The Golden Halo and Political Transitions

Abstract

We propose a new test of Acemoglu and Robinson's model of political transition. We draw upon a hitherto unexplored prediction of the model: a "transfer" to newly established political regimes causes regime instability. We use exogenous variation in such transfers to test the theory. The variations comes from the neighborhood eects which can be considered to be exogenous from the point of view of each country.