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The growth effect of democracy and technology: An industry disaggregated approach

Izaskun Zuazu Bermejo

European Journal of Political Economy, 2019, vol. 56, issue C, 115-131

Abstract: The theoretical and empirical sides of democracy-growth literature fail to offer a consensus on the impact of democracy on growth. This paper provides a disaggregated manufacturing approach that reveals different effects of democracy across industries within countries. I surmise that the interplay between democracy and technological development is crucial to the economic performance of industries. A panel dataset of 61 manufacturing industries from 72 countries between 1990 and 2010 is employed, along with a wide variety of democracy measures. The results point to a technologically-conditioned effect of democracy. Political regime changes towards democracy are growth-enhancing for industries close to the World Technology Frontier but have a negative effect on backward industries. This evidence is robust to specification changes and alternative estimation techniques, and prevails once the possible dynamics of manufacturing growth are tackled.

Keywords: Democracy; Manufacturing industries; Economic growth; World technology frontier; Panel data (search for similar items in EconPapers)
JEL-codes: H7 O14 O43 (search for similar items in EconPapers)
Date: 2019
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European Journal of Political Economy is currently edited by J. De Haan, A. L. Hillman and H. W. Ursprung

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Handle: RePEc:eee:poleco:v:56:y:2019:i:c:p:115-131