IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Are democratic governments more efficient?

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

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.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/B6V97-4YY8MTN-1/2/e3dee9c9bf9db77f7bb578012ecd7a54
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 27 (2011)
Issue (Month): 1 (March)
Pages: 75-86

as
in new window

Handle: RePEc:eee:poleco:v:27:y:2011:i:1:p:75-86
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505544

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Daron Acemoglu & Davide Ticchi & Andrea Vindigni, 2011. "Emergence And Persistence Of Inefficient States," Journal of the European Economic Association, European Economic Association, vol. 9(2), pages 177-208, 04.
  2. Cuberes, David, 2008. "Democracy, Diversification, and Growth Reversals," MPRA Paper 8430, University Library of Munich, Germany.
  3. Torsten Persson & Guido Tabellini & Francesco Trebbi, 2003. "Electoral Rules and Corruption," Journal of the European Economic Association, MIT Press, vol. 1(4), pages 958-989, 06.
  4. Afonso, António & Schuknecht, Ludger & Tanzi, Vito, 2003. "Public sector efficiency: an international comparison," Working Paper Series 0242, European Central Bank.
  5. John F. Helliwell, 1992. "Empirical Linkages Between Democracy and Economic Growth," NBER Working Papers 4066, National Bureau of Economic Research, Inc.
  6. Chan, Kenneth S, 2002. "Trade and Bureaucratic Efficiency," Economic Development and Cultural Change, University of Chicago Press, vol. 50(3), pages 735-54, April.
  7. Besley, Timothy J. & Prat, Andrea, 2002. "Handcuffs for the Grabbing Hand? Media Capture and Government Accountability," CEPR Discussion Papers 3132, C.E.P.R. Discussion Papers.
  8. Przeworski, Adam & Vreeland, James Raymond, 2000. "The effect of IMF programs on economic growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 385-421, August.
  9. Paldam, Martin, 2003. "Economic freedom and the success of the Asian tigers: an essay on controversy," European Journal of Political Economy, Elsevier, vol. 19(3), pages 453-477, September.
  10. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492 National Bureau of Economic Research, Inc.
  11. Myerson Roger B., 1993. "Effectiveness of Electoral Systems for Reducing Government Corruption: A Game-Theoretic Analysis," Games and Economic Behavior, Elsevier, vol. 5(1), pages 118-132, January.
  12. Robert J. Barro, 1999. "Determinants of Democracy," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S158-S183, December.
  13. Casey B. Mulligan & Ricard Gil & Xavier Sala-i-Martin, 2004. "Do Democracies Have Different Public Policies than Nondemocracies?," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 51-74, Winter.
  14. Eric A. Hanushek & Ludger Woessmann, 2009. "Do Better Schools Lead to More Growth? Cognitive Skills, Economic Outcomes, and Causation," NBER Working Papers 14633, National Bureau of Economic Research, Inc.
  15. Persson, Torsten & Tabellini, Guido, 1999. "The Size and Scope of Government: Comparative Politics With Rational Politicians," CEPR Discussion Papers 2051, C.E.P.R. Discussion Papers.
  16. Masayuki Kudamatsu, 2007. "Has Democratization Reduced Infant Mortality in Sub-Saharan Africa? Evidence from Micro Data," ISER Discussion Paper 0685, Institute of Social and Economic Research, Osaka University.
  17. Cukierman, Alex & Webb, Steven B & Neyapti, Bilin, 1992. "Measuring the Independence of Central Banks and Its Effect on Policy Outcomes," World Bank Economic Review, World Bank Group, vol. 6(3), pages 353-98, September.
  18. Acemoglu, Daron, 2005. "Politics and economics in weak and strong states," Journal of Monetary Economics, Elsevier, vol. 52(7), pages 1199-1226, October.
  19. Konstantinos Angelopoulos & Apostolis Philippopoulos, 2005. "The Role of Government in Anti-Social Redistributive Activities," CESifo Working Paper Series 1427, CESifo Group Munich.
  20. Timothy Besley & Michael Smart, 2005. "Fiscal Restraints and Voter Welfare," STICERD - Political Economy and Public Policy Paper Series 06, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  21. Timothy Besley & Masayuki Kudamatsu, 2006. "Health and Democracy," American Economic Review, American Economic Association, vol. 96(2), pages 313-318, May.
