The Political Economy of Growth: A Review

Hazama Yasushi

No 141, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This cursory literature review discusses the direct and indirect effects of institutions, governance, and democracy on economic growth, and the following conclusions are drawn. First, institutions and governance have a positive effect on growth. Even reforms that are less than comprehensive can stimulate, though not sustain, growth. Second, democracy neither promotes nor hampers growth directly. It secures stability and resilience in growth. It also exerts impacts on sources of growth but its net effect remains inconclusive. There remains unanswered the question of why institutions and governance matter but not democracy does not. The difference may be partly due to negative effects on investment and labor supply as well as the low credibility of young or partial democracies.

Keywords: Economic growth; Institutions; Governance; Democracy; Politics; 経済成長; 制度; ガバナンス; 民主主義; 政治 (search for similar items in EconPapers)
JEL-codes: O43 (search for similar items in EconPapers)
Date: 2008-03-01
New Economics Papers: this item is included in nep-pol
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Citations: View citations in EconPapers (2)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 141. 2008-03-01

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