Awakening Leviathan: The Effect of Democracy on State Capacity, 1960-2009

39 Pages Posted: 6 Jul 2015 Last revised: 17 Apr 2017

See all articles by Erik Wang

Erik Wang

Princeton University, Department of Politics, Students

Yiqing Xu

Stanford University

Date Written: April 17, 2017


Recent debates over the relative importance of democracy and state capacity for human development have led to the prevailing view that a strong state must be built before the introduction of democracy. Our research challenges this ``sequencing approach'' in international development. Using a global panel of countries over 50 years, we document that democracy has a substantial, positive causal effect on state capacity with identification strategies that adjust for pre-treatment dynamics. The state-enhancing effect of democracy is robust to alternative measures of key variables, a large set of time-varying confounders and an instrumental variable design that leverages variation in regional democratic diffusions. Subsequent analysis suggests contestation, rather than participation, as a potential causal mechanism. Our findings contribute to the burgeoning literature on sources of state capacity in the developing world and yield practical implications for democracy assistance.

Keywords: democracy, state capacity, development, democratic diffusion, causal inference, instrument variable, panel data

JEL Classification: O57, P26

Suggested Citation

Wang, Erik and Xu, Yiqing, Awakening Leviathan: The Effect of Democracy on State Capacity, 1960-2009 (April 17, 2017). Available at SSRN: or

Erik Wang (Contact Author)

Princeton University, Department of Politics, Students ( email )

Princeton, NJ
United States

Yiqing Xu

Stanford University ( email )

Stanford, CA 94305
United States


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