(a) (10 marks) Explain what we observe in the following graph. Is this evidence causal? Figure 3 Democracy and Income, 1990s CAPy BCZ LTU TRNOS BRESALUX ISCHS JPN STP CPV BOL DMPOL BWA PNGIAMAM KOR BENMNG BGR CHL ARG MDG BGD HND PHL BRMEN IND GUY PAN NPL ZA MLI TWN NIC RUS LKA GROM Freedom House Measure of Democracy MWI ZMB CAF PRY TUR MEX SEN PAK LB SYC ATG GNB MOZ JOR GHA FJI Lse COM PER MYS GAB SGP GMB UREEM COG MAR TZA HTI ZWE DJ KWT SLEKHM EGY CIV as TUN 89ANZ ETH OMN AGO IDN ZAR BDI RWA MRT CMR BHR LAO BTN SDNVNNENQ CHN CUB SAU QAT Log GDP per Capita (Penn World Tables) 10 See Appendix Table Al for data definitions and sources. Values are averaged by country from 1990 to 1999. GDP per Capita is in PPP terms. The regression represented by the fitted line vields a coefficient of 0.181 (standard error=0.019). N=147. R*=0.35