dimension (from V-Dem dataset). Empirical results suggest that trade openness has a significant, positive effect on democracy. The effect is only marginally higher for the liberal dimension of democracy, and rather similar in magnitude for the rest of four dimensions.

Financial development and declining growth volatility: Explanations and an empirical study with the latest FD index

Growth is liked, but volatility is not. Volatility implies uncertainty, as up and down are often large unpredictable fluctuations. In fact, according to the financial literature, people pay a price to reduce it. Some studies found a trend that macroeconomic volatility has been changing and proposed some structural changes that are responsible for its decline. Many studies have found that financial development helps growth. And relatively few studies have shown that financial development also explains structurally varying macroeconomic volatility. In this panel study, we investigated the relationship between financial development and growth volatility using the Financial Development Index with recent data from eighty-six countries. We also looked at its relationship with consumption and investment fluctuations using its sub-indices. The index is the result of many dimensions of financial development such as access and efficiency, not just the size of credit. We find that financial development reduces growth variability across various horizons, with some signs of heterogeneity and nonlinearity. Institutional development (polity index) and volatility in global economic growth are other important consistent variables.

Political Regime Types and Income Inequality in Pakistan

Rising income inequality is one of the major issues in the Pakistani economy. It has been investigated in different dimensions. Different cross-sectional and panel studies have extensively examined the connection between political regime types and income inequality over a specific period. The findings have displayed significant variations across countries and regions. This study delves into exploring the relationship between political regime types and income inequality, specifically in Pakistan, utilizing time series data spanning from 1972 to 2019. To measure political regime types, the Polity index is employed, while the Gini-Coefficient serves as the metric for income inequality. Additionally, this research takes into account various factors, such as GDP per capita, the ratio of direct taxes to GDP, the percentage of government expenditure on education relative to GDP, and the percentage of government expenditure on community and social services relative to GDP, in order to control for their direct effects. The stationarity of the data is assessed using the augmented Dickey-Fuller test, while the autoregressive distributive lag (ARDL) model is employed to examine the cointegrating relationship among the variables in the model. The empirical findings from the estimation affirm the presence of a lasting correlation between Pakistan's political regime types and wealth disparities. The findings show that different political regimes have a notable detrimental effect on the nation's economic disparity. To be more precise, a one percent increase in the Polity score is associated with a 0.45 percent long-term and a 0.25 percent short-term fall in the Gini Coefficient. This suggests that Pakistan should work toward a stable democratic political framework and put into place sustainable economic policies in order to successfully address income disparity and achieve a desirable level of income distribution

The Relationship between Types of Political Regimes and Income Inequality in Pakistan

Aim: Income inequality has emerged as a significant concern within the Pakistani economy, prompting extensive investigations across various dimensions. This study aims to explore the relationship between types of political regime and income inequality, specifically in Pakistan.
 Methods: Time series data spanning from 1972 to 2019 were utilized, obtained from the World Bank, Polity IV Project, and the Handbook of Statistics on Pakistan Economy by the State Bank of Pakistan. To measure types of political regimes, the Polity index was employed, while the Gini coefficient served as the metric for income inequality. Additionally, this research considered several factors, including GDP per capita, the ratio of direct taxes to GDP, the percentage of government expenditure on education relative to GDP, and the percentage of government expenditure on community and social services relative to GDP, to control for their direct effects. The stationarity of the data was assessed using the augmented Dickey-Fuller test, while the autoregressive distributive lag (ARDL) model was employed to examine the cointegrating relationship among the variables in the model.
 Results: The empirical findings from the estimation demonstrate a lasting negative correlation between the types of political regimes in Pakistan and wealth disparities in the short and medium term. The results highlight the notable detrimental effect of different political regimes on the nation's economic disparity.
 Conclusion: A one percent increase in the Polity score is associated with a 0.45 percent long-term and a 0.25 percent short-term decrease in the Gini coefficient.
 Recommendation: Pakistan should strive towards a stable democratic political framework and implement sustainable economic policies to effectively address income disparity and achieve a desirable level of income distribution.

