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Political persistence and economic growth

Giorgio Bellettini, Carlotta Berti Ceroni and Giovanni Prarolo (giovanni.prarolo@unibo.it)

European Journal of Political Economy, 2013, vol. 31, issue C, 165-179

Abstract: Using data for a panel of 62 partly to fully democratic countries in the period 1984–2008, we provide evidence that political persistence (measured as the longest tenure in office of main political entities) is negatively associated with growth, after controlling for country and time fixed effects, and that this association is stronger in countries with low bureaucratic quality, where the cost of red tape is high. This evidence can be rationalized by means of a growth model with quality improvements where political connections with politicians can be exploited by low-quality producers to mitigate red tape costs, defend their monopoly position and prevent entry of higher-quality competitors. The model implies a negative relationship between persistence in office of politicians and economic growth in high red-tape countries, while no association is expected where red tape costs are low.

Keywords: Political persistence; Economic growth; Red tape (search for similar items in EconPapers)
JEL-codes: C23 D73 O31 O33 O40 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:31:y:2013:i:c:p:165-179

DOI: 10.1016/j.ejpoleco.2013.05.002

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