Does diversification of an economy improve the chances of democracy? In theory, diversification may reduce elite cohesion and improve citizen outside options, making democracy more likely. This paper estimates the effect of export diversification on democracy, using data from 143 countries. We use variability within countries in fertile soil as an instrument for diversification, controlling for country size. To address the possibility that current fertile soil variability may have been influenced by historical country characteristics which could also have affected democracy today, we control for historical changes in land cover. We identify a statistically significant, positive effect of diversification on democracy.
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