Democracy and reforms

Mohammad Amin () and Simeon Djankov ()

No 4835, Policy Research Working Paper Series from The World Bank

Abstract: The authors use a sample of 147 countries to investigate the link between democracy and reforms. Democracy may be conducive to reforms, because politicians have the incentive to embrace growth-enhancing reforms to win elections. By contrast, authoritarian regimes do not have to worry as much about public opinion and may undertake reforms that are painful in the short run but bring future prosperity. This paper tests these hypotheses, using data on micro-economic reforms from the World Bank's Doing Business database. These data do not suffer the endogeneity issues associated with other datasets on changes in economic institutions. The results provide robust support for the claim that democracy is good for growth-enhancing reforms.

Keywords: Parliamentary Government; Legal Products; Labor Policies; Public Sector Corruption&Anticorruption Measures; Emerging Markets (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-law
Date: 2009-02-01
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Working Paper: Democracy and Reforms (2009)
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