Adam, Antonis and Delis, Manthos D and Kammas, Pantelis (2009): Are democratic governments more efficient?
Download (221kB) | Preview
This paper explores the relationship between public sector efficiency (PSE) and the level of democracy, both theoretically and empirically. At the theoretical level a simple model of elections with two time periods is presented, which takes into account whether the political regime is democratic or not. Specifically, we assume that elected officials in democracies are “more” accountable to voters than the respective ones in autocracies. This mechanism induces the democratic politicians to produce the public good in a more efficient way, in order to remain in power. In the empirical section we examine the effect of democracy on PSE for a panel dataset of 50 developing and developed countries over the period 1980-2000. Our results suggest that the relationship between PSE and democracy is positive and statistically significant, thus confirming our theoretical priors.
|Item Type:||MPRA Paper|
|Original Title:||Are democratic governments more efficient?|
|Subjects:||D - Microeconomics > D7 - Analysis of Collective Decision-Making
H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations
|Depositing User:||Pantelis Kammas|
|Date Deposited:||22. Jun 2009 00:59|
|Last Modified:||12. Mar 2015 09:40|
Acemoglu, Daron. 2005. “Politics and Economics in Weak and Strong States.” Journal of Monetary Economics 52: 1199-1226.
Acemoglu, Daron, Davide Ticchi and Andrea Vindigni. 2006. “Emergence and Persistence of Inefficient States.” NBER Working Papers No. 12748.
Adam, Antonis and Fragkiskos Filippaios. 2007. “Foreign direct investment and civil liberties: A new perspective,” European Journal of Political Economy 23: 1038-1052.
Adam, Antonis. 2009. “Fiscal Reliance on Tariff Revenues: In Search of a Political Economy Explanation?” Review of Development Economics, forthcoming.
Afonso, Antonio, Ludger Schuknecht, and Vito Tanzi. 2005. “Public Sector Efficiency: An International Comparison.” Public Choice 123: 321-347.
Angelopoulos, Konstantinos, and Apostolis Philippopoulos. 2005. “The Role of Government in Anti-Social Redistributive Activities.” CESifo Working Paper No. 1427.
Barro, Robert J. 1973. “The Control of Politicians: an Economic Model.” Public Choice 14, 19-42.
Barro, Robert J. 1997. Determinants of economic growth: A cross-country empirical study. Cambridge and London: MIT Press.
Baumol, William J. 1959. Business Behavior, Value and Growth. New York, NY: MacMillan.
Beck Thorsten, George Clarke, Alberto Groff, Philip Keefer, and Patrick Walsh. 2001. “New Tools in Comparative Political Economy: The Database of Political Institutions.” World Bank Economic Review 15: 165-176.
Bendor, Jonathan, Taylor Serge, and Roland Van Gaalen. 1985. “Bureaucratic Expertise Versus Legislative Authority: A Model of Deception and Monitoring in Budgeting.” American Political Science Review 79: 1041-60.
Bendor, Jonathan, Taylor Serge, and Roland Van Gaalen. 1987. “Politicians, Bureaucrats, and Asymmetric Information.” American Journal of Political Science 31: 796-828.
Besley, Timothy. 2006. Principaled Agents? The Political Economy of Good Government. New York, NY: Oxford University Press.
Besley, Timothy and Masayuki Kudamatsu. 2006. “Health and Democracy.” American Economic Review 96: 313-318.
Besley, Timothy and Torsten Persson. 2008. “Wars and State Capacity.” Journal of the European Economic Association 6: 522-530.
Besley, Timothy and Andrea Prat, 2006. “Handcuffs for the Grabbing Hand? Media Capture and Government Accountability.” American Economic Review 96: 720-736.
Besley, Timothy and Michael Smart, 2007. “Fiscal restraints and voter welfare.” Journal of Public Economics 91: 755-773.
Breton, Albert and Ronald Wintrobe. 1975. “The Equilibrium Size of a Budget Maximizng Bureau.” Journal of Political Economy 83:195-207.
Brunetti, Aymo. 1997. “Political Variables in Cross-Country Growth Analysis.” Journal of Economic Surveys 11: 163-190.
Chan, Kenneth. 2002. “Trade and Bureaucratic Efficiency.” Economic Development and Cultural Change 50: 735-754.
Cukierman, Alex, Steven Webb, and Bilin Neyapti. 1992. “Measuring the Independence of Central Banks and its Effects on Policy Outcomes.” The World Bank Economic Review 6: 353-398.
Cyert, Robert M., and James G. March. 1963. A Behavioral Theory of the Firm. Englewood Cliffs, NJ: Prentice- Hall.
De Haan, Jacob, and Clemens L.J. Siermann. 1995. “A Sensitivity Analysis of the Impact of Democracy on Economic Growth.” Empirical Economics 20: 197-215.
Fearon, James. 1999. “Electoral Accountability and the Control of Politicians: Selecting Good Types versus Sanctioning Poor Performance.” In Przeworski, A., S.C. Stokes and B. Manin (Eds.), Democracy, Accountability, and Representation, New York, NY: Cambridge University Press, pp. 55-97.
Ferejohn, John A. 1986. “Incumbent Performance and Electoral Control.” Public Choice 30: 5-25.
Freedom House. 2004. Freedom in the World. Westport CT: Greenwood Press.
Gastil, Raymond D. 1982. Freedom in the World. Westport CT: Greenwood Press.
