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Are democratic governments more efficient?

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  • Adam, Antonis
  • Delis, Manthos D
  • Kammas, Pantelis

Abstract

This paper explores the relationship between public sector efficiency (PSE) and the level of democracy, both theoretically and empirically. At the theoretical level a simple model of elections with two time periods is presented, which takes into account whether the political regime is democratic or not. Specifically, we assume that elected officials in democracies are “more” accountable to voters than the respective ones in autocracies. This mechanism induces the democratic politicians to produce the public good in a more efficient way, in order to remain in power. In the empirical section we examine the effect of democracy on PSE for a panel dataset of 50 developing and developed countries over the period 1980-2000. Our results suggest that the relationship between PSE and democracy is positive and statistically significant, thus confirming our theoretical priors.

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  • Adam, Antonis & Delis, Manthos D & Kammas, Pantelis, 2009. "Are democratic governments more efficient?," MPRA Paper 15843, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:15843
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    7. Hatra Voghouei & Mohammad Ali Jamali, 2018. "Determinants of government efficiency: does information technology play a role?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 8(3), pages 285-298, September.
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    10. David M. Kemme & Bhavik Parikh & Tanja Steigner, 2021. "Inequality, autocracy, and sovereign funds as determinants of foreign portfolio equity flows," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 44(2), pages 249-278, June.
    11. Yajie Liu & Feng Dong, 2020. "Corruption, Economic Development and Haze Pollution: Evidence from 139 Global Countries," Sustainability, MDPI, vol. 12(9), pages 1-22, April.
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    13. Kis-Katos, Krisztina & Liebert, Helge & Schulze, Günther G., 2011. "On the origin of domestic and international terrorism," European Journal of Political Economy, Elsevier, vol. 27(S1), pages 17-36.
    14. Jetter, Michael, 2014. "Volatility and growth: Governments are key," European Journal of Political Economy, Elsevier, vol. 36(C), pages 71-88.
    15. Fumagalli, Elena & Mentzakis, Emmanouil & Suhrcke, Marc, 2013. "Do political factors matter in explaining under- and overweight outcomes in developing countries?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 46(C), pages 48-56.
    16. Michael Berlemann & Kai Hielscher, 2016. "Measuring Effective Monetary Policy Conservatism of Central Banks: A Dynamic Approach," Annals of Economics and Finance, Society for AEF, vol. 17(1), pages 105-132, May.
    17. Ana Carolina Garriga, 2016. "Central Bank Independence in the World: A New Data Set," International Interactions, Taylor & Francis Journals, vol. 42(5), pages 849-868, October.
    18. Cooray, Arusha & Potrafke, Niklas, 2011. "Gender inequality in education: Political institutions or culture and religion?," European Journal of Political Economy, Elsevier, vol. 27(2), pages 268-280, June.
    19. Aloys L. Prinz & Christian J. Sander, 2020. "Political leadership and the quality of public goods and services: Does religion matter?," Economics of Governance, Springer, vol. 21(4), pages 299-334, December.
    20. Münch Angela & Fielding David & Freytag Andreas, 2020. "Public Spending on Health as Political Instrument? – Regime-type dependency of public spending," Open Economics, De Gruyter, vol. 3(1), pages 121-134, January.
    21. Florian Dorn, 2021. "Elections and Government Efficiency," ifo Working Paper Series 363, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    22. Yue, Jiahua & Zhou, Shangsi, 2018. "Democracy’s comparative advantage: Evidence from aggregated trade data, 1962–2010," World Development, Elsevier, vol. 111(C), pages 27-40.
    23. Dorsch, Michael T. & Maarek, Paul, 2015. "Inefficient predation and political transitions," European Journal of Political Economy, Elsevier, vol. 37(C), pages 37-48.

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    Keywords

    H11; D7;

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    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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