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Are democratic governments more efficient?

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  • Adam, Antonis
  • Delis, Manthos D
  • Kammas, Pantelis

Abstract

This paper explores the relationship between public sector efficiency (PSE) and the level of democracy, both theoretically and empirically. At the theoretical level a simple model of elections with two time periods is presented, which takes into account whether the political regime is democratic or not. Specifically, we assume that elected officials in democracies are “more” accountable to voters than the respective ones in autocracies. This mechanism induces the democratic politicians to produce the public good in a more efficient way, in order to remain in power. In the empirical section we examine the effect of democracy on PSE for a panel dataset of 50 developing and developed countries over the period 1980-2000. Our results suggest that the relationship between PSE and democracy is positive and statistically significant, thus confirming our theoretical priors.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 15843.

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Date of creation: 08 Mar 2009
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Handle: RePEc:pra:mprapa:15843

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Citations

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Cited by:
  1. Potrafke, Niklas, 2012. "Islam and democracy," Munich Reprints in Economics 19273, University of Munich, Department of Economics.
  2. Rode, Martin & Gwartney, James D., 2012. "Does democratization facilitate economic liberalization?," European Journal of Political Economy, Elsevier, vol. 28(4), pages 607-619.
  3. Hélène Ehrhart, 2011. "Assessing the relationship between democracy and domestic taxes in developing countries," Working Papers halshs-00553607, HAL.
  4. Arusha Cooray & Niklas Potrafke, 2010. "Gender inequality in education: Political institutions or culture and religion?," Working Paper Series of the Department of Economics, University of Konstanz 2010-01, Department of Economics, University of Konstanz.
  5. Fumagalli, Elena & Mentzakis, Emmanouil & Suhrcke, Marc, 2013. "Do political factors matter in explaining under- and overweight outcomes in developing countries?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 46(C), pages 48-56.
  6. Meinhard, S. & Potrafke, Niklas, 2012. "The Globalization-Welfare State Nexus Reconsidered," Munich Reprints in Economics 19212, University of Munich, Department of Economics.

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