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Testing the Political Replacement Effect: A Panel Data Analysis *
Author(s) -
Leonida Leone,
Patti Dario Maimone Ansaldo,
Navarra Pietro
Publication year - 2013
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/j.1468-0084.2012.00716.x
Subject(s) - politics , economics , competition (biology) , panel data , monotonic function , test (biology) , power (physics) , panel survey , public economics , microeconomics , econometrics , political science , demographic economics , mathematics , law , ecology , mathematical analysis , biology , paleontology , physics , quantum mechanics
Abstract This article tests for the existence of the political replacement effect, as suggested by Acemoglu and Robinson: [ American Political Science Review , Vol. 100, pp. 115–131]. They argue that the implementation of market‐oriented reform is crucially driven by the political calculus of incumbent governments: they implement economic policy change if such a choice is not expected to reduce their chances to retain power. This implies a non‐monotonic relationship between the level of political competition and the extent of economic reform. We test this hypothesis using data for 102 countries over the period 1980 to 2005. Our results strongly support the theory.