This note critically reviews the research on the link between political systems and economic growth. Empirical attempts to capture this patent relationship have been met with mixed success. The authors conclude that the political variables used in these studies, i.e., democracy and political instability, do not adequately reflect the 'investors problem.' They suggest that a political variable that encompasses all kinds of potential discretionary state interventions would be more effective in explaining cross-country differences in economic growth. Copyright 1995 by Kluwer Academic Publishers
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