IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/7151.html
   My bibliography  Save this paper

Democracy and Reforms

Author

Listed:
  • Djankov, Simeon
  • Amin, Mohammad

Abstract

We use a sample of 147 countries to investigate the link between democracy and reforms. Democracy may be conducive to reform, because politicians have the incentive to embrace growth-enhancing reforms to win elections. On the other hand, authoritarian regimes do not have to worry as much about public opinion and may undertake reforms that are painful in the short run but bring future prosperity. We test these hypotheses, using data on micro-economic reforms from the World Bank?s Doing Business database. These data do not suffer the endogeneity issues associated with other datasets on changes in economic institutions. The results provide a robust support for the claim that democracy is good for growth-enhancing reforms.

Suggested Citation

  • Djankov, Simeon & Amin, Mohammad, 2009. "Democracy and Reforms," CEPR Discussion Papers 7151, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:7151
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP7151
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2002. "The Regulation of Entry," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 1-37.
    2. Levon Barseghyan, 2008. "Entry costs and cross-country differences in productivity and output," Journal of Economic Growth, Springer, vol. 13(2), pages 145-167, June.
    3. Dani Rodrik, 1999. "Democracies Pay Higher Wages," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 707-738.
    4. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, December.
    5. Djankov, Simeon & McLiesh, Caralee & Shleifer, Andrei, 2007. "Private credit in 129 countries," Journal of Financial Economics, Elsevier, vol. 84(2), pages 299-329, May.
    6. Juan C. Botero & Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "The Regulation of Labor," The Quarterly Journal of Economics, Oxford University Press, vol. 119(4), pages 1339-1382.
    7. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(1), pages 222-279, April.
    8. Stulz, Rene M. & Williamson, Rohan, 2003. "Culture, openness, and finance," Journal of Financial Economics, Elsevier, vol. 70(3), pages 313-349, December.
    9. Klapper, Leora & Laeven, Luc & Rajan, Raghuram, 2006. "Entry regulation as a barrier to entrepreneurship," Journal of Financial Economics, Elsevier, vol. 82(3), pages 591-629, December.
    10. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, September.
    11. Dani Rodrik, 1996. "Understanding Economic Policy Reform," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 9-41, March.
    12. Djankov, Simeon & La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei, 2008. "The law and economics of self-dealing," Journal of Financial Economics, Elsevier, vol. 88(3), pages 430-465, June.
    13. Gallup, John L. & Sachs, Jeffrey D. & Mellinger, Andrew, "undated". "Geography and Economic Development," Instructional Stata datasets for econometrics geodata, Boston College Department of Economics.
    14. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    15. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," NBER Working Papers 6849, National Bureau of Economic Research, Inc.
    16. Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, vol. 81(5), pages 1146-1155, December.
    17. La Porta, Rafael & Lopez-de-Silanes, Florencio & Vishny, Robert & Shleifer, Andrei, 1999. "The quality of government," Scholarly Articles 30747160, Harvard University Department of Economics.
    18. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," Harvard Institute of Economic Research Working Papers 1856, Harvard - Institute of Economic Research.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. EZZAT Riham Ahmed, 2015. "Paving the Way for Better Telecom Performance: Evidence from the Telecommunication Sector in MENA Countries," Review of Network Economics, De Gruyter, vol. 14(3), pages 157-199, September.
    2. Amin, Mohammad & Djankov, Simeon, 2009. "Natural resources and reforms," Policy Research Working Paper Series 4882, The World Bank.
    3. Leone Leonida & Dario Maimone Ansaldo Patti & Pietro Navarra, 2013. "Testing the Political Replacement Effect: A Panel Data Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(6), pages 785-805, December.
    4. Riham Ahmed Ezzat, 2015. "Paving the way for better telecom performance: Evidence from the telecommunication sector in MENA countries," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01164199, HAL.
    5. Carmen Vargas Pérez & Juan Luis Peñaloza Figueroa, 2017. "Big Data and the Demand for Court and Legal Services," European Journal of Interdisciplinary Studies Articles, Revistia Research and Publishing, vol. 3, September.