Gwartney, James, and Robert Lawson. 2006. Economic Freedom of the World: 2006 Annual Report. Vancouver: The Fraser Institute. Data retrieved from www.freetheworld.com .
Heckman, James J. 1976. “The Common Structure of Statistical Models of Truncation, Sample Selection, and Limited Dependent Variables and a Simple Estimator for Such Models.” Annals of Economic and Social Measurement 5: 475–492.
Heckman, James J. 1988. “The Microeconomic Evaluation of Social Programs and Economic Institutions.” In: Chung-Hua Series of Lectures by Invited Eminent Economists, No. 14. The Institute of Economics, Academia Sinica, Taipei.
Hanushek, Eric A. and Ludger Woessmann. 2009. “Do Better Schools Lead to More Growth? Cognitive Skills, Economic Outcomes, and Causation.” NBER Working Paper No. 14633.
Helliwell, John. 1994. “Empirical Linkages Between Democracy and Economic Growth.” British Journal of Political Science 24: 225-248.
International Country Risk Guide. 2006. IRIS Center, University of Maryland.
Joyce, Joseph P., 2006, “Promises Made, Promises Broken: A Model of IMF Program Implementation”, Economics and Politics 18: 339-365.
Kudamatsu Masayuki. 2006. “Has Democratization Reduced Infant Mortality in Sub- Saharan Africa? Evidence from Micro Data. Unpublished Paper.
Makris Maltiadis. 2006. “Do Elections Motivate Incumbents? Political Accountability in a Representative Democracy.” Department of Economics, University of Exeter, mimeo.
McGuire, Martin C. and Mancur Jr. Olson. 1996. “The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force.” Journal of Economic Literature 34: 72-96.
Mansfield, Edward D., Helen V. Milner, and Peter B. Rosendorff. 2002. “Why Democracies Cooperate More: Electoral Control and International Trade Agreements.” International Organization 56: 477-514.
Miller Gary, J. and Terry M. Moe. 1983. “Bureaucrats, legislators, and the size of government”. American Political Science Review, 77: 297–322.
Mueller, Dennis. 2003. Public Choice III. New York: Cambridge University Press.
Mulligan, Casey B., Ricard Gil and Xavier Sala-i-Martin. 2001. “"Do Democracies Have Different Public Policies Than Nondemocracies?” Journal of Economic Perspectives 18: 51-74.
Myerson, Roger, B. 1993. “Effectiveness of Electoral Systems for Reducing Government Corruption: A Game-Theoretic Analysis.” Games and Economic Behaviour 5: 118-132.
Persson, Torsten, Gerard Roland and Guido Tabellini. 1997. “Separation of Powers and Political Accountability.” The Quarterly Journal of Economics 112: 1163-1202
Persson, Torsten, and Guido Tabellini. 1999. “The Size and Scope of Government: Comparative Politics with Rational Politicians.”European Economic Review 43: 699-735.
Persson, Torsten and Guido Tabellini. 2003. The Economic Effects of Constitutions Cambridge: MIT Press.
Persson, Torsten, Guido Tabellini and Francesco Trebbi. 2003. “Electoral Rules and Corruption.” Journal of the European Economic Association 1: 958-989.
Polak, Jacques J. 1991. “The Changing Nature of IMF Conditionality.” Essay in International Finance No. 184. Princeton, NJ: Princeton University.
Polity IV Project. 2004.”Political Regime Characteristics and Transitions, 1800-2007.” Center for International Development and Conflict Management. University of Maryland, College Park, MD.
Pollilo, Simone, and Mauro Guillén. 2005. “Globalization Pressures and the State: The Global Spread of Central Bank Independence.” American Journal of Sociology 110: 1764-1802.
Prendergast, Cadice. 2003. “The Limits of Bureaucratic Efficiency.” Journal of Political Economy 111: 929-958.
Przeworski, Adam. 2003. States and Markets: a primer in political economy. New York: Cambridge University Press, 2003.
Przeworski, Adam, Michael E. Alvarez, José Antonio Cheibub and Fernando Limongi. 2000. Democracy and Development: Political Institutions and Well-Being in the World, 1950-1990. Cambridge: Cambridge University Press.
Przeworski, Adam, and Fernando Limongi. 1993. “Political Regimes and Economic Growth.” Journal of Economic Perspectives 7: 51-69.
Przeworski, Adam, and James Raymond Vreeland. 2000. “The Effect of IMF Programs on Economic Growth.” Journal of Development Economics 62: 385–421.
PWT. 2000. Alan Heston, Robert Summers and Bettina Aten, Penn World Table Version 6, Center for International Comparisons at the University of Pennsylvania (CICUP).
Rosendorff, Peter. 2001. “Choosing Democracy”. Economics and Politics 13:1-29.
Rosendorff, Peter. 2004. “Democracy and the Supply of Transparency” Mimeo. University of South California.
Schumpeter, Joseph, A. 1947. Capitalism, Socialism, and Democracy. New York, NY: Harper & Brothers.
Stokes, Donald E. 1963. “Spatial Models of Party Competition.” American Political Science Review 57: 368-377.
Williamson, Oliver E. 1964. The Economics of Discretionary Behavior. Englewood Cliffs, NJ: Prentice- Hall.
World Bank , (2004). World Bank Development Indicators, CD-ROM, Washington D.C.: World Bank.
Wyckoff, Gary P. 1990. “Bureaucracy, Inefficiency, and Time.” Public Choice 67: 169-179.