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Are democratic governments more efficient?

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  • Adam, Antonis
  • Delis, Manthos D.
  • Kammas, Pantelis

Abstract

This paper explores the relationship between public sector efficiency (PSE) and the level of democracy, both theoretically and empirically. At the theoretical level a simple model of elections with two time periods is presented, which takes into account whether the political regime is democratic or not. Specifically, we assume that elected officials in democracies are "more" accountable to voters than the respective ones in autocracies. This mechanism induces the democratic politicians to produce the public good in a more efficient way, in order to remain in power. In the empirical section we examine the effect of democracy on PSE for a panel dataset of 50 developing and developed countries over the period 1980-2000. Our results suggest that the relationship between PSE and democracy is positive and statistically significant, thus confirming our theoretical priors.

Suggested Citation

  • Adam, Antonis & Delis, Manthos D. & Kammas, Pantelis, 2011. "Are democratic governments more efficient?," European Journal of Political Economy, Elsevier, vol. 27(1), pages 75-86, March.
  • Handle: RePEc:eee:poleco:v:27:y:2011:i:1:p:75-86
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    1. Rode, Martin & Gwartney, James D., 2012. "Does democratization facilitate economic liberalization?," European Journal of Political Economy, Elsevier, vol. 28(4), pages 607-619.
    2. repec:eee:poleco:v:48:y:2017:i:c:p:128-143 is not listed on IDEAS
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    4. Fumagalli, Elena & Mentzakis, Emmanouil & Suhrcke, Marc, 2013. "Do political factors matter in explaining under- and overweight outcomes in developing countries?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 46(C), pages 48-56.
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    6. Michael Berlemann & Kai Hielscher, 2016. "Measuring Effective Monetary Policy Conservatism of Central Banks: A Dynamic Approach," Annals of Economics and Finance, Society for AEF, vol. 17(1), pages 105-132, May.
    7. Niklas Potrafke, 2012. "Islam and democracy," Public Choice, Springer, vol. 151(1), pages 185-192, April.
    8. Asatryan, Zareh & Heinemann, Friedrich & Pitlik, Hans, 2017. "Reforming the public administration: The role of crisis and the power of bureaucracy," European Journal of Political Economy, Elsevier, vol. 48(C), pages 128-143.
    9. Cooray, Arusha & Potrafke, Niklas, 2011. "Gender inequality in education: Political institutions or culture and religion?," European Journal of Political Economy, Elsevier, vol. 27(2), pages 268-280, June.
    10. Helene Ehrhart, 2012. "Assessing the relationship between democracy and domestic taxes in developing countries," Economics Bulletin, AccessEcon, vol. 32(1), pages 551-566.
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    12. Dorsch, Michael T. & Maarek, Paul, 2015. "Inefficient predation and political transitions," European Journal of Political Economy, Elsevier, vol. 37(C), pages 37-48.
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    More about this item

    Keywords

    Democracy Public sector efficiency;

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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