    6. Mawussé K. N. Okey, 2011. "Institutional Reforms, Private Sector, and Economic Growth in Africa," WIDER Working Paper Series 040, World Institute for Development Economic Research (UNU-WIDER).
    7. Riham Ahmed Ezzat, 2015. "Paving the way for better telecom performance: Evidence from the telecommunication sector in MENA countries," Post-Print halshs-01164199, HAL.
    8. Alexander Salhi & Andreas Kern & Martin Rößler, 2010. "Growth Patterns in the CIS-8: A Political Economy Approach," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 17(4), pages 686-708, December.
    9. Mawussé K. N. Okey, 2011. "Institutional Reforms, Private Sector, and Economic Growth in Africa," WIDER Working Paper Series wp-2011-040, World Institute for Development Economic Research (UNU-WIDER).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Amin, Mohammad & Djankov, Simeon, 2014. "Democratic institutions and regulatory reforms," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 839-854.
    2. Amin, Mohammad & Djankov, Simeon, 2009. "Natural resources and reforms," Policy Research Working Paper Series 4882, The World Bank.
    3. Beck, T.H.L., 2010. "Legal Institutions and Economic Development," Other publications TiSEM 8aa07b48-ce55-4cf6-8754-7, Tilburg University, School of Economics and Management.
    4. Andrei Shleifer & Florencio Lopez-de-Silanes & Rafael La Porta, 2008. "The Economic Consequences of Legal Origins," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 285-332, June.
    5. Emenalo, Chukwunonye O. & Gagliardi, Francesca, 2020. "Is current institutional quality linked to legal origins and disease endowments? Evidence from Africa," Research in International Business and Finance, Elsevier, vol. 52(C).
    6. Michael Breen & Robert Gillanders, 2012. "Corruption, institutions and regulation," Economics of Governance, Springer, vol. 13(3), pages 263-285, September.
    7. Thorsten Beck, 2003. "Small and medium enterprises, growth, and poverty : cross-country evidence," Policy Research Working Paper Series 3178, The World Bank.
    8. Buchen, Clemens, 2010. "Emerging economic systems in Central and Eastern Europe – a qualitative and quantitative assessment," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 37141, February.
    9. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 2003. "Law, endowments, and finance," Journal of Financial Economics, Elsevier, vol. 70(2), pages 137-181, November.
    10. Davis, Lewis S. & Williamson, Claudia R., 2016. "Culture and the regulation of entry," Journal of Comparative Economics, Elsevier, vol. 44(4), pages 1055-1083.
    11. Raphael A. Auer, 2013. "Geography, institutions, and the making of comparative development," Journal of Economic Growth, Springer, vol. 18(2), pages 179-215, June.
    12. Ann-Sofie Isaksson, 2011. "Social divisions and institutions: assessing institutional parameter variation," Public Choice, Springer, vol. 147(3), pages 331-357, June.
    13. Lubna Hasan, 2007. "Myths and Realities of Long-run Development: A Look at Deeper Determinants," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 46(1), pages 19-44.
    14. Alali, Walid Y., 2010. "Impact of Institutions and Policy on Economic Growth: Empirical Evidence," EconStor Preprints 269878, ZBW - Leibniz Information Centre for Economics.
    15. Alali, Walid Y., 2010. "Impact of Institutions and Policy on Economic Growth: Empirical Evidence," MPRA Paper 115610, University Library of Munich, Germany.
    16. Thorsten Beck & Asli Demirgüç-Kunt, 2004. "SMEs, Growth, and Poverty," World Bank Publications - Reports 11278, The World Bank Group.
    17. Cline, Brandon N. & Williamson, Claudia R., 2016. "Trust and the regulation of corporate self-dealing," Journal of Corporate Finance, Elsevier, vol. 41(C), pages 572-590.
    18. Mohammad Amin & Priya Ranjan, 2008. "When Does Legal Origin Matter?," Working Papers 080912, University of California-Irvine, Department of Economics.
    19. Manuel Oechslin, 2009. "Creditor protection and the dynamics of the distribution in oligarchic societies," Journal of Economic Growth, Springer, vol. 14(4), pages 313-344, December.
    20. Chauffour, Jean-Pierre, 2011. "On the relevance of freedom and entitlement in development : new empirical evidence (1975-2007)," Policy Research Working Paper Series 5660, The World Bank.

    More about this item

    Keywords

    Democracy; Reform; Regulation;
    All these keywords.

    JEL classification:

    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • P11 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Planning, Coordination, and Reform
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:7151. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.