Democracy, growth, heterogeneity, and robustness

Markus Eberhardt

No 2021-02, Discussion Papers from University of Nottingham, GEP

Abstract: I motivate and empirically investigate differential long-run growth effects of democratisation across countries. While the existing literature recognises the potential for such heterogeneity, empirical implementations to date unanimously assume a common democracy-growth nexus across countries. Adopting novel methods for causal inference in policy evaluation I relax this assumption to confirm that in the long-run democracy has a positive average effect on per capita income of around 10%, adopting a range of alternative definitions for regime change in the form of binary indicators. Guided by existing hypotheses, additional analysis probes the patterns of the heterogeneous 'democratic dividend' across countries. A second common feature of this literature as well as cross-country growth empirics more generally is the absence of concerns for sample selection or influential observations. I carry out two rule-based robustness exercises to demonstrate that my empirical findings are highly robust to substantial changes to the sample.

Keywords: Democracy; Growth; Political Development; Difference-in-Difference Estimator; Interactive Fixed Effects (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-gro
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Related works:
Journal Article: Democracy, growth, heterogeneity, and robustness (2022)
Working Paper: Democracy, Growth, Heterogeneity, and Robustness (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notgep:2021-02

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