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Relationship between justice and economic growth: the effects of rule of law and democracy

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  • Buket Aydin
  • Kerem Karabulut

Abstract

This study analyses the effects of justice on economic growth. In this context, the study investigates the impact of justice on per capita income in 43 middle-income countries between 2005–2021 with Parks-Kmenta, Beck-Katz estimators and the extended mean group estimator (AMG). Rule of law and democracy variables are used as justice indicators. National income per capita is used as an indicator of economic growth, and national income, fixed capital investments, fertility rates, public expenditures, education expenditures, life expectancy and openness to internationalization are used as control variables. The findings show that the rule of law has a positive effect on per capita GDP in Albania, Armenia, Ecuador, Jordan, Malaysia, North Macedonia, South Africa, Thailand and El Salvador. Democracy only has a positive effect on GDP per capita in Turkey. The study contributes to the limited literature on the relationship justice and economic grow. It differs from the literature by analysing the effects of the rule of law and democracy both on a country group basis and country-specific effects.

Suggested Citation

  • Buket Aydin & Kerem Karabulut, 2025. "Relationship between justice and economic growth: the effects of rule of law and democracy," Applied Economics, Taylor & Francis Journals, vol. 57(58), pages 9872-9882, December.
    • Handle: RePEc:taf:applec:v:57:y:2025:i:58:p:9872-9882
    DOI: 10.1080/00036846.2024.2424498
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