Advanced Search
MyIDEAS: Login to save this paper or follow this series

Democratization, Quality of Institutions and Economic Growth

Contents:

Author Info

  • Polterovich, Victor
  • Popov, Vladimir

Abstract

There are two innovations in the paper as compared to the previous literature on democracy and growth. First, we consider not only the level of democracy, but also changes in this level in the 1970s-1990s as measured by increments of Freedom House political rights indices. Second, the distinction is made between democracy and law and order (order based on legal rules); the latter is measured by the rule of law, investors' risk and corruption indices. We discuss two interconnected threshold hypotheses: (1) in countries where law and order is strong enough, democratization stimulates economic growth, whereas in countries with poor law and order democratization undermines growth; (2) if democratization occurs under the conditions of poor law and order (so that illiberal democracy emerges), then shadow economy expands, quality of governance worsens, and macroeconomic policy becomes less prudent. We adduce a number of stylized facts to support our hypotheses. However our econometric findings are mixed: we report results that support the hypotheses as well as regressions that contradict them.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://mpra.ub.uni-muenchen.de/19152/
File Function: original version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 19152.

as in new window
Length:
Date of creation: 2007
Date of revision:
Handle: RePEc:pra:mprapa:19152

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: Economic growth; democracy; rule of law;

Find related papers by JEL classification:

