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Can Democracy Educate a Society?

Author

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  • Gersbach, Hans

    (ETH Zurich)

  • Siemers, Lars

    (University of Siegen)

Abstract

We examine the constitutional design required for democratic societies to overcome poverty traps. Restricting agenda-setting only by ensuring subsistence levels of consumption and applying simple majority voting as decision rule fails to enable a society to overcome poverty because it does not induce capital-enhancing redistribution. We show that a combination of suitable constitutional rules can, however, overcome poverty and induce economic well-being. Besides majority voting, these rules include rotating agenda-setting, agenda repetition and tax protection rules. We highlight the crucial role of democratic institutions for economic development and discuss why the evidence for democracy fostering growth is mixed.

Suggested Citation

  • Gersbach, Hans & Siemers, Lars, 2005. "Can Democracy Educate a Society?," IZA Discussion Papers 1693, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1693
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    References listed on IDEAS

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    Cited by:

    1. Gersbach, Hans & Siemers, Lars-H. R., 2010. "Land Reforms And Economic Development," Macroeconomic Dynamics, Cambridge University Press, vol. 14(4), pages 527-547, September.
    2. Bell, Clive & Gersbach, Hans, 2009. "Child Labor And The Education Of A Society," Macroeconomic Dynamics, Cambridge University Press, vol. 13(2), pages 220-249, April.
    3. Gersbach, Hans & Mühe, Felix, 2011. "Vote-Buying And Growth," Macroeconomic Dynamics, Cambridge University Press, vol. 15(5), pages 656-680, November.

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    More about this item

    Keywords

    constitutional design; institutions; redistribution; poverty traps; tax allowances; voting rules;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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