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Who does better for the economy? Presidents versus parliamentary democracies

Listed author(s):
  • Richard McManus
  • F Gulcin Ozkan
Registered author(s):

    Are certain forms of government associated with superior macroeconomic performance? This paper attempts to answer this question by examining how government systems impact upon macroeconomic outcomes. We find that presidential regimes consistently produce less favourable outcomes as compared with parliamentary ones with lower output growth, higher and more volatile in ation and greater income inequality. Moreover, the magnitude of this effect is sizable. For example, output growth is between 0.6 and 1.2 percentage points lower and inflation is six percentage point higher under presidential regimes relative to those under parliamentary ones. The difference in distributional outcomes is even more stark; income inequality is between sixteen to twenty per cent worse under presidential systems. We also find that presidential regimes are particularly harmful in: less established democracies; where there is lack of inclusive institutions; where the rule of law is not fully respected; and, where the presidents have extensive legislative powers, especially in the presence of electoral systems with proportional representation.

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    File URL: https://www.york.ac.uk/media/economics/documents/discussionpapers/2017/1703.pdf
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    Paper provided by Department of Economics, University of York in its series Discussion Papers with number 17/03.

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    Date of creation: Mar 2017
    Handle: RePEc:yor:yorken:17/03
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    Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom

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    Web page: https://www.york.ac.uk/economics/
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