Questioning the democracy–growth debate in countries of the East African region: a political economy perspective

Sisay Demissew Beyene (), Mohammed Seid Ali, Belayneh Taye and Yihenew Wubu Endalew
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Sisay Demissew Beyene: Arsi University
Mohammed Seid Ali: Bahir Dar University
Belayneh Taye: University of Warwick
Yihenew Wubu Endalew: Arba Minch University

Journal of Social and Economic Development, 2024, vol. 26, issue 3, No 14, 1059-1081

Abstract: Abstract In Africa, though the nexus between democracy and economic growth has been studied for decades, the issue remains topical in academic and public policy debates. This has been common, particularly from the vantage point of the continent’s drive to meet the 2030 United Nations Sustainable Development Goals. However, existing literature in East African countries has substantial limitations in comprehensively analyzing the conventional democracy–growth hypothesis' intellectual, theoretical, and ideological compatibility. Moreover, most research findings and reports did not employ a mixed research approach and overlooked key econometric variables to address the underlying research question. Hence, this study aims to investigate the impact of democracy on economic growth in countries in the East African region from a political economy perspective. For the quantitative analysis, the study uses secondary panel data with panel autoregressive distributed lag, fully modified OLS, and dynamic OLS regression approaches from 1990 to 2018. For qualitative discussion, the study uses secondary documents and further discusses and interprets the quantitative results. The quantitative results show that all panel mean models provide different and mixed results concerning the impact of democracy on economic growth. As such, it reveals an inconclusive outcome, showing that a direct link between democracy and economic growth in countries in the East African region cannot be established. The study indicates that such a mixed or blurred result of the above econometric tests necessitates the consideration of country-specific, ideological, and policy contexts of the countries and global and exceptionally regional socio-economic as well as ideological–political contexts in the study of the democracy–growth nexus in East Africa.

Keywords: Democracy; Economic growth; Political economy; Conflict hypothesis; Compatibility hypothesis; Skeptical hypothesis; East Africa (search for similar items in EconPapers)
JEL-codes: B22 B23 D72 F50 P16 P48 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s40847-023-00270-z

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