Citation

Discussion Paper Details

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Title: Democracy Does Cause Growth: Comment

Author(s): Markus Eberhardt

Publication Date: April 2019

Keyword(s): democracy, Difference-in-Difference Estimator, growth, Interactive Fixed Effects, Political development and Spillovers

Programme Area(s): Macroeconomics and Growth

Abstract: I revisit the causal relationship between democracy and growth as recently studied in Acemoglu, Naidu, Restrepo, and Robinson (2019, ANRR). I demonstrate the sensitivity of their results to sample selection by dropping a small number of observations in a non-random fashion and use these findings to motivate a generalisation of their empirical approach. My own analysis relaxes the assumption of (i) a common democracy-growth relationship, and of (ii) the absence of strong cross-section correlation. Adopting novel methods for policy evaluation I find a robust positive long-run effect of democracy albeit with only around half the magnitude of that found in ANRR.

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Bibliographic Reference

Eberhardt, M. 2019. 'Democracy Does Cause Growth: Comment'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=13659