References

References listed on IDEAS
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.:
as in new window
  1. Acemoglu, Daron & Johnson, Simon & Robinson, James A & Yared, Pierre, 2005. "Income and Democracy," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5273, C.E.P.R. Discussion Papers.
  2. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Governance matters," Policy Research Working Paper Series 2196, The World Bank.
  3. Polterovich, Victor, 2007. "Institutional Trap," MPRA Paper 20595, University Library of Munich, Germany.
  4. Barro, Robert J, 1996. " Democracy and Growth," Journal of Economic Growth, Springer, Springer, vol. 1(1), pages 1-27, March.
  5. Jeffrey D. Sachs, 1989. "Social Conflict and Populist Policies in Latin America," NBER Working Papers 2897, National Bureau of Economic Research, Inc.
  6. Akhmed Akhmedov & Ekaterina Zhuravskaya, 2004. "Opportunistic Political Cycles: Test in A Young Democracy Setting," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 119(4), pages 1301-1338, November.
  7. Nauro F. Campos, 1999. "Back to the Future: The Growth Prospects of Transition Economies Reconsidered," CERGE-EI Working Papers wp146, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  8. Fidrmuc, Jan, 2001. "Economic Reform, Democracy and Growth during Post-Communist Transition," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2759, C.E.P.R. Discussion Papers.
  9. Clague, Christopher & Keefer, Philip & Knack, Stephen & Olson, Mancur, 1996. "Property and Contract Rights in Autocracies and Democracies," MPRA Paper 25720, University Library of Munich, Germany.
  10. Clague, Christopher, et al, 1996. " Property and Contract Rights in Autocracies and Democracies," Journal of Economic Growth, Springer, Springer, vol. 1(2), pages 243-76, June.
  11. Robert J. Barro, 1999. "Determinants of Democracy," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 107(S6), pages S158-S183, December.
  12. Dani Rodrik, 1996. "Why Do More Open Economies Have Bigger Governments?," NBER Working Papers 5537, National Bureau of Economic Research, Inc.
  13. Adam Przeworski & Fernando Limongi, 1993. "Political Regimes and Economic Growth," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 7(3), pages 51-69, Summer.
  14. Michael D. Intriligator, 1998. "Democracy In Reforming Collapsed Communist Economies: Blessing Or Curse?," Contemporary Economic Policy, Western Economic Association International, vol. 16(2), pages 241-246, 04.
  15. Nelson, Michael A & Singh, Ram D, 1998. "Democracy, Economic Freedom, Fiscal Policy, and Growth in LDCs: A Fresh Look," Economic Development and Cultural Change, University of Chicago Press, vol. 46(4), pages 677-96, July.
  16. Daron Acemoglu & Simon Johnson & James Robinson, 2004. "Institutions as the Fundamental Cause of Long-Run Growth," NBER Working Papers 10481, National Bureau of Economic Research, Inc.
  17. Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, American Economic Association, vol. 81(5), pages 1146-55, December.
  18. Mark Gradstein & Branko Milanovic, 2000. "Does Liberté = Egalité? A Survey of the Empirical Evidence on the Links between Political Democracy and Income Inequality," CESifo Working Paper Series 261, CESifo Group Munich.
  19. Vladimir Popov, 2000. "Shock Therapy Versus Gradualism: The End Of The Debate (Explaining The Magnitude Of Transformational Recession)," Comparative Economic Studies, Palgrave Macmillan, vol. 42(1), pages 1-57, April.
  20. Dethier, Jean-Jacques & Ghanem, Hafez & Zoli, Edda, 1999. "Does democracy facilitate the economic transition : an empirical study of Central and Eastern Europe and the Former Soviet Union," Policy Research Working Paper Series 2194, The World Bank.
  21. Aron, Janine, 2000. "Growth and Institutions: A Review of the Evidence," World Bank Research Observer, World Bank Group, World Bank Group, vol. 15(1), pages 99-135, February.
  22. Robert R. Kaufman & Barbara Stallings, 1991. "The Political Economy of Latin American Populism," NBER Chapters, in: The Macroeconomics of Populism in Latin America, pages 15-43 National Bureau of Economic Research, Inc.
  23. Alesina, Alberto & Rodrik, Dani, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 109(2), pages 465-90, May.
  24. Vladimir Popov, 2006. "Shock Therapy Versus Gradualism Reconsidered: Lessons From Transition Economies After 15 Years Of Reforms," Working Papers w0068, Center for Economic and Financial Research (CEFIR).
  25. Polterovich, Victor & Popov, Vladimir & Tonis, Alexander, 2007. "Resource Abundance, Political Corruption, and Instability of Democracy," MPRA Paper 19154, University Library of Munich, Germany.
  26. repec:fth:eeccou:146 is not listed on IDEAS
  27. Ellman, Michael, 2000. "The 1947 Soviet Famine and the Entitlement Approach to Famines," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 24(5), pages 603-30, September.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Vladimir Popov, 2009. "Why the West Became Rich before China and Why China Has Been Catching Up with the West since 1949: nother Explanation of the “Great Divergence” and “Great Convergence” Stories," Working Papers w0132, Center for Economic and Financial Research (CEFIR).
  2. Subhani, Muhammad Imtiaz & Osman, Ms. Amber & Lakhiya, Zubair, 2011. "The Structure and Performance of Economy of Pakistan (Comparative Study between Democratic and Non-Democratic Governments)," MPRA Paper 34732, University Library of Munich, Germany, revised 2011.
  3. Polterovich, Victor & Popov, Vladimir & Tonis, Alexander, 2009. "Концентрация Доходов, Нестабильность Демократии И Экономический Рост
    [Income Concentration, Instability of Democracy and the Economic Gr
    ," MPRA Paper 27561, University Library of Munich, Germany.
  4. Polterovich, Victor & Popov, Vladimir & Tonis, Alexander, 2008. "Mechanisms of Resource Curse, Economic Policy and Growth," MPRA Paper 20570, University Library of Munich, Germany.
  5. Polterovich, Victor & Popov, Vladimir & Tonis, Alexander, 2008. "Нестабильность Демократии В Странах, Богатых Ресурсами
    [Instability of Democracy in Resource Abundant Countries]
    ," MPRA Paper 22840, University Library of Munich, Germany.
  6. Alexander Libman, 2012. "Sub-national political regimes and asymmetric fiscal decentralization," Constitutional Political Economy, Springer, Springer, vol. 23(4), pages 302-336, December.
  7. Polterovich, Victor & Popov, Vladimir & Tonis, Alexander, 2007. "Resource Abundance, Political Corruption, and Instability of Democracy," MPRA Paper 19154, University Library of Munich, Germany.
  8. Popov, Vladimir, 2010. "The Long Road to Normalcy," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).
  9. Alexander Libman, 2012. "Democracy and Growth: Is The Effect Non-Linear?," Economic Research Guardian, Weissberg Publishing, Weissberg Publishing, vol. 2(1), pages 99-120, May.
  10. Popov, Vladimir, 2009. "Lessons from the Transition Economies: Putting the Success Stories of the Postcommunist World into a Broader Perspective," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  11. Polterovich, Victor & Popov, Vladimir & Tonis, Alexander, 2009. "Instability of Democracy as Resource Curse," MPRA Paper 22069, University Library of Munich, Germany.
  12. Vladimir Popov, 2010. "Development theories and development experience: half a century journey," Working Papers w0153, Center for Economic and Financial Research (CEFIR).
  13. Polterovich, V., 2013. "General Social Analysis and Reform Design," Journal of the New Economic Association, New Economic Association, New Economic Association, vol. 17(1), pages 185-188.
  14. Popov, Vladimir, 2011. "Developing new measurements of State institutional capacity," MPRA Paper 32389, University Library of Munich, Germany.
  15. Alexander Libman, 2012. "Democracy, size of bureaucracy, and economic growth: evidence from Russian regions," Empirical Economics, Springer, Springer, vol. 43(3), pages 1321-1352, December.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:19152. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.