Democracy and Economic Growth

Does democracy hinder or harm economic growth?

- mixed evidence

Pro-Democracy View

- liberal representative democracy limits ability of state to expropriate wealth

- property rights are guaranteed

- investment will proceed

- markets will prosper

Pro-Authoritarianism View

- democratic publics will demand greater social spending and tax the wealthy to redistribute income

- politicians will be unable to implement reforms

o need more time in office to implement them

Mixed Evidence

- Barro found curvilinear relationship

- Prezeworksi, et. al found no relationship

- Type of data, countries, and variable measures matter

- “good governance” increase wealth