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Political institutions as substitute for democracy: a political economy analysis of economic growth

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  • Pereira, Carlos
  • Teles, Vladimir Kuhl

Abstract

This manuscript empirically assesses the effects of political institutions on economic growth. It analyzes how political institutions affect economic growth in different stages of democratization and economic development by means of dynamic panel estimation with interaction terms. The new empirical results obtained show that political institutions work as a substitute for democracy promoting economic growth. In other words, political institutions are important for increasing economic growth, mainly when democracy is not consolidated. Moreover, political institutions are extremely relevant to economic outcomes in periods of transition to democracy and in poor countries with high ethnical fractionalization.

Suggested Citation

  • Pereira, Carlos & Teles, Vladimir Kuhl, 2009. "Political institutions as substitute for democracy: a political economy analysis of economic growth," Textos para discussão 196, FGV/EESP - Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
  • Handle: RePEc:fgv:eesptd:196
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    File URL: http://bibliotecadigital.fgv.br/dspace/bitstream/10438/2752/1/TD%20196%20-%20Vladimir%20Kuhl%20Teles.pdf
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    Cited by:

    1. Paola Bongini & Małgorzata Iwanicz-Drozdowska & Paweł Smaga & Bartosz Witkowski, 2017. "Financial Development and Economic Growth: The Role of Foreign-Owned Banks in CESEE Countries," Sustainability, MDPI, Open Access Journal, vol. 9(3), pages 1-25, March.
    2. Sugata Ghosh & Andros Gregoriou & Anirban Mitra, 2013. "On the Role of Democracy in the Ethnicity-Growth Relationship: Theory and Evidence," CEDI Discussion Paper Series 13-02, Centre for Economic Development and Institutions(CEDI), Brunel University.
    3. repec:mje:mjejnl:v:11:y:2015:i:2:p:49-64 is not listed on IDEAS
    4. Madălina Mihaela Radu, 2015. "The Essential Political Framework For Economic Growth," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 3(2), pages 132-138, November.

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