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Democracy and prosperity in two decades of transition

  • Apolte, Thomas

This paper revisits the relation between democracy, liberalization, and prosperity in transition countries, using a panel of 25 countries over 19 years. Earlier investigations found political and economic liberalization to be positively correlated whereas the relation between political liberalization and prosperity remained unclear. In this paper, a hump-shaped relationship between political liberalization and growth is found, such that a rise in democracy levels promotes growth only under initially low democracy levels. Furthermore, economic and political liberalization turn out to be positively related, but with surprisingly small coefficients.

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Paper provided by Center of Applied Economic Research Münster (CAWM), University of Münster in its series CAWM Discussion Papers with number 26.

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Date of creation: 2010
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Handle: RePEc:zbw:cawmdp:26
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  11. Krueger, Gary & Ciolko, Marek, 1998. "A Note on Initial Conditions and Liberalization during Transition," Journal of Comparative Economics, Elsevier, vol. 26(4), pages 718-734, December.
  12. Alberto Alesina & Dani Rodrik, 1991. "Distributive Politics and Economic Growth," NBER Working Papers 3668, National Bureau of Economic Research, Inc.
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  18. Berta Heybey & Peter Murrell, 1999. "The relationship between economic growth and the speed of liberalization during transition," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 3(2), pages 121-137.
  19. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
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  24. Wintrobe,Ronald, 1998. "The Political Economy of Dictatorship," Cambridge Books, Cambridge University Press, number 9780521583299, October.
  25. Falcetti, Elisabetta & Lysenko, Tatiana & Sanfey, Peter, 2006. "Reforms and growth in transition: Re-examining the evidence," Journal of Comparative Economics, Elsevier, vol. 34(3), pages 421-445, September.
  26. Katarzyna Metelska-Szaniawska, 2009. "Constitutions and economic reforms in transition: an empirical study," Constitutional Political Economy, Springer, vol. 20(1), pages 1-41, March.
  27. de Haan, Jakob & Sturm, Jan-Egbert, 2003. "Does more democracy lead to greater economic freedom? New evidence for developing countries," European Journal of Political Economy, Elsevier, vol. 19(3), pages 547-563, September.
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  30. Besley, Timothy J. & Kudamatsu, Masayuki, 2007. "Making Autocracy Work," CEPR Discussion Papers 6371, C.E.P.R. Discussion Papers.
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