Democracy, State Capacity, and Economic Growth

Carl Henrik Knutsen

World Development, 2013, vol. 43, issue C, 1-18

Abstract: This paper discusses how regime type and state capacity may interact in affecting economic growth. The empirical analysis finds a positive and robust effect of democracy on growth in Sub-Saharan Africa, a continent historically characterized by weak-capacity states. Furthermore, the paper identifies a robust interaction effect between democracy and state capacity on growth, both in Africa and globally; the effect of democracy on growth increases when state capacity is reduced. Democracy is estimated to have a positive effect on growth in weak-capacity states, but not in high-capacity states. Additionally, the results indicate that state capacity enhances growth only in dictatorships.

Keywords: democracy; dictatorship; state capacity; economic growth; Africa (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (32)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:43:y:2013:i:c:p:1-18

DOI: 10.1016/j.worlddev.2012.10.014

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