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Democracy and Reforms

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Author Info
Amin, Mohammad
Djankov, Simeon

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Abstract

We use a sample of 147 countries to investigate the link between democracy and reforms. Democracy may be conducive to reform, because politicians have the incentive to embrace growth-enhancing reforms to win elections. On the other hand, authoritarian regimes do not have to worry as much about public opinion and may undertake reforms that are painful in the short run but bring future prosperity. We test these hypotheses, using data on micro-economic reforms from the World Bank’s Doing Business database. These data do not suffer the endogeneity issues associated with other datasets on changes in economic institutions. The results provide a robust support for the claim that democracy is good for growth-enhancing reforms.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7151.

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Date of creation: Jan 2009
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Handle: RePEc:cpr:ceprdp:7151

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Related research
Keywords: Democracy; Reform; Regulation;

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Find related papers by JEL classification:
K20 - Law and Economics - - Regulation and Business Law - - - General
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
P11 - Economic Systems - - Capitalist Systems - - - Planning, Coordination, and Reform
P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," Harvard Institute of Economic Research Working Papers 1856, Harvard - Institute of Economic Research.
  2. Stulz, Rene M. & Williamson, Rohan, 2003. "Culture, openness, and finance," Journal of Financial Economics, Elsevier, vol. 70(3), pages 313-349, December. [Downloadable!] (restricted)
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  3. Dani Rodrik, 1999. "Democracies Pay Higher Wages," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 707-738, August. [Downloadable!] (restricted)
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  4. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," NBER Working Papers 6849, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December. [Downloadable!] (restricted)
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  6. Dani Rodrik, 1996. "Understanding Economic Policy Reform," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 9-41, March. [Downloadable!] (restricted)
  7. Klapper, Leora & Laeven, Luc & Rajan, Raghuram, 2006. "Entry regulation as a barrier to entrepreneurship," Journal of Financial Economics, Elsevier, vol. 82(3), pages 591-629, December. [Downloadable!] (restricted)
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  1. Amin, Mohammad & Djankov, Simeon, 2009. "Natural Resources and Reforms," CEPR Discussion Papers 7229, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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