DEMOCRACY AND ECONOMIC GROWTH:THE CASE OF MOLDOVA

This article addresses the issue of the cause-and-effect relationship between democracy and economic growth in Moldova from 1990 to 2020. This problem is one of the key topics of modern economic political science, but the results concerning the influence of the political system on economy are still ambiguous. No research has been conducted to date on this issue for Moldova. The econometric analysis was conducted using tree composite indexes of democracy, published by Freedom house, Polity V and V-Dem Varieties of Democracy. The causal impact between democracy indexes and per capita GDP growth is tested using Granger causality analysis. The results show that the choice of the democracy indicator and the time interval influences the modeling outcome. All three democracy indices depict different democratic trends at the country level. Although there is a positive causal link between the Polity index and GDP per capita in a short period, other results show no evidence that democratic reforms did contribute to economic growth in Moldova and vice versa. We conclude that democratization in conditions of weak law and political instability contributed to the emergency of a so-called hybrid democracy in Moldova.

The MENA region's need for more democracy and less bureaucracy: A gravity model controlling for aspects of governance and trade freedom in MENA

AbstractThis paper considers a domain of governance and trade freedom indicators in order to reveal some of the dimensions along which the MENA region's intra‐regional trade and export intensity might be fostered. Historically, conflicts, crises and oil interests have impeded intra‐MENA integration efforts and kept trade‐flow intensities between the region's countries below those of its trade with RoW. But it seems evident that similarities in the governance and trade freedom indicators of MENA countries would promote such trade flows. Our empirical methodology here is to use a classical trade gravity model with augmented variables to measure intra‐regional trade and export flows for MENA countries and compare them with flows for MENA_E.U. and MENA_RoW. We develop three sets of scenarios to capture the impact of governance and trade freedom indicators accordingly: First, we introduce a standardised polity index to measure its impact on accelerating intra MENA's export flows compared with MENA_EU and MENA_RoW. Second, we introduce a range‐based Polity IV index and trade freedom index to test whether similarity in the governance indicators of MENA countries leads to significant intra‐regional trade flows. We also test the interaction between both. Finally, to check the robustness of export flows, we include World Governance Indicators (WGI) and their sub‐components in the estimations. The main result is that when two MENA trade partners are both classified as mixed regimes under the Polity IV index ranges, the coefficient becomes highly significant and bilateral trade flows increase by 1.25%. Components of (WGI) specifying government effectiveness, rule of law and control of corruption increase exports for MENA's origin exporter countries. Finally, the interaction term (Polity IV and Trade freedom ranges) captures continuous improvement in the quality of governance and self‐regulated systems implemented by governing executives and authorities as they shift away from pressure and interest groups. This leads to higher degrees of mutual understanding and benefits to the region's trade flows and policies.

A study of triggering events: When do political regimes change?

Political regimes are stable most years, but sometimes they jump. The stable years are periods of political status-quo equilibrium. To break a status quo requires a triggering event. The paper is an attempt to identify and classify what close observers at the time thought were the triggering events in a sample of 262 larger regime changes between 1960 and 2015 in 170 countries. The sample consists of all changes in the Polity index with a numerical rating above 3 (i.e. of 4 or more). The source for the triggering events is country-relevant articles in The Economist. Triggering events are classified in a (2 × 2) table with four cells: domestic political (DP), domestic economic (DE), external political (XP), and external economic (XE), which remains empty. By far the most common is DP, but the domestic political events prove to be very different. Thus, most jumps are exogenous in the perspective of development.

The demand for military spending in Latin American countries

The allocation of resources to defence and national security is influenced by several factors, both domestic and external. Empirical findings suggest that military spending is determined by economic, strategic, political, and security factors. Studies that estimate demand functions for such budgetary outlays focus either on individual country case studies or on groups of countries that share some similar traits and characteristics or belong to the same geopolitical region. This paper, using a panel of 12 Latin American countries and quantile regression analysis, estimates the demand for military expenditure over the 1965–2015 period. Results reported herein indicate that such spending has been driven by both domestic and external factors. The former include the economy as well as the political characteristics of the government as these are quantified by the Polity index of democracy. Intrastate conflict that has plagued many Latin American countries also emerges as a strong driving force in the allocation of resources to defence. Military spending by neighbouring countries with common borders emerges as the external strategic determinant that affects the demand for defence expenditures.

