Income and Democracy : Revisiting the Evidence ∗

It is well-known in the literature that income per capita is strongly correlated with the level of democracy across countries. In an influential paper, Acemoglu et al. (2008) find that this linear correlation disappears once they control for country-specific effects focusing on within-country variation. In this paper, we find evidence of a non-linear effect from income to democracy even after controlling for country-specific effects. While a positive effect emerges for poor countries, this effect vanishes for rich countries. We conjecture (and provide tentative evidence) that rich countries, in order to maintain the status quo, are less prone to change their institutions than