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Elections and economic policy in developing countries

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  • Lisa Chauvet
  • Paul Collier

Abstract

"This paper explores the impact of elections on economic policies and governance in developing countries. We distinguish between a structural effect, which increases accountability, and a cyclical effect which may be disruptive. Since the effects are offsetting, neither can be analysed in isolation. We implement an econometric analysis on more than 80 developing countries using positive changes in the Country Policy and Institutional Assessment of the World Bank and the International Country Risk Guide as signalling improvements in economic policy and governance. We find that both structural and cyclical effects matter. The cyclical effect suggests that mid-term is the best moment for policy change. We investigate the structural effect by comparing different frequencies of elections. Except at the extremes, a higher frequency of elections improves both policy and governance net of any cyclical effect. The important exception to this benign net effect is if the electoral process is badly conducted. Badly conducted elections have no structural efficacy for policy improvement. A reasonable interpretation of our results is that honest elections increase accountability and thereby discipline governments to improve economic policy and governance, but that if candidates can win by fraud this chain is broken." Copyright (c) CEPR, CES, MSH, 2009.

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  • Lisa Chauvet & Paul Collier, 2009. "Elections and economic policy in developing countries," Economic Policy, CEPR;CES;MSH, vol. 24, pages 509-550, July.
  • Handle: RePEc:bla:ecpoli:v:24:y:2009:i::p:509-550
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    Cited by:

    1. Paul Collier & Pedro Vicente, 2012. "Violence, bribery, and fraud: the political economy of elections in Sub-Saharan Africa," Public Choice, Springer, vol. 153(1), pages 117-147, October.
    2. Olivier Sterck, 2015. "Fighting for votes: theory and evidence on the causes of electoral violence," CSAE Working Paper Series 2015-19, Centre for the Study of African Economies, University of Oxford.
    3. Corinne Deléchat & Ejona Fuli & Dafina Glaser & Gustavo Ramirez & Rui Xu, 2015. "Exiting From Fragility in sub-Saharan Africa; The Role of Fiscal Policies and Fiscal Institutions," IMF Working Papers 15/268, International Monetary Fund.
    4. Helene Ehrhart, 2012. "Assessing the relationship between democracy and domestic taxes in developing countries," Economics Bulletin, AccessEcon, pages 551-566.
    5. Smets,Lodewijk & Knack,Stephen, 2015. "World Bank policy lending and the quality of public sector governance," Policy Research Working Paper Series 7267, The World Bank.
    6. Carrère, Céline & de Melo, Jaime, 2009. "The Doha Round and Market Access for LDCs: Scenarios for the EU and US Markets," CEPR Discussion Papers 7313, C.E.P.R. Discussion Papers.
    7. Helene Ehrhart, 2013. "Elections and the structure of taxation in developing countries," Public Choice, Springer, vol. 156(1), pages 195-211, July.
    8. Sylvie Guillaumont-Jeanneney & Ping Hua & Claude Jessua, 1996. "Politique du change et développement des exportations manufacturées en Chine," Revue Économique, Programme National Persée, vol. 47(3), pages 851-860.
    9. Armey, Laura E. & McNab, Robert M., 2012. "Democratization and civil war," MPRA Paper 42460, University Library of Munich, Germany.
    10. Dercon, Stefan & Gutiérrez-Romero, Roxana, 2012. "Triggers and Characteristics of the 2007 Kenyan Electoral Violence," World Development, Elsevier, vol. 40(4), pages 731-744.

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    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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