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