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Democratization, Violent Social Conflicts, and Growth

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  • Matteo Cervellati
  • Sunde, Uwe

Abstract

This paper investigates the empirical role of violent conflicts for the causal effect of democracy on economic growth. Exploiting within-country variation to identify the effect of democratization during the "Third Wave", we find evidence that the effect of democratization is weaker than reported previously once one accounts for the incidence of conflict, while the incidence of conflict itself significantly reduces growth. The results show in turn that permanent democratic transitions significantly reduce the incidence and onset of conflict, which suggests that part of the positive growth effect of democratization arises because democratization reduces conflict incidence. When accounting for the role of violence during democratization, we find evidence that peaceful transitions to democracy have a significant positive effect on growth that is even larger than reported in the previous literature, while violent transitions to democracy have no, or even negative, effects on economic growth.

Suggested Citation

  • Matteo Cervellati & Sunde, Uwe, 2011. "Democratization, Violent Social Conflicts, and Growth," Economics Working Paper Series 1114, University of St. Gallen, School of Economics and Political Science.
    • Handle: RePEc:usg:econwp:2011:14
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    Cited by:

    1. Fabrice Murtin & Romain Wacziarg, 2014. "The democratic transition," Journal of Economic Growth, Springer, vol. 19(2), pages 141-181, June.
    2. Necmettin ÇELİK & Mehmet KARAÇUKA, 2018. "Bölgesel Kalkınmanın İktisadi Politiği: Siyasal Çoğulculuk ve Yatırım İlişkisiAbstract: Public and private fixed capital investments are vital dynamics of the regional economic growth. Therefore, the ," Sosyoekonomi Journal, Sosyoekonomi Society, issue 26(37).
    3. repec:hal:spmain:info:hdl:2441/5m0od0o9jn9pqbdmos7fpt28hg is not listed on IDEAS

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    More about this item

    Keywords

    Democratization; Armed Conict; Civil War; Economic Growth; Democratization Scenario; Peaceful Transition.;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative

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