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Democracy Does Cause Growth

  • ️Robinson, James A.
  • ️Fri Oct 18 2019
Abstract

We provide evidence that democracy has a positive effect on GDP per capita. Our dynamic panel strategy controls for country fixed effects and the rich dynamics of GDP, which otherwise confound the effect of democracy. To reduce measurement error, we introduce a new indicator of democracy that consolidates previous measures. Our baseline results show that democratizations increase GDP per capita by about 20 percent in the long run. We find similar effects using a propensity score reweighting strategy as well as an instrumental-variables strategy using regional waves of democratization. The effects are similar across different levels of development and appear to be driven by greater investments in capital, schooling, and health.

Department

Massachusetts Institute of Technology. Department of Economics

Journal

Journal of Political Economy

Publisher

University of Chicago Press

Citation

Daron Acemoglu, Suresh Naidu, Pascual Restrepo, and James A. Robinson, "Democracy Does Cause Growth," Journal of Political Economy 127, 1 (February 2019): 47-100. © 2019 The University of Chicago

Version:

Final published version