Democracy, growth, heterogeneity, and robustness

Markus Eberhardt

European Economic Review, 2022, vol. 147, issue C

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 the homogeneity assumption. My results confirm that in the long-run democracy has a positive and significant average effect on per capita income, albeit at 10% this is at best half the magnitude of recent estimates in the literature. Guided by existing theories, additional analysis probes the patterns of the heterogeneous ‘democratic dividend’ across countries. Adopting two rule-based robustness exercises I furthermore demonstrate that, in contrast to recent contributions to the literature, my approach yields empirical findings that are 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)
JEL-codes: O10 P16 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Democracy, Growth, Heterogeneity, and Robustness (2021)
Working Paper: Democracy, growth, heterogeneity, and robustness (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:147:y:2022:i:c:s0014292122000976

DOI: 10.1016/j.euroecorev.2022.104173

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