Political Economy of Development: Health as a Development Outcome, Micro Evidence, and Heterogeneity of Democracies and Autocracies Masayuki Kudamatsu London School of Economics and Political Science PhD in Economics December 13, 2007 UMI Number: U501707 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U501707 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 <nes £5 K Wl (5;l in > ° ^ Declaration I declare that the work presented in this thesis is my own, except for Chapters 2 and 4, which are co-authored with Professor Timothy Besley. Signature: Date: [^ // 2 A b s tra c t The thesis explores whether and how democratic and autocratic political institutions affect the welfare of people in developing countries. First, we empirically investi­ gate whether democracy improves people’s health, by using time-series country-level aggregate statistics. We find that there is a robust cross-sectional correlation be­ tween democracy and life expectancy at birth. Country fixed effects estimation, on the other hand, does not yield a statistically significant correlation between the two. This empirical approach, however, does not disentangle the effect of democracy from country-level confounding factors. To overcome this, I empirically examine whether democratization has reduced infant mortality in sub-Saharan Africa in the 1990s, by using micro data on child survival. Mother fixed effects estimation shows that mothers see their infants more likely to survive after democratization than before. This result may suggest that African dictatorships are particularly bad compared to those in other regions. To shed some light on this possibility, we theoretically investigate under what condition autocracy yields good policy outcomes. We show that such a condition is that those enfranchised in autocracy can retain the right of leadership selection after overthrowing a dictator for his bad performance. We also show that such a successful autocracy outperforms a democracy if distributional issues are so important that voters in democracy cannot discipline policy-makers in the general interest policy outcomes. What affects the salience of distributional issues, therefore, needs to be understood. One such factor may be ethnic favoritism by the government, which has rarely been empirically investigated in a systematic way. By using micro data on infant mortality and by exploiting one-time unex­ pected change in the president’s ethnicity in Guinea, I provide evidence on whether the ethnicity of those in power affects infant mortality for each ethnic group under an autocratic rule. Contents 1 Overview 12 2 Health and Democracy 16 2.1 In tro d u ctio n ........................................................................................................ 16 2.2 B ack g ro u n d ........................................................................................................ 17 2.3 E vidence ............................................................................................................... 20 2.4 Concluding Comments .................................................................................... 31 3 Has Democratization Reduced Infant Mortality in Sub-Saharan Africa? Evidence from Micro Data 33 3.1 In tro d u ctio n ........................................................................................................ 33 3.2 Background and Data .................................................................................... 38 3.2.1 Measuring Democracy in A frica ...................................................... 38 3.2.2 Micro Data on Infant M ortality ...................................................... 44 3.2.3 Summary Statistics ............................................................................. 49 3.3 Empirical Analysis ........................................................................................... 51 3.3.1 M e th o d ................................................................................................. 51 3.3.2 Main R e s u lt s ....................................................................................... 56 3.3.3 Robustness Checks ............................................................................. 64 3.3.4 What Type of Democracy M atters? ............................................... 70 3.4 Pathways ........................................................................................................... 76 3.4.1 Maternal Health Care ....................................................................... 76 3.4.2 Breastfeeding and Sanitation ............................................................. 81 3.4.3 Affluence ................................................................................................. 85 4 3.5 Conclusions 87 4 Making Autocracy Work 90 4.1 In tro d u ctio n ...........................................................................................................90 4.2 Background ...........................................................................................................94 4.3 The Model ............................................................................................................ 100 4.3.1 E q u ilib riu m ..............................................................................................103 4.3.2 Repression and Bribery of the Selectorate ..................................... 108 4.3.3 Comparison with Democracy .............................................................110 4.3.4 Discussion .................................................................................................115 4.4 Successful Autocracies? .....................................................................................117 4.4.1 Economically Successful A utocracies ............................................... 119 4.4.2 Autocracies Successful in Human Development .............................. 122 4.4.3 Robustness ..............................................................................................123 4.4.4 Correlates of Successful Autocracies ...................................................132 4.5 Link to the Theory ............................................................................................138 4.5.1 The Selectorate in Successful Autocracies: Some Case Studies 138 4.5.2 Turnover .....................................................................................................146 4.5.3 Death of Leader as a Natural Experiment ..................................... 147 4.5.4 Summary ................................................................................................. 153 4.6 Conclusion .............................................................................................................154 5 Ethnic Favoritism: Micro Evidence from Guinea 156 5.1 In tro d u ctio n ......................................................................................................... 156 5.2 B ack g ro u n d ......................................................................................................... 159 5.2.1 Ethnic Groups in G u in ea .......................................................................160 5.2.2 History of Ethnic R ivalries....................................................................162 5.2.3 Health Care System in Guinea.............................................................167 5.3 Identification Strategy and Data ................................................................. 168 5.3.1 Exogenous Change in President’s Ethnicity? ..................................168 5.3.2 D a t a ........................................................................................................... 170 5 5.3.3 Summary Statistics ............................................................................. 173 5.4 Favoritism at the District Level?...................................................................174 5.5 Favoritism within D istricts? ..........................................................................180 5.6 Conclusion ........................................................................................................... 183 A Data Appendix to Chapter 2 185 A.l Dependent Variables ....................................................................................... 185 A . 2 Democracy Variables ....................................................................................... 186 A.3 Political History Variables .............................................................................190 A.4 Other Controls ................................................................................................. 190 B Data Appendix to Chapter 3 196 B.l Democracy D ata ..............................................................................................196 B.1.1 Years of Democratization ................................................................... 196 B.1.2 Years of First Multiparty Elections ............................................... 199 B.1.3