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Curse of Democracy: Evidence from the 21st Century

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Democracy is widely believed to contribute to economic growth and public health. However, we find that this conventional wisdom is no longer true and even reversed; democracy has persistent negative impacts on GDP growth since the beginning of this century. This finding emerges from five different instrumental variable strategies. Our analysis suggests that democracies cause slower growth through less investment, less trade, and slower value-added growth in manufacturing and services. For 2020, democracy is also found to cause more deaths from Covid-19.

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  • Yusuke Narita & Ayumi Sudo, 2021. "Curse of Democracy: Evidence from the 21st Century," Cowles Foundation Discussion Papers 2281R, Cowles Foundation for Research in Economics, Yale University, revised Aug 2021.
    • Handle: RePEc:cwl:cwldpp:2281r
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    1. Shomak Chakrabarti & Ilia Krasikov & Rohit Lamba, 2022. "Behavioral epidemiology: An economic model to evaluate optimal policy in the midst of a pandemic," Papers 2202.04174, arXiv.org.
    2. Bessho, S., 2023. "Elections and COVID-19 benefit payments," Journal of Asian Economics, Elsevier, vol. 87(C).

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    Keywords

    Democracy; Economic Growth; Public Health; Causality;
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