Jumps into Democracy: Integrating the Short and Long Run in the Democratic Transition

SummaryWhen countries become wealthy, they become democracies. Using kernel regressions, we show that the long‐run path in the Polity index looks exactly like a transition curve. However, the literature lacks a short‐run model that can generate this path. We note that the main political regime index is constant for most years. However, the stability is interrupted by infrequent jumps that are often quite large. We argue that periods of constancy represent political status quo equilibria that need to be broken by a triggering event. We find that such events occur randomly; they cannot be explained by economic variables. But if an event causes a change in the regime, the jump is normally in the direction of the transition curve. Hence, the curve acts as an attractor for the jumps. This is a new finding that integrates the short and the long run of the Democratic Transition.

Democracy in Ukraine and Its Current Struggles

This study analyses the issue of democracy in Ukraine and major factors which determine the prospects for democracy in the one of the largest European countries. The research question is as to how Ukraine fares in terms of common democracy criteria. The related question is as to which factors or obstacles affect democracy in Ukraine, specifically after the “Euromaidan.” The major measures of democracy, such as the Polity and Freedom House indexes, show that Ukraine did not turn into a democracy as a result of the “Euromaidan.” The Polity index and various evidence, specifically concerning the violent political transition during the “Euromaidan,” suggest a relative movement towards greater authoritarianism. Such development contrasts with relative democratization of Ukraine after it gained independence following a collapse of the Soviet Union in 1991 and after peaceful mass protests and an additional round elections during the “Orange Revolution” prevented an attempt to seize power with help of falsification of election results. However, the changes in the state of democracy in independent Ukraine and the application to Ukraine of various factors, which previous studies identified as promoting or hindering democracy, indicate that consolidated liberal democracy or consolidated autocracy are unlikely to take root in Ukraine. Such factors include the economic development level, semi-democratic political values, historical legacies, political institutions, political leadership, civil society, and European Union integration. The effect of Ukrainian diaspora on democracy in Ukraine is a factor that requires further research.

Democracy, political freedom and health expenditures: evidence from Eastern Mediterranean countries

Purpose– Health can be influenced by many factors. One of the factors is the political context of the country and democracy. The purpose of this paper is to examine the effects of freedom in press and polity index in overall, public, private and out of pocket health expenditures.Design/methodology/approach– A long-term panel data approach has been used to examine the relationship between democracy and health expenditures. The authors inserted polity and freedom into press indexes in the health expenditure model.Findings– Increase in freedom of the press and democracy will increase the overall, public and private health expenditures while they decrease out of pocket health expenditures.Originality/value– Polity and freedom index has a significant impact on all the health expenditure models.

Popular vs. elite democratic structures and international peace

Structural theories of international peace among democratic regimes have relied on two distinct explanatory logics: democratic institutions may cause a state’s foreign policy to tend toward peace by exposing policymaking elites to pressure from ordinary citizens (the popular logic) or to pressure from other governmental agencies (the elite logic). These logics are often conflated in scholarly studies of war and peace, but we attempt to isolate the popular logic for empirical testing by developing a novel measure of institutionalized popular influence, the Institutional Democracy Index (IDI). Whereas previous usage of the Polity index to operationalize democratic structures has succeeded in testing the elite logic more than the popular logic, we use the IDI to analyze long-established democracies’ involvement in international conflict between 1961 and 2001. What we find are significant differences within the family of democratic regimes that point to a monadic structural explanation of peace: more popular democracies are less warlike with respect to all other regimes, not just other democracies. By capturing variance among democratic regimes in their structures of inclusion (especially formal rules pertaining to voter access, electoral formulae, and cameral structures), the IDI enables us to observe crucial differences between the conflict propensities of more popular and more elite types of democracy.

The 2011 Protests: Were They about Democracy?

