Democracy and Development: The Devil in the Details

Torsten Persson () and Guido Tabellini ()

No CESifo Working Paper No. 1672, CESifo Working Paper Series from CESifo GmbH

Abstract: Does democracy promote economic development? This paper reviews recent attempts to address this question that exploited within-country variation. It shows that the answer is largely positive, but also depends on the details of democratic reforms. First, the sequence of economic vs political reforms matters: countries liberalizing their economy before extending political rights do better. Second, different forms of democratic government lead to different economic policies, and this might explain why presidential democracy leads to faster growth than parliamentary democracy. Third, it is important to distinguish between expected and actual political reforms. Taking expectations of regime change into account helps identify a stronger growth effect of democracy.

Keywords: democracy; reform; growth; institutions; difference in difference (search for similar items in EconPapers)
JEL-codes: E00 O10 P00 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-pol and nep-soc
Date: Written 2006
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Related works:
Working Paper: Democracy and Development: The Devil in the Details (2006)
Working Paper: Democracy and Development: The Devil in the Details (2006)
Working Paper: Democracy and Development: The Devil in the Details (2006)
Working Paper: Democracy and Development: The Devil in the Details
Journal Article: Democracy and Development: The Devil in the Details (2006)
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