Democratization, Violent Social Conflicts, and Growth
AbstractThis paper investigates the empirical role of violent conflicts for the causal effect of democracy on economic growth. Exploiting within-country variation to identify the effect of democratization during the “Third Wave”, we find evidence that the effect of democratization is weaker than reported previously once one accounts for the incidence of conflict, while the incidence of conflict itself significantly reduces growth. The results show in turn that permanent democratic transitions significantly reduce the incidence and onset of conflict, which suggests that part of the positive growth effect of democratization arises because democratization reduces conflict incidence. When accounting for the role of violence during democratization, we find evidence that peaceful transitions to democracy have a significant positive effect on growth that is even larger than reported in the previous literature, while violent transitions to democracy have no, or even negative, effects on economic growth.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5643.
Length: 30 pages
Date of creation: Apr 2011
Date of revision:
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Other versions of this item:
- Matteo Cervellati & Sunde, Uwe, 2011. "Democratization, Violent Social Conflicts, and Growth," Economics Working Paper Series 1114, University of St. Gallen, School of Economics and Political Science.
- O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
- N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
- N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-23 (All new papers)
- NEP-DEV-2011-04-23 (Development)
- NEP-FDG-2011-04-23 (Financial Development & Growth)
- NEP-POL-2011-04-23 (Positive Political Economics)
- NEP-SOC-2011-04-23 (Social Norms & Social Capital)
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