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Democracy & Growth

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  • Robert J. Barro

Abstract

Growth and democracy (subjective indexes of political freedom) are analyzed for a panel of about 100 countries from 1960 to 1990. The favorable effects on growth include maintenance of the rule of law, free markets, small government consumption, and high human capital. Once these kinds of variables and the initial level of real per-capita GDP are held constant, the overall effect of democracy on growth is weakly negative. There is a suggestion of a nonlinear relationship in which democracy enhances growth at low levels of political freedom but depresses growth when a moderate level of freedom has already been attained. Improvements in the standard of living - measured by GDP, life expectancy, and education - substantially raise the probability that political freedoms will grow. These results allow for predictions about which countries will become more or less democratic in the future.

Suggested Citation

  • Robert J. Barro, 1994. "Democracy & Growth," NBER Working Papers 4909, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:4909
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Pedro Vieira & Aurora Teixeira, 2006. "Human Capital and Corruption: A microeconomic model of the bribes market with democratic contestability," Notas Económicas, Faculty of Economics, University of Coimbra, issue 23, pages 72-82, June.
    2. Tapio Palokangas, 2005. "Common markets, economic growth, and creative destruction," Journal of Economics, Springer, vol. 86(1), pages 57-76, December.
    3. Easterly, William, 2001. "The Middle Class Consensus and Economic Development," Journal of Economic Growth, Springer, vol. 6(4), pages 317-335, December.
    4. Coolidge, Jacqueline & Rose-Ackerman, Susan, 1997. "High-level rent-seeking and corruption in African regimes : theory and cases," Policy Research Working Paper Series 1780, The World Bank.
    5. Fabrizio Carmignani, 2001. "Theory and Evidence on the Political Economy of Growth," Working Papers 33, University of Milano-Bicocca, Department of Economics, revised Jan 2001.
    6. Fedderke, J. W. & de Kadt, R. H. J. & Luiz, J. M., 2001. "Indicators of political liberty, property rights and political instability in South Africa: 1935-97," International Review of Law and Economics, Elsevier, vol. 21(1), pages 103-134, March.
    7. repec:ksp:journ2:v:4:y:2017:i:3:p:343-344 is not listed on IDEAS
    8. Clague, Christopher & Keefer, Philip & Knack, Stephen & Olson, Mancur, 1996. "Property and Contract Rights in Autocracies and Democracies," Journal of Economic Growth, Springer, vol. 1(2), pages 243-276, June.
    9. repec:ksp:journ2:v:4:y:2017:i:3:p:345-351 is not listed on IDEAS
    10. de Haan, Jakob & Sturm, Jan-Egbert, 2000. "On the relationship between economic freedom and economic growth," European Journal of Political Economy, Elsevier, vol. 16(2), pages 215-241, June.
    11. Mulligan Casey B & Gil Ricard & Sala-i-Martin Xavier X, 2010. "Social Security and Democracy," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-46, March.
    12. Sobel, Andrew C., 2003. "National governance and global lending," Journal of International Management, Elsevier, vol. 9(3), pages 287-304.
    13. Stasavage, David, 2000. "Private investment and political uncertainty," LSE Research Online Documents on Economics 6653, London School of Economics and Political Science, LSE Library.
    14. Johannes Fedderke & Robert Klitgaard & Kamil Akramov, 2011. "Heterogeneity Happens: How Rights Matter in Economic Development," Working Papers 220, Economic Research Southern Africa.
    15. Christopher A. Sims, 1996. "Inflation and growth - commentary," Proceedings, Federal Reserve Bank of St. Louis, issue May, pages 173-178.
    16. repec:dgr:rugccs:199903 is not listed on IDEAS
    17. Johannes Fedderke, 2001. "Growth and institutions," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(6), pages 645-670.

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