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Faculty of Economics

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Aidt, T.S., Albornoz, F. and Gassebner, M.

The golden hello and political transitions

Journal of Comparative Economics

Abstract: We analyze the influence of IMF and World Bank programs on political regime transitions. We develop an extended version of Acemoglu and Robinson’s [American Economic Review 91, 2001] model of political transitions to show how the anticipation of new loans from international financial institutions can trigger political transitions which would not otherwise have taken place. We test this unexplored implication of the theory empirically. We find that the anticipation of receiving new loan programs immediately after a political regime transition increases the probability of a transition from autocracy to democracy and reduces the probability of democratic survival.

Keywords: Political transitions, Democracy, Autocracy, IMF, World Bank

JEL Codes: O19, D72, F59, F53

Author links: Toke Aidt  

Publisher's Link: https://www.sciencedirect.com/science/article/pii/S0147596717300276

Open Access Full Text: https://www.repository.cam.ac.uk/handle/1810/276331

Open Data link: https://ars.els-cdn.com/content/image/1-s2.0-S0147596717300276-mmc1.pdf



Cambridge Working Paper in Economics Version of Paper: The Golden Hello and Political Transitions, Toke, A. S., Abornoz, F. and Gassebner, M., (2012)

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