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The Divergent Postcommunist Paths to Democracy and Economic Freedom

Author

Listed:
  • Simeon Djankov

    () (Peterson Institute for International Economics)

  • Owen Hauck

    () (Peterson Institute for International Economics)

Abstract

This paper presents evidence from 29 postcommunist countries that the economic transition has been more successful than the political transformation in the quarter century since the fall of the Berlin Wall. The adoption of strong parliamentarian systems has countered the adverse effects of religious and imperial history on economic evolution. As a result, the divergence in democracy and political rights is 4 to 5 times larger than the divergence in the path toward economic freedom and ease of doing business. Democracy is not harder to predict than economic freedom—history and ethnicity predict it well. But recent authoritarian regressions in Hungary and Poland, countries with successful economic reforms and strong parliamentarian systems, present a new challenge to researchers.

Suggested Citation

  • Simeon Djankov & Owen Hauck, 2016. "The Divergent Postcommunist Paths to Democracy and Economic Freedom," Working Paper Series WP16-10, Peterson Institute for International Economics.
  • Handle: RePEc:iie:wpaper:wp16-10
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    References listed on IDEAS

    as
    1. Bagchi, Sutirtha & Svejnar, Jan, 2015. "Does wealth inequality matter for growth? The effect of billionaire wealth, income distribution, and poverty," Journal of Comparative Economics, Elsevier, vol. 43(3), pages 505-530.
    2. Anders Klevmarken, & Joseph P. Lupton & Frank P. Stafford, 2003. "Wealth Dynamics in the 1980s and 1990s: Sweden and the United States," Journal of Human Resources, University of Wisconsin Press, vol. 38(2).
    3. Steven N. Kaplan & Joshua Rauh, 2013. "It's the Market: The Broad-Based Rise in the Return to Top Talent," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 35-56, Summer.
    4. Caroline Freund & Sarah Oliver, 2016. "Rich People Poor Countries: The Rise of Emerging-Market Tycoons and their Mega Firms," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 7038.
    5. Sergei Guriev & Andrei Rachinsky, 2005. "The Role of Oligarchs in Russian Capitalism," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 131-150, Winter.
    6. Erik Hurst & Ming Ching Luoh & Frank P. Stafford, 1998. "The Wealth Dynamics of American Families, 1984-94," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 267-338.
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    More about this item

    Keywords

    Economic Freedom; Ease of Doing Business; Democracy;

    JEL classification:

    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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