The Political U: New Evidence on Democracy and Income

Nauro Campos, Fabrizio Coricelli and Marco Frigerio

No 17551, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper offers new insights into the causal relationship between income and democracy. Its main argument is that this relation is U-shaped and not linear as often stated. Using data from 162 countries spanning 1960-2018, our results indicate that “intermediate†regimes lead to a 20% decline in economic performance vis-à -vis both democracies and autocracies. Moreover, political instability is identified as the key channel explaining these effects. Other potential mechanisms, such as education, investment, and inequality, lack similar empirical support. These findings are robust to alternative estimators, democracy measures and, chiefly, to the use of night-lights instead of GDP per capita.

Keywords: democracy; income; growth; political development; economic development; Democracy; Political economy of development (search for similar items in EconPapers)
JEL-codes: C33 D72 F15 O43 P16 (search for similar items in EconPapers)
Date: 2022-09
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP17551 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: The Political U: New Evidence on Democracy and Income (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:17551

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP17551

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().