Click to increase image sizeClick to decrease image size Notes 1. Linda Feldmann, “At Last, Obama Addresses Egypt Protests—on YouTube,” The Christian Science Monitor, January 27, 2011, http://www.csmonitor.com/USA/Politics/2011/0127/At-last-Obama-addresses-Egypt-protests-on-YouTube. 2. Monty G. Marshall and Keith Jaggers, “Polity IV Project: Political Regime Characteristics and Transitions, 1800–2011,” (College Park, MD: Center for International Development and Conflict Management, University of Maryland, 2012), http://www.systemicpeace.org/polity/polity4.htm. 3. Monty G. Marshall and Keith Jaggers, “Polity IV Project: Political Regime Characteristics and Transitions, 1800–2011,” (College Park, MD: Center for International Development and Conflict Management, University of Maryland, 2012), http://www.systemicpeace.org/polity/polity4.htm. To calculate these figures, democracy is defined, as is standard, as a 5 or higher on the Polity Index. 4. The word “significant” is a statistical term meaning that the results were not produced by chance. In this paper, I use the word “significant” to refer to any statistical findings where the p-value is .05 or lower, as is standard. This p-value indicates that there is a 5 percent or less chance that the results were produced by chance. The tests used to determine the statistical significance varies based on the data. 5. This statement is based on a Chi-squared test—a statistical non-parametric test used to compare observed data with a hypothetical or established distribution that one would expect to obtain according to a specific hypothesis. In this case, the test was based on the difference in a country's Polity Index score between the years 2010 and 2011, and the difference in a country's Polity Index score between elections held in 2011 and the previous election. 6. Dawn Brancati, “Pocketbook Protests: Explaining the Worldwide Rise of Pro-democracy Protests” (Working Paper, Washington University in St. Louis, St. Louis, Missouri, July 2012). In this paper, I test my argument regarding the economy over a larger time period, 2006–2011, using logistic regression models in which I estimate the size of the effect of the economy (using multiple economic indicators) on the rise of pro-democracy protests in countries, while simultaneously controlling for multiple factors influencing the protests. 7. “Egypt Unrest: NGO Offices Raided in Cairo,” BBC News Mideast, December 29, 2011, http://www.bbc.co.uk/news/world-middle-east-16357795. 8. David M. Herszenhorn and Ellen Barry, “Putin Contends Clinton Incited Unrest Over Vote,” New York Times, December 8, 2011, http://www.nytimes.com/2011/12/09/world/europe/putin-accuses-clinton-of-instigating-russian-protests.html. 9. ForeignAssistance.gov, Foreign Assistance Data, http://www.foreignassistance.gov/DataView.aspx. The difference is statistically significant according to the Chi-Squared Test. 10. “NGO Law Monitor: Egypt” The International Center for Not-for-Profit Law, October 19, 2012, http://www.icnl.org/research/monitor/egypt.html. 11. Human Rights Watch, 17, no. 8(E), “Egypt: Margins of Repression: State Limits on Nongovernmental Organization Activism,” July 4, 2005, www.hrw.org/reports/2005/egypt0705/egypt0705.pdf. 12. “NGO Law Monitor: Russia” The International Center for Not-for-Profit Law, November 2, 2012, http://www.icnl.org/research/monitor/russia.html#ftn1. 13. Calculated by author using Gallup data. 14. Brancati, “Pocketbook Protests.” 15. “Facebook Becomes Divisive in Bahrain” Voice of America News, August 16, 2011, http://www.voanews.com/content/facebook-becomes-divisive-in-bahrain-127958073/143943.html. 16. “Egyptian Public Opinion Survey,” The International Republican Institute, April 14-27, 2011, http://www.iri.org/sites/default/files/2011%20June%205%20Survey%20of%20Egyptian%20Public%20Opinion,%20April%2014-27,%202011_0.pdf. 17. World Economic Outlook Database, April 2012, http://www.imf.org/external/pubs/ft/weo/2012/01/weodata/index.aspx. A t-test is a statistical test used to determine if two samples have the same mean that assumes that the data are drawn from a normal distribution. 18. International Labour Office, Global Employment Trends 2012, (Geneva: 2012), http://www.ilo.org/global/research/global-reports/global-employment-trends/lang--en/index.htm. 19. Masood Ahmed, Dominique Guillaume, and Davide Furceri, “Youth Unemployment in the MENA Region: Determinants and Challenges,” in Addressing the 100 Million Youth Challenge—Perspectives on Youth Employment in the Arab World in 2012, World Economic Forum, International Monetary Fund, June 2012, http://www.imf.org/external/np/vc/2012/061312.htm. 20. In a bivariate logitistic regression model where “pro-democracy protests” is the dependent variable and “dissatisfaction with one's standard of living” is the independent variable, dissatisfaction with one's standard of living significantly increases the likelihood of protests occurring after elections take place in 2011 at the 0.01 level. 21. Calculated by the author using data at http://worldview.gallup.com. 22. Brancati, “Pocketbook Protests.” 23. Pew Research Center, “Prosperity Tops Political Reform: Russia's Weakened Democratic Embrace,'' January 5, 2006, http://www.pewglobal.org/2006/01/05/russias-weakened-democratic-embrace/. 24. Yun-han Chu and others, How East Asians View Democracy, (New York: Columbia University Press, 2008); Latinobar—metero, “Latinobar—metero Report 2009,” Santiago, Chile, 2009, http://www.latinobarometro.org/latino/LATContenidos.jsp. 25. ASDA'A Burson-Marsteller, “Arab Youth Survey 2012,” Dubai, UAE. http://www.arabyouthsurvey.com/english/press_release.php (click on “white paper”) 26. “Egyptian Public Opinion Survey,” The International Republican Institute. 27. “The new middle classes rise up: Marx's revolutionary bourgeoisie finds its voice again,” The Economist, September 3, 2011, http://www.economist.com/node/21528212. 28. Richard Shediac, Samer Bohsali, and Hatem Samman, “The Bedrock of Society: Understanding and Growing the MENA Region's Middle Class,” Booz&Co, Sydney, Australia, 2012. http://www.booz.com/me/home/press_media/management_consulting_press_releases/article/50815585. Additional informationNotes on contributorsDawn BrancatiDawn Brancati is Assistant Professor of Political Science at Washington University in St. Louis

