Nicolaas Groenewold () (Department of Economics, The University of Western Australia) Sam Hak Kan Tang () (Department of Economics, The University of Western Australia)
Abstract
This paper examines how the rule of law and democratic accountability have affected Hong Kong’s GDP growth rate in the past 20 years. We find that democratic accountability has deteriorated substantially since the changeover of sovereignty in 1997, while the rule of law has remained strong and stable. Empirical results from ARDL bounds tests show a strong positive long-run relationship between growth and democratic accountability, and Granger causality tests reveal that democratic accountability causes the growth rate of GDP in the short run. These conclusions are robust to controlling for the effects of investment and the Asian financial crisis in 1997. Our results suggest that the deterioration in democratic accountability following the handover in 1997 has come at the expense of a considerable decline in economic growth, and controverts popular arguments in Hong Kong that improving democratic accountability will harm economic growth.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
Publisher Info
Paper provided by The University of Western Australia, Department of Economics in its series Economics Discussion / Working Papers with number
05-06.
For technical questions regarding this item, or to correct its listing, contact: (Callum Jones) The email address of this maintainer does not seem to be valid anymore. Please ask Callum Jones to update the entry or send us the correct address..
Find related papers by JEL classification: O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses O49 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other P17 - Economic Systems - - Capitalist Systems - - - Performance and Prospects
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.:
Did you know? You can import bibliographic info in various formats into you bibliographic tool, or just into your word processor. See under "publisher info" on each abstract page.