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Can Democracy Educate a Society?

  • Gersbach, Hans

    ()

    (ETH Zurich)

  • Siemers, Lars

    ()

    (University of Siegen)

We examine the constitutional design required for democratic societies to overcome poverty traps. Restricting agenda-setting only by ensuring subsistence levels of consumption and applying simple majority voting as decision rule fails to enable a society to overcome poverty because it does not induce capital-enhancing redistribution. We show that a combination of suitable constitutional rules can, however, overcome poverty and induce economic well-being. Besides majority voting, these rules include rotating agenda-setting, agenda repetition and tax protection rules. We highlight the crucial role of democratic institutions for economic development and discuss why the evidence for democracy fostering growth is mixed.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1693.

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Length: 29 pages
Date of creation: Jul 2005
Date of revision:
Handle: RePEc:iza:izadps:dp1693
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