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Democracy and prosperity in two decades of transition

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  • Apolte, Thomas
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    Abstract

    This paper revisits the relation between democracy, liberalization, and prosperity in transition countries, using a panel of 25 countries over 19 years. Earlier investigations found political and economic liberalization to be positively correlated whereas the relation between political liberalization and prosperity remained unclear. In this paper, a hump-shaped relationship between political liberalization and growth is found, such that a rise in democracy levels promotes growth only under initially low democracy levels. Furthermore, economic and political liberalization turn out to be positively related, but with surprisingly small coefficients. --

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    Bibliographic Info

    Paper provided by Center of Applied Economic Research Münster (CAWM), University of Münster in its series CAWM Discussion Papers with number 26.

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    Date of creation: 2010
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    Handle: RePEc:zbw:cawmdp:26

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    Related research

    Keywords: Transition Economics; Public Choice; Democracy; Growth;

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    1. Falcetti, Elisabetta & Lysenko, Tatiana & Sanfey, Peter, 2006. "Reforms and growth in transition: Re-examining the evidence," Journal of Comparative Economics, Elsevier, vol. 34(3), pages 421-445, September.
    2. Rodrik, Dani & Alesina, Alberto, 1994. "Distributive Politics and Economic Growth," Scholarly Articles 4551798, Harvard University Department of Economics.
    3. Martin C. McGuire & Mancur Olson Jr., 1996. "The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 72-96, March.
    4. Timothy Besley & Masayuki Kudamatsu, 2007. "Making Autocracy Work," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 48, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    5. Fidrmuc, Jan, 2001. "Economic Reform, Democracy and Growth during Post-Communist Transition," CEPR Discussion Papers 2759, C.E.P.R. Discussion Papers.
    6. Jenny A. Minier, 2003. "Democrats, Dictators, and Demonstrators," Economic Inquiry, Western Economic Association International, vol. 41(2), pages 224-233, April.
    7. Wintrobe,Ronald, 2000. "The Political Economy of Dictatorship," Cambridge Books, Cambridge University Press, number 9780521794497.
    8. Hans Pitlik, 2007. "A race to liberalization? Diffusion of economic policy reform among OECD-economies," Public Choice, Springer, vol. 132(1), pages 159-178, July.
    9. Berta Heybey & Peter Murrell, 1999. "The relationship between economic growth and the speed of liberalization during transition," Journal of Policy Reform, Taylor and Francis Journals, vol. 3(2), pages 121-137.
    10. Jenny A. Minier, 2001. "Is Democracy a Normal Good? Evidence from Democratic Movements," Southern Economic Journal, Southern Economic Association, vol. 67(4), pages 996-1009, April.
    11. Minier, Jenny A, 1998. " Democracy and Growth: Alternative Approaches," Journal of Economic Growth, Springer, vol. 3(3), pages 241-66, September.
    12. Katarzyna Metelska-Szaniawska, 2009. "Constitutions and economic reforms in transition: an empirical study," Constitutional Political Economy, Springer, vol. 20(1), pages 1-41, March.
    13. 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.
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