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Democracy and growth: An alternative empirical approach

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Author Info
Jian-Guang Shen (Bank of Finland, Institute for Economies in Transition, BOFIT)
Abstract

This paper proposes a “before-and-after” approach to empirical examination of the relationship between democracy and growth. Rather than the commonly used cross-country regression method, this paper compares the economic performances of forty countries before and after they became democracies or semi-democracies sometime within the last forty years. The empirical evidence indicates that an improvement in growth performance typically follows the transformation to democracy. Moreover, growth under democracy appears to be more stable than under authoritarian regimes. Interestingly, wealthy countries often experience declines in growth after a democratic transformation, while very poor nations typically experience accelerations in growth. Growth change appears to be negatively related to the initial savings ratio and positively related to the export ratio to GDP. Partial correlation between growth change and primary school or secondary school enrollments and the ratio of government expenditure to GDP is not identified.

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Paper provided by EconWPA in its series Development and Comp Systems with number 0212002.

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Length: 32 pages
Date of creation: 13 Dec 2002
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Handle: RePEc:wpa:wuwpdc:0212002

Note: Type of Document - pdf; prepared on IBM PC ; pages: 32 ; figures: included
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Related research
Keywords: Democracy economic growth O40 O57

Find related papers by JEL classification:
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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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.:
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  15. Minier, Jenny A, 1998. " Democracy and Growth: Alternative Approaches," Journal of Economic Growth, Springer, vol. 3(3), pages 241-66, September. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Ana Margarida Oliveira Brochado & Francisco Vitorino Martins, 2005. "Democracy and Economic Development: a Fuzzy Classification Approach," FEP Working Papers 180, Universidade do Porto, Faculdade de Economia do Porto. [Downloadable!]
  2. Branko Milanovic, 2005. "The Modern World: The effect of democracy, colonialism and war on economic growth 1820-2000," Development and Comp Systems 0509002, EconWPA. [Downloadable!]
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