Problems in paradise? Challenges to future democratization in democratic states

What are the challenges to future democratization in states regarded as democratic? This study shows that some states that are traditionally regarded as democratic consist of political institutions in need of further democratization. On average, states that are classified as democratic have one or two institutional dimensions in need of further democratization. The main institutional dimensions in need of democratization are functions of government, rule of law, personal autonomy and individual rights. In order to investigate challenges to future democratization, the study presents a methodology that uses Freedom House Index and Polity Index in a new innovative way.

More Oil, Less Democracy: Evidence from Worldwide Crude Oil Discoveries

This paper exploits variations in the timing and size of oil discoveries to identify the impact of oil wealth on democracy. I use a unique dataset from the Association for the Study of Peak Oil and Gas and other sources describing worldwide oil endowment, exploration, discoveries, and oilfield geology. Using oil discovery as a quasi-experiment, I find that discovering oil decreases a country's 30-year change in democracy, as measured by the Polity Index. On average, discovering 100 billion barrels pushes a country's democracy level almost 20 percentage points below trend. The estimated effect per barrel is larger for oilfields with higher-quality oil and lower exploration and extraction costs. Excluding large Middle East producers from the sample does not affect these results.

The Effect of Political Regime on Civil War

Research published in the American Political Science Review shows that anocracies—as defined by the middle of the Polity index of political regime—are more susceptible to civil war than are either pure democracies or pure dictatorships. Yet, certain components of the Polity index include a factional category, where political competition is ``intense, hostile, and frequently violent. Extreme factionalism may be manifested in the establishment of rival governments and in civil war'' (Gurr 1989, 12). Not surprisingly, these components exhibit a strong relationship with civil war. When they are removed from the Polity index, however, the original relationship disappears. I conclude that the original finding is not driven by the relationship between political institutions and civil war but rather by a less provocative relationship between political violence and civil war.

Универсальные сравнения с использованием количественных методов анализа (Обзор прецедентов)

After the 1960s – decade which happened to be the peak period of social sciences’ keenness on quantitative methods, – universal comparisons sharply lost in popularity. Yet global researches were not brought to a stop with the end of the boom of the 1960s. The “Freedom House” which has behind it more than half a century of existence, annually works out countries’ ratings by the indices of political rights and civil liberties. The “Transparency International” has elaborated the index of perception of corruption, the “Reporters without Borders” – the Worldwide Press Freedom Index, the “Cato Institute” – the index of economic freedom, A.T.Kearney’s consulting company, in cooperation with the Foreign Policy journal, – the index of globalization, the “Bertelsmann Stiftung” – the Transformation Index, the United Nations Development Program – the human development index, T.R.Gurr and his colleagues – the polity index, T.Vanhanen – the index of democratization, and so on. In the review we are publishing here, brief information about these and some other projects of the kind is presented and their methodology characterized, with its advantages and weaknesses noted.

Defining John Bull: political caricature and national identity in late Georgian England

Contents: Caricature and the British public Caricature and the constitution, c. 1760a 1788 Dissenters, levellers and revolutionaries Britannia, John Bull and national identity The rights of Englishmen Majesty, morality and the monarchy Caricatures and the British polity Index of caricatures Index.