Discussion Paper Details

Please find the details for DP16719 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Democracy, Growth, Heterogeneity, and Robustness

Author(s): Markus Eberhardt

Publication Date: November 2021

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

Programme Area(s): Macroeconomics and Growth and Political Economy

Abstract: I motivate and empirically investigate differential long-run growth effects of democratisation across countries. While the existing literature recognises the potential for such heterogeneity, empirical implementations to date unanimously assume a common democracy-growth nexus across countries. Adopting novel methods for causal inference in policy evaluation I relax this assumption to confirm that in the long-run democracy has a positive average effect on per capita income of around 10%, adopting a range of alternative definitions for regime change in the form of binary indicators. Guided by existing hypotheses, additional analysis probes the patterns of the heterogeneous 'democratic dividend' across countries. A second common feature of this literature as well as cross-country growth empirics more generally is the absence of concerns for sample selection or influential observations. I carry out two rule-based robustness exercises to demonstrate that my empirical findings are highly robust to substantial changes to the sample.

For full details and related downloads, please visit:

Bibliographic Reference

Eberhardt, M. 2021. 'Democracy, Growth, Heterogeneity, and Robustness'. London, Centre for Economic Policy Research.