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Empirical Linkages Between Democracy and Economic Growth

Listed author(s):
  • Helliwell, John F.

Using cross-sectional and pooled data for up to 125 countries over the period from 1960 to 1985, this paper evaluates the two-way linkages between democracy and economic growth. The effects of income on democracy are found to be robust and positive. The effects of several measures of democracy on growth are assessed in a comparative growth framework in which growth of per capita GDP depends negatively on initial income levels, as implied by the convergence hypothesis, and positively on rates of investment in physical and human capital. Adjusting for the simultaneous determination of income and democracy makes the estimated direct effect of democracy on subsequent economic growth negative but insignificant. Allowing for the possible positive indirect effect of democracy on income, flowing through the positive effect of democracy on education and investment, tends to offset the negative direct effect of democracy on economic growth. The general result of the growth analysis is that it is still not possible to identify any systematic net effects of democracy on subsequent economic growth.
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Article provided by Cambridge University Press in its journal British Journal of Political Science.

Volume (Year): 24 (1994)
Issue (Month): 02 (April)
Pages: 225-248

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Handle: RePEc:cup:bjposi:v:24:y:1994:i:02:p:225-248_00
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  2. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
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  4. Baumol, William J & Wolff, Edward N, 1988. "Productivity Growth, Convergence, and Welfare: Reply," American Economic Review, American Economic Association, vol. 78(5), pages 1155-1159, December.
  5. John F. Helliwell & Alan Chung, 1991. "Macroeconomic Convergence: International Transmission of Growth and Technical Progress," NBER Chapters,in: International Economic Transactions: Issues in Measurement and Empirical Research, pages 388-436 National Bureau of Economic Research, Inc.
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  19. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-1085, December.
  20. Weede, Erich, 1983. "The Impact of Democracy on Economic Growth: Some Evidence from Cross-National Analysis," Kyklos, Wiley Blackwell, vol. 36(1), pages 21-39.
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