Jac, Heckelman (2009): The connection between democratic freedoms and growth in transition economies.
Download (310kB) | Preview
The Freedom House democracy index is often used in regression analysis to estimate the relationship between democratic freedoms and growth. The index is comprised of two broad categories for political rights and civil liberties. However, the relationship between the underlying types of rights and liberties to growth remains unknown. A newer alternative democracy index developed by Freedom House specifically for the transition nations is compared to the original democracy index. The two are highly correlated but the latter entails a greater breakdown across six democracy areas including civil society, judicial framework, media independence, corruption, electoral process, and governance. Except for corruption, each is found to be individually significant in separate growth regressions, but when all are included simultaneously, only greater freedoms in civil society and electoral process are significantly correlated with higher growth, while greater freedom in judicial framework is significantly correlated with lower growth. The remaining areas are not statistically significant.
|Item Type:||MPRA Paper|
|Original Title:||The connection between democratic freedoms and growth in transition economies|
|Keywords:||democracy; economic growth; hedonic regression|
|Subjects:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development
D - Microeconomics > D7 - Analysis of Collective Decision-Making
P - Economic Systems > P3 - Socialist Institutions and Their Transitions
|Depositing User:||Jac Heckelman|
|Date Deposited:||24. Mar 2010 01:31|
|Last Modified:||12. Feb 2013 11:13|
Alesina, Alberto, Perotti, Roberto, 1994. The political economy of growth: A critical survey of the recent literature. The World Bank Economic Review 8, 351-71.
Aron, Janine, 2000. Growth and institutions: A review of the evidence. World Bank Observer 15, 99-135.
Bahmani Oskooee, Mohsen, Goswami, Gour G., 2006. Political rights, civil liberties, and the black market premium on foreign exchange: Evidence from developing countries. Review of Political Economy 18, 91 104.
Barro, Robert J., 1991. A cross-country study of growth, saving, and government. In: Bernheim, B. Douglas, Shoven, John B. (Eds.) National Saving and Economic Performance. University of Chicago Press, Chicago, pp. 271-304.
Barro, Robert J., 1996. Democracy and growth. Journal of Economic Growth 1: 1-27.
Bhagwati, Jagdish N., 1966. The Economics of Underdeveloped Countries. McGraw Hill, New York.
Bhagwati, Jagdish N., 2002. Democracy and development: Cruel dilemma or symbiotic relationship? Review of Development Economics 6, 151-62.
Bird, Richard M., Ebel, Richard D., Wallich, Christine I. (editors), 1995. Decentralization of the socialist state: Intergovernmental Finance in transition economies. World Bank, Washington DC.
Caudill, Stephen B., Zanella, Fernando C., Mixon, Jr., Franklin G., 2000. Is economic freedom one dimensional? A factor analysis of some common measures of economic freedom. Journal of Economic Development 25, 17-40.
Coyne, Christopher, Leeson, Peter, 2004. Read all about it!: Understanding the role of media in economic development. Kyklos 57, 21-44.
Dawson, John, 2003. Causality in the freedom growth relationship. European Journal of Political Economy 19, 479 495.
De Haan, Jakob, Siermann, Clemens L.J., 1995. A sensitivity analysis of the impact of democracy on economic growth. Empirical Economics 20, 197-215.
Feld, Lars P., Voight, Stephen, 2003. Economic growth and judicial independence: Cross country evidence using a new set of indicators. European Journal of Political Economy 19, 497-527.
Feng, Yi, 1995. Regime, polity, and economic performance. Growth and Change 26, 77-104.
Fidrmuc, Jan, 2003. Economic reform, democracy and growth during post-Communist transition. European Journal of Political Economy 19, 583-604.
Goldsmith, Arthur A., 1995. Democracy, property rights and economic growth. Journal of Development Studies 32, 157-174. Greene, William H. 1997. Econometric Analysis. Macmillan, New York.
Heckelman, Jac C., Powell, Benjamin, 2007. Corruption and the Institutional Environment for Growth. Paper presented at Association of Private Enterprise Education conference. Cancun, Mexico
Heckelman, Jac C., Stroup, Michael D., 2000. Which economic freedoms contribute to growth? Kyklos 53, 527-44.
Helliwell, J.F., 1994. Empirical linkages between democracy and economic growth. British Journal of Political Science 24, 225-48.
Henisz, Witold J., 2000. The institutional environment for economic growth. Economics and Politics 12, 1-31.
Isham, Jonathan, Kaufmann, Daniel, Pritchett, Lane H., 1997. Civil liberties, democracy, and the performance of government projects. World Bank Economic Review 11: 219-242.
Knack, Stephen, Keefer, Philip. 1995. Institutions and economic performance: Cross-country tests using alternative institutional measures. Economics and Politics 7: 207-27. Reprinted in Knack, Stephen (Ed.), Democracy, Governance, & Growth, University of Michigan Press, Ann Arbor, pp. 56-77.
Kormendi, Roger C., Meguire, Philip C., 1985. Macroeconomic determinants of growth: Cross-country evidence. Journal of Monetary Economics 16, 141-63.
Landes, William M., Posner, Richard A., 1975. The Independent Judiciary in an Interest-Group Perspective. Journal of Law and Economics 18, 875-901.
Levine, Ross, Renelt, David, 1992. A sensitivity analysis of cross-country growth regressions. American Economic Review 82, 942-63.
Li, Hongyi, Squire, Lyn, Zou, Heng fu, 1998. Explaining international and intertemporal variations in income inequality. Economic Journal 108, 26 43.
Mauro, Paolo, 1995. Corruption. Quarterly Journal of Economics 110, 681-712.
Mueller, Dennis C. 2003. Public Choice III. Cambridge University Press, Cambridge.
Olson, Mancur. 1982. The Rise and Decline of Nations. Yale University Press, New Haven, CT.
Ratliff, William, 1999. Development and civil society in Latin America and Asia. Annals of the Academy of Political and Social Science 565, 91-112.
Rodrik, Dani, 1999. Where did all the growth go? External shocks, social conflict, and growth collapses. Journal of Economic Growth 4, 385-412.
Roland, Gerard. 2002. The political economy of transition. Journal of Economic Perspectives 16, 29-50.
Scully, Gerald W. 2001. Institutions, policy, and economic growth. In: Shughart, William F., Razzolini, Laura (Eds.) The Elgar Companion to Public Choice. Edward Elgar, Cheltenham, UK, pp. 611 627.
Spindler, Zane A. 1991. Liberty and development: A further empirical perspective. Public Choice 69, 197 210.
Stroup, Michael D., Heckelman, Jac C., 2001. Size of the military sector and economic growth: A panel data analysis of Africa and Latin America. Journal of Applied Economics 2, 329 360.
Svensson, Jakob, 2005. Eight questions about corruption. Journal of Economic Perspectives 19, 19-42.
Weller, Christian E., Singleton, Laura, 2004. Political freedom, external liberalization and financial stability. International Review of Applied Economics 18, 43-61.
Whaples, Robert, Heckelman, Jac C., 2005. Public choice economics: Where is there consensus? American Economist 49, 66-78.
Wittman, Donald, 1995. The Myth of Democratic Failure : Why Political Institutions Are Efficient. Chicago: University of Chicago Press.