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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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File URL: https://www.econstor.eu/bitstream/10419/51376/1/672443376.pdf
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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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  1. Francesco Giavazzi & Guido Tabellini, 2004. "Economic and Political Liberalizations," Working Papers 264, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
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  9. Acemoglu, Daron & Johnson, Simon & Robinson, James A & Yared, Pierre, 2005. "Income and Democracy," CEPR Discussion Papers 5273, C.E.P.R. Discussion Papers.
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  11. Jan Fidrmuc, 2001. "Economic Reform, Democracy and Growth During Post-Communist Transition," William Davidson Institute Working Papers Series 372, William Davidson Institute at the University of Michigan.
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  13. Barro, Robert J, 1996. "Democracy and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 1-27, March.
  14. Minier, Jenny A, 1998. "Democracy and Growth: Alternative Approaches," Journal of Economic Growth, Springer, vol. 3(3), pages 241-66, September.
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  16. Falcetti, Elisabetta & Raiser, Martin & Sanfey, Peter, 2002. "Defying the Odds: Initial Conditions, Reforms, and Growth in the First Decade of Transition," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 229-250, June.
  17. Katarzyna Metelska-Szaniawska, 2009. "Constitutions and economic reforms in transition: an empirical study," Constitutional Political Economy, Springer, vol. 20(1), pages 1-41, March.
  18. Jenny A. Minier, 2003. "Democrats, Dictators, and Demonstrators," Economic Inquiry, Western Economic Association International, vol. 41(2), pages 224-233, April.
  19. Martin C. McGuire & Mancur Olson Jr., 1996. "The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 72-96, March.
  20. Wintrobe,Ronald, 1998. "The Political Economy of Dictatorship," Cambridge Books, Cambridge University Press, number 9780521583299, September.
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  24. 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.
  25. Hans Pitlik, 2007. "A race to liberalization? Diffusion of economic policy reform among OECD-economies," Public Choice, Springer, vol. 132(1), pages 159-178, July.
  26. Rivera-Batiz, Francisco L, 2002. "Democracy, Governance, and Economic Growth: Theory and Evidence," Review of Development Economics, Wiley Blackwell, vol. 6(2), pages 225-47, June.
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  29. 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.
  30. Dani Rodrik & Romain Wacziarg, 2005. "Do Democratic Transitions Produce Bad Economic Outcomes?," American Economic Review, American Economic Association, vol. 95(2), pages 50-55, May.
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