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Democracy and prosperity in two decades of transition

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  • Thomas Apolte

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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  • Thomas Apolte, 2011. "Democracy and prosperity in two decades of transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 19(4), pages 693-722, October.
  • Handle: RePEc:bla:etrans:v:19:y:2011:i:4:p:693-722
    DOI: j.1468-0351.2011.00418.x
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    Cited by:

    1. Iwasaki, Ichiro & Kumo, Kazuhiro, 2016. "Decline and Growth in Transition Economies: A Meta-Analysis," CEI Working Paper Series 2016-9, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    2. Pasquale Tridico, "undated". "The Enlargement Of The European Union To Eastern Europe: Ten Years After," Working Papers 0011, ASTRIL - Associazione Studi e Ricerche Interdisciplinari sul Lavoro.
    3. Jan Babecky & Tomas Havranek, 2013. "Structural Reforms and Growth in Transition: A Meta-Analysis," William Davidson Institute Working Papers Series wp1057, William Davidson Institute at the University of Michigan.
    4. Jan Babecky & Tomas Havranek, 2013. "Structural Reforms and Economic Growth: A Meta-Analysis," Working Papers 2013/08, Czech National Bank.
    5. Jan Babecky & Tomas Havranek, 2014. "Structural reforms and growth in transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 22(1), pages 13-42, January.
    6. Andreas Freytag & Jac C. Heckelman, 2012. "Has Assistance from USAID been Successful for Democratization? Evidence from the Transition Economies of Eastern Europe and Eurasia," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 168(4), pages 636-657, December.
    7. Jürgen Jerger, 2012. "Zur Akzeptanz politischer und marktwirtschaftlicher Reformen in Osteuropa: Empirische Befunde und Erklärungsansätze," Working Papers 315, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    8. Gründler, Klaus & Krieger, Tommy, 2016. "Democracy and growth: Evidence from a machine learning indicator," European Journal of Political Economy, Elsevier, vol. 45(S), pages 85-107.
    9. Dawid Piatek, 2016. "Institutions and economic growth in transition countries — new experiences and implications from financial crisis 2007–2010 (Part 1)," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 15(4), pages 515-526, December.
    10. Muhammad Ishtiaq & Muhammad Tariq Majeed & Muhammad Sohail, 2016. "Financial Sector, Democracy and Economic Growth: A Panel Data Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 55(4), pages 437-453.
    11. Tridico, Pasquale, 2013. "The stage of development among former communist economies: Social capital, the middle class and democracy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 47-58.

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    More about this item

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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