  22. Casey B. Mulligan & Kevin K. Tsui, 2008. "Political Entry, Public Policies, and the Economy," NBER Working Papers 13830, National Bureau of Economic Research, Inc.
  23. Wyckoff, Paul Gary, 1990. " Bureaucracy, Inefficiency, and Time," Public Choice, Springer, vol. 67(2), pages 169-79, November.
  24. Canice Prendergast, 2003. "The Limits of Bureaucratic Efficiency," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 929-958, October.
  25. Afonso, António & Schuknecht, Ludger & Tanzi, Vito, 2006. "Public sector efficiency: evidence for new EU member states and emerging markets," Working Paper Series 0581, European Central Bank.
  26. 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.
  27. Jacques J. Polak, 1991. "The Changing Nature of IMF Conditionality," OECD Development Centre Working Papers 41, OECD Publishing.
  28. Adam, Antonis & Filippaios, Fragkiskos, 2007. "Foreign direct investment and civil liberties: A new perspective," European Journal of Political Economy, Elsevier, vol. 23(4), pages 1038-1052, December.
  29. Persson, Torsten & Roland, Gerard & Tabellini, Guido, 1997. "Separation of Powers and Political Accountability," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1163-1202, November.
  30. Afonso, António & Fernandes, Sónia, 2008. "Assessing and explaining the relative efficiency of local government," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(5), pages 1946-1979, October.
  31. Robert Barro, 1973. "The control of politicians: An economic model," Public Choice, Springer, vol. 14(1), pages 19-42, March.
  32. Robert Deacon, 2009. "Public good provision under dictatorship and democracy," Public Choice, Springer, vol. 139(1), pages 241-262, April.
  33. Antonis Adam, 2009. "Fiscal Reliance on Tariff Revenues: In Search of a Political Economy Explanation?," Review of Development Economics, Wiley Blackwell, vol. 13(4), pages 610-625, November.
  34. repec:cup:cbooks:9780521894753 is not listed on IDEAS
  35. Polak, J.J., 1991. "The Changing Nature of IMF Conditionality," Princeton Studies in International Economics 184, International Economics Section, Departement of Economics Princeton University,.
  36. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
  37. Timothy Besley & Torsten Persson, 2008. "Wars and State Capacity," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 522-530, 04-05.
  38. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
  39. Klomp, Jeroen & de Haan, Jakob, 2009. "Political institutions and economic volatility," European Journal of Political Economy, Elsevier, vol. 25(3), pages 311-326, September.
  40. repec:ner:tilbur:urn:nbn:nl:ui:12-3125517 is not listed on IDEAS
  41. Weede, Erich, 1997. "Income inequality, democracy and growth reconsidered," European Journal of Political Economy, Elsevier, vol. 13(4), pages 751-764, December.
  42. Joseph P. Joyce, 2006. "Promises Made, Promises Broken: A Model Of Imf Program Implementation," Economics and Politics, Wiley Blackwell, vol. 18(3), pages 339-365, November.
  43. de Haan, Jakob & Siermann, Clemens L J, 1995. "A Sensitivity Analysis of the Impact of Democracy on Economic Growth," Empirical Economics, Springer, vol. 20(2), pages 197-215.
  44. Adam Przeworski & Fernando Limongi, 1993. "Political Regimes and Economic Growth," Journal of Economic Perspectives, American Economic Association, vol. 7(3), pages 51-69, Summer.
  45. Mansfield, Edward D. & Milner, Helen V. & Rosendorff, B. Peter, 2002. "Why Democracies Cooperate More: Electoral Control and International Trade Agreements," International Organization, Cambridge University Press, vol. 56(03), pages 477-513, June.
  46. Muhammed N. Islam & Stanley L. Winer, 2004. "Tinpots, Totalitarians (and Democrats): An Empirical Investigation of the Effects of Economic Growth on Civil Liberties and Political Rights," Public Choice, Springer, vol. 118(3_4), pages 289-323, 03.
  47. Dani Rodrik, 2000. "Participatory Politics, Social Cooperation, and Economic Stability," American Economic Review, American Economic Association, vol. 90(2), pages 140-144, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:poleco:v:27:y:2011:i:1:p